Response to SkyHawks's Post: You Wrote : This will reduce tax for the current year and allow you to keep the remainder as deferred income which when you tax distribution later will give you more options. If your income is below filing requirements when you do take the distribution, it will not be taxed at all.
Could you clarify : "when you tax distribution later"
Let me clarify/elaborate. I am unemployed and surviving on assets
. No wage base income, approximately $20k to $25k estimated
for 2004 in interest
, long and short term gains. Intend on portfolio cleanup in Dec. that will offset long and short gains for almost a nil gain/loss. Interest and dividends are a third of total income. Wife died. I have already settled a $25k IRA and a $50k annuity. Will pay all medical bills for approximately $62-65k in 2004. The Annuity has a cost basis of $25k. I don't know the cost basis for the IRA.
Can I use the cost basis for these funds?
Deferred Income? I believe from what I have noted I can almost pay no taxes for 2004 if: The medical payments are deductable? Doesn't my adjusted gross income
look as though it will be almost $100k or am I missing something? I need to understand the deferred income part, I'm sorry and I'll have to read up on that.
Finally, there will very little left over and I don't mind paying taxes (after all they help make America great)but wish to pay as little as possible. Due to my unemployed status some cash in my pocket would be good right now.