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Recent Tax Burden questions

My employer, which is an LLC, purchased a whole life

My employer, which is an LLC, purchased a whole life insurance policy for me as a retirement benefit. The business is closing and he is transferring the policy owner ship to me, this is a name change on paper only. It's a New York Life whole life insurance policy. It's a New York Life whole life insurance policy. I have been and will remain the beneficiary.The premiums paid on the policy equals $85,000. It has gained $2600 in interest, for total cash value of 87,500. The death benefit is 250,000. My question this, since this is a name change on paper only, do I have to pay taxes on this now? If so, on what portion? I do realize that if I don't pay taxes now I will have to pay taxes on the money once I start drawing it out when I retire in several years. I am trying to avoid paying taxes on the lump some now, while I'm in a higher tax bracket. I would prefer to defer the taxes until I'm retired and will be in a lower tax bracket. Is there anyway to do this?We have already discussed this with two accountants. My employers accountant feels the total 87,500 needs to run through payroll so I will pay federal income tax, Social Security, etc. on it. My accountant feels there must be some other way to transfer the ownership on paper only and defer taxes until retirement.

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Dr. Fiona Chen

President

Ph.D.

556 satisfied customers
I have a fairly involved tax question regarding a settlement

I have a fairly involved tax question regarding a settlement of a lawsuit and what tax burdens will be as owner of a S-corp.

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Lane

JD, MBA, CFP, CRPS

Doctoral Degree

17,732 satisfied customers
My investment account makes money from short-term capital

My investment account makes money from short-term capital gains. I am not going to consider long-term capital gains investment strategies. Are there any tax strategies to minimize tax burden from short-term capital gains? If the majority of gains are being reinvested, can the gains be deferred or can I simply pay tax on the portion that is withdrawn from my account?

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Robin D.

Vocational, Technical or Trade School

21,204 satisfied customers
I'm wondering about what happens to federal and state tax

Hello,I'm wondering about what happens to federal and state tax debt when someone dies. If someone owes back taxes, has no assets, and no spouse or partner, can the tax burden pass to parents or siblings? I know it can pass from parents to children or to spouses, but I'm specifically wondering if it can pass to parents or siblings. Again, no assets in any estate to pay any of the debt.

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Barbara

Enrolled Agent, Paralegal

5,140 satisfied customers
Basically I had a Roth with a brokerage company that had

Basically I had a Roth with a brokerage company that had fees which were too high. I attempted to do an indirect rollover to a Roth IRA at another brokerage. Somehow wires were crossed and it ended up rolling into a Traditional IRA. I've already paid taxes on this money and already have a 401k. I want it to go back to a Roth. The brokerage is recommending a conversion and filing a Form 8606 to demonstrate I already paid taxes on this money. But they said I should speak to an accountant first. What do you think I should do to get this money back into a Roth? How can I do it with the least tax or penalty burden? What is a Form 8606 and how would I file it?

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Mark Taylor

Certified Public Accountant

Masters

1,250 satisfied customers
My wife and I are working for a start-up company together.

My wife and I are working for a start-up company together. We both have stock options that we plan to exercise soon. We'd like to gift our stock options to her mother who lives in Malaysia to avoid paying US capital gains if and when the stock value increases. Is there anything legally that is keeping us from doing that? The amount of stock we will gift her is in excess of 14K (around 60K) so I figure we'll need to submit a IRS gift form

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Mark Taylor

Certified Public Accountant

Masters

1,250 satisfied customers
Scenario: I'm in the 31% tax bracket and the commercial

Scenario: I'm in the 31% tax bracket and the commercial building that I hold in a single person LLC is now providing significant income pass through via form 1065 to my personal return. I have bought a new single family rental property as an individual since I couldn't get a lender to finance it in the LLC. The new property will have a loss and I would like it to cancel some of the LLC properties gain.Sidenote: I feel that the LLC is not serving me well (I have very good insurance coverage on the building, I personally guarantee the commercial building loan any way, alot of extra hassle). My commercial lender is in the process of re-financing the LLC's building so now would be a good time to get their approval to transfer back to me personally. Both properties and the LLC are in Washington State, so it is only a federal tax issue.My Belief (may or not be true): I assume the loss on the residential rental property(closing costs, maintenance, minimal rent income) will not reduce my personal tax burden for 2016? I'm under the impression that gains after depreciation, taxes, interest, etc on rental real estate are taxable as additional income but losses will not reduce my adjusted gross income.Question: Am I correct? If so, then it seems I need both properties in the LLC or both out of the LLC to accomplish my goal. Is the transferring the commercial bldg. from the LLC back to me personally a taxable event? Anything special I must do to make sure it is not. Any other thoughts, advice?

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Mark Taylor

Certified Public Accountant

Masters

1,250 satisfied customers
My parents, (who are divorced) received insurance

My parents, (who are divorced) received insurance disbursement payments, one of equal amount to each of them. I was told by the bank as long as I was secondary on the account that I would not be taxed, so opened up two bank accounts with them as the primary and me as the secondary account holder. At this point, we want to lock away the money for the next year, we were thinking CDs would be a good option. Are the any other good methods? Main thing would be to keep my name on both of their accounts, while at the same time not taking on any tax burden.

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Robin D.

Vocational, Technical or Trade School

21,204 satisfied customers
My house and family are in NC. I worked and paid taxes in

My house and family are in NC. I worked and paid taxes in Michigan. I paid in over 8K total State taxes between both states and NC says I still owe them 4K. I don't think that is fair.

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Mark Taylor

Certified Public Accountant

Masters

1,250 satisfied customers
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