New answers tagged

1

No, USA IRS is interested in earnings, not assets. Earnings are taxed when you earn it. You were not associated in any way with the USA then, so you don't need to report the income. However, USA Immigration is interested in assets. First they want to know you have enough money to accomplish your travel goals consistent with your visa, without "going ...


0

You need to convert the barter to a USD dollar value The barter is two transactions, with a USD dollar value that is reasonable. Suppose you trade $200 (reasonably) worth of computer services for $200 in vegetables. IRS treats that as you selling of computer services for $200, and you buying vegetables for $200. The barter is then business income for both ...


1

If the vegetables are taxable income, then you must sell some of the vegetables for money in order to pay the taxes. Even if nobody in your town uses money and you have to drive 50 miles to a place where people do. Yes, it's stupid.


11

If you are obtaining vegetables from your neighbors in exchange for services that you do for them, then you are considered self-employed, and the value of the vegetables that you are receiving from them is income. (Vegetables received as a gift are not considered taxable income.) It would take a lot of vegetables to be worth enough where you are above the ...


4

Suppose I live in a village and I get vegetables from my neighbors, ... for services I do for them. https://www.irs.gov/taxtopics/tc420 You (and probably also the other party to the barter) will have to file a 1099-B. Since I need to pay taxes, then how can I do it, if I never get any money? If you're single, and "earning" more than $21000 in ...


3

Many assertions and statements in the OP's question don't match up with what one might expect to have happened and I am not sure if this is because the OP is using incorrect terminology or because he has misunderstood what he has done. In general, an executor of a will (or an estate if the decedent was intestate) has only a small role to play (if any at all) ...


1

I have heard that private school (K-12) tuition can sometimes be tax-deductible as a medical expense, when recommended by a medical professional. In my experience it has worked slightly differently. A public school student who has an Individualized Educational Plan (IEP) because they have a disability, but the local public schools cannot meet the ...


1

Retitling an account does not involve selling the assets owned. It simple means that you are changing the title of the ownership. It's basically the same idea as a newly married woman changing her account from her maiden name to here new married name or a newly married couple commingling assets in a new joint account. All cost basis information remains ...


0

Article from a CPA firm: GAAP basis requires accruals Small businesses often find it easier to use a cash basis accounting method than an accrual basis. As of a 2019 tax law change, IRS accepts cash basis accounting for businesses having no more than $25 million in gross revenue.


3

From the CFA Institute: Companies that issue stock are held to this standard by SEC, which requires yearly external audits by independent accountants, but companies without external investors are not obliged to follow this standard. So publicly traded companies are required to use GAAP, but privately-help companies are not, though many larger ones do ...


0

There is a difference and it is mainly in the case of the tax that you have to pay. Maybe the things that you buy for your company will have some exceptions in tax ( Depending on the kinds of stuff that you buy) For example in the case of reclaiming VAT, As a business person, it is possible for you to reclaim the VAT paid on goods and services purchased for ...


0

Here's a basic scenario to explain what's happening. Say you are awarded 1,000 shares of company stock that's worth $25 per share at the time of the vesting. When those shares are released to you, it counts as $25,000 of income (25 * 1,000). Just like "regular" income, a portion of that is withheld to cover at least part of your tax burden. Stock ...


2

If the trust is not like a partnership, then the boot can be cashed out and taxed. Your partial 1031 exchange will be untaxed. If a trust is like a partnership, this article details several solutions. This solution seems to be the simplest: Having the partnership complete a 1031 Exchange, then refinancing the acquired like-kind replacement property(ies) ...


0

I believe it is doable the amount not used in the exchange is subject to taxation based on this description: A 1031 Exchange allows a taxpayer to defer 100% of their capital gain tax liability. To do this, the exchanger must buy new Replacement Property equal to or greater than in value to the property sold and reinvest all of the proceeds from the sale of ...


1

In addition to the previous answer, if you and the cousin are reasonably young: you can give your cousin €20,000 every ten years tax free. Or 40,000 now and the rest in 10 years, so at least €20,000 are free twice. And you can give up to €400,000 tax free to a common grandparent, who can give up to €200,000 tax free to their grand child, your cousin. It ...


