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Recent tax questions

I want to count my mother as a dependent 2016 tax year. She

I want to count my mother as a dependent for the 2016 tax year. She is married, but will be living separately from my father shortly and by the end of the year. She will be receiving $348/month from SS for the remainder of the year. I understand that some of her SS benefits could be taxed because she would be filing separately even though she will have lived with my father for part of the year (please confirm).How much do I need her to support her to be able to claim her as a dependent and get the head of household benefit. I understand that I need to provide half of her household expenses to qualify.

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Lane

JD, MBA, CFP, CRPS

Doctoral Degree

 
16,242 satisfied customers
Background: My company allows us to save using 3 different

Background:My company allows us to save for retirement using 3 different vehicles.Pre tax 401k (contribution and earnings taxable when withdrawn at 59 1/2)After tax 401 Roth (no taxes to be paid on earnings no withdrawal till 59 1/2)After tax no tax shelter is the final way where you can have money deducted from your check and purchase stocks much as you would if you chose to do so on your own but with the convienence of having automatically deducted from your pay . This third option is after tax so it not in the 401k (pretax), it's after tax and not in the 401 roth so it not protected by any tax shelter what so ever and should have no early withdrawal penalty and taxes for this third option should only be paid on earning. Ex: contribute 10,000 acct grows to 15,000 then 5,000 should be taxable upon withdrawing all money.Question:In 2013 I withdrew 2000 of after tax money and was given a 1099R form.Box 1 gross distribution $2000Box 2 taxable amount $0.00Box 5 employee contributions designated Roth or insurance premiums $2000Box 7 distribution code 1My accountant states that since it's a 1099 distribution code 1. This means regardless of box 2 taxable amount 0.00He has to put the distribution amount of $2000 in box 16b when filing my taxes and therefore getting added to my income paying taxes on the entire $2000 dollars that I contributed that year into and after tax account that made 0.00 earnings. I have now paid tax on the $2000 when it was garnished from my check and again when it was tacked on to my total income paying double tax. Accountant says it should be distribution code 2 exceptions apply in box 7 of 1099R or a 1099 viv form. The company says they are not changing anything since they manage my 401k and 401 Roth my after tax acct is held to the same rules. Please help please explain

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emc011075

Tax advisor and Enrolled Agent

Bachelor's Degree

 
3,514 satisfied customers
I have a question regarding a relative who receives SSI and

I have a question regarding a relative who receives SSI and is moving to a new home. Will the money she receives from the sell of her property disqualify her to receive SSI? She plans to give the remainder to give it to her daughter.

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Lev

Retired

Bachelor's Degree Equivalent

 
24,188 satisfied customers
I changed my principal residence property to a rental income

I changed my principal residence property to a rental income in 2013 in province of British Columbia Canada. My work transferred me to Ontario. I have never claimed CCA on the property on my taxes and have claimed rental income since the change. I recently found out about Section 45 (2) about an election deemed not to have made the change. (I do not own any other property, been renting myself since 2013.) The FMV of my townhouse at time of change to rental was $360,000. I submitted an election to Revenue Canada under subsection 45(2) not realizing subject to a $100 per month penalty due to late filing. I filed March 2016 and asked to be effective from 2013. As such, I have been assessed a $2200 penalty for late filing of the election. My question is, should I sell my rental property WITHOUT having the election in place...will there be a capital gain that I would have to pay? Let's say the townhouse sells this year for $400,000. Will I be subject to capital gains with no election in place? I am trying to decide if I should pay the penalty or not to allow the election to be effective. Thanks.

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Robin D.

Vocational, Technical or Trade School

 
20,226 satisfied customers
Again, thanks again quick response on my earlier

Hi again, thanks again for the quick response on my earlier question. New question: I helped my sister move last year from another state so that she could help me with my LLC startup. I also have a full time job to pay the bills. Since I don't have income from the startup yet - just lots of expenses related to an old building I'm rehabbing for use in the startup, I'm leaning towards not filing schedule c and just taking a hit on expenses in 2015. I'm paying my sister for her work and she's reporting it as income, but am wondering if the moving help is also income for her, or if it could just be a gift from me. Since I originally thought I'd be taking an expense deduction, I charged a lot of it to my business account. I'm wondering if that's within the bounds of propriety?

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Stephen G.

Sr Financial & Tax Consultant

Bachelor's Degree

 
8,890 satisfied customers
Client meets the physical presence test to qualify

client meets the physical presence test to qualify for the foreign earned income exclusion.Q)tax home? itinerant worker?....lives in the Philippines under a tourist visa for 5 years with a common law wife and has owned a home there. no married relations or employment there and pays no taxes there. he travels to various countries and works as an airplane mechanic from 2-9 months at a time. I suspect the IRS may want to challenge that the philipines is a tax home and disallow lodging and meals expenses via 2106. Is he an itinerant worker?Q) foreign housing exclusion. client often paid per diems by various employers.foreign income exclusion shelters the taxation of his wages. is it necessary to bother with the foreign housing exclusion since the tax liability is zero anyway? client has no real knowledge or documentation of expenses . filing tax returns for last several years

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Robin D.

Vocational, Technical or Trade School

 
20,226 satisfied customers
Third party special needs trust received 100,000 of pension

third party special needs trust received 100,000 of pension income but made no distribution as received in December 0f 2015. Is there any way that income can be taxed to the beneficiary?JA: The Accountant will know how to help. Please tell me more so we can help you best.Customer: nothing else to tellJA: Anything else I can tell the Accountant before I connect you two?Customer: noJA: I'm sending you to a secure page on JustAnswer so you can place the $5 fully refundable deposit now. While you're filling out that form, I'll tell the Accountant about your situation and connect you two.

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Lane

JD, MBA, CFP, CRPS

Doctoral Degree

 
16,242 satisfied customers
I'm a regular W-2 employee with high income living in

I'm a regular W-2 employee with high income living in California. I have one rental property and am thinking of getting more in the future but I'm concerned about the passive be income being taxed at my high bracket. What is the best way to shelter rental income from my personal income tax bracket? Can I create a corporation or something where the income stays separate from my personal income? Let's assume I don't plan on paying myself much from the corporation. Is this feasible for a small rental business with 2-3 properties and 1-2 part time employees?

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Lev

Retired

Bachelor's Degree Equivalent

 
24,188 satisfied customers
My dad is 89. SS and retirement total over 44,000. there

my dad is 89. SS and retirement total over 44,000. there is 14a SS benefit amount and 14b taxable amount. same with 12a for pensions and annuities and 12b taxable amount. How do I figure out the TAXABLE AMOUNT??????JA: The Accountant will know how to help. Anything else I can tell the Accountant before I connect you two?Customer: actually just if he should be getting taxed at this point and also my brother is downs syndrome. obviously a dependent. 2 years ago he went in a group home. My brother receives very little from SS and my father still pays for all his clothes and activities. How would he be able to claim any of that?JA: The mechanics have tons of experience dealing with ABS (as well as brakes in general.) Do you happen to have the code? I'm sending you to a secure page on JustAnswer so you can place the $5 fully refundable deposit now. While you're filling out that form, I'll tell the Accountant about your situation and connect you two.

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Lev

Retired

Bachelor's Degree Equivalent

 
24,188 satisfied customers
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