0

The fact that gift tax in Germany is paid by the person who receives the gift makes this difficult to determine. Being cousins does not confer any special status, so they pay the full tax on anything that exceeds 20 000 Euro within 10 years, but specifics depend on their "Steuerklasse" (which in turn can depend on marital status, number of jobs etc....


1

Roths grow tax-free To make the clearest (simplest) case for IRA, let's consider the ROTH IRA. This was developed to answer some problems with traditional IRAs. Comparing "Roth IRA" to "normal investments" will illustrate the situation very well. Ron earns $5000 and puts it in a Roth IRA. Norma earns $5000 and puts it in a brokerage ...


0

Something is often missing from the IRA conversation. This is what marginal rates look like in 2021. While working, the IRA deposit comes off the top, e.g. while you are in the 22% bracket. Now. You save, and have $1M at retirement. You take out $40,000 per year. $12,500 is the standard deduction. $9,950 is taxed at 10%, $995 tax bill. The remaining $17,500 ...


0

In principal at least, the fact that you can defer the taxes means that you can afford to put more towards retirement in the first place. Obviously, getting the benefit of that depends on you taking steps to make sure that you're actually doing that - if you just save whatever amount you would have saved anyway the benefit of that disappears. Personally, I ...


0

What makes IRA better than putting in a brokerage account to buy index funds etc.? In the brokerage account, you pay taxes before you put the money in AND after you take the money out. In a Roth IRA, you only have to pay taxes when you put it in. [Update: Never having owned a traditional IRA, I'd always assumed the behavior was dual to that of a Roth IRA, ...


3

You are deferring taxation part of your income until a time that you choose to have it taxed. That choice is a critical component of retirement tax planning. With careful planning, it is possible to never pay taxes on deposits or earnings in an IRA. For example, as long as you keep your IRA withdrawal (and any other income) during retirement below the ...


5

My question is basically what makes IRA better than putting in a brokerage account to buy index fund etc. You put money in a regular brokerage account with after-tax dollars. When you sell something within a brokerage account, you may pay taxes on your gains every year1. If you were to take the same after-tax dollars and put them into a Roth IRA instead of ...


6

Lots of good answers pointing out the financial advantages, but I don't see any mention that retirement accounts can also provide you with some protection in the event of a bankruptcy or lawsuit. While not ironclad protection in either event, they're definitely not as exposed as a brokerage account would be. https://www.fool.com/retirement/what-happens-...


11

Any trades made within an IRA are not subject to being taxed for that given year. If you wanted to be a high-risk trader then you could trades stocks till your eyes bleed and not be subject to taxes on your gains. This of course assumes that you're actually making trades in your favor instead of losing money like most people =)


17

So you only benefit if you are in lower tax bracket when you withdraw With a traditional IRA, you benefit the most if you are in a lower tax bracket when you withdraw, but you still benefit some if you are in the same or even a slightly higher tax bracket. You are implicitly comparing to a non-IRA alternative, which I will take to be an ordinary taxable ...


3

When your income is low, then contributions into a Roth IRA or Roth 401(k) make a lot of sense. When my kids were in school and not making much money, then paying their 0% tax to put money in the Roth makes perfect sense. At somebody is at the end of their career when they are in a high tax bracket then the traditional plan makes the most sense. Someplace in ...


34

For the reasons you cite may prefer the Roth IRA where you pay tax on the money contributed now, but future withdrawals are tax free. However there is a benefit to pretax plans such as traditional IRAs. Assume Tim and Ron are in a the 25% tax bracket and each will dedicate 1K per year to retirement savings. Tim does a traditional IRA, Ron a Roth. Because ...


0

In addition to the excellent accepted answer, the following resource from Delloite: https://www2.deloitte.com/content/dam/Deloitte/us/Documents/Tax/us-tax-taxation-of-foreign-nationals-by-the-us.pdf … further corroborates that filling a "Residency Termination Statement" is not always required. It specifically says, on pg. 9: It therefore appears ...


6

Since all the sales are in the same tax year, you're fine Crypto-"currencies" don't tax like recognized currencies, just regular securities like stocks. Capital gains are taxable when you sell the stock/security. Likewise, capital losses are only created when you sell. So if you sell this year, your gains and your losses happen inside the same tax ...


1

I did call FTB to confirm. The mailing address to contact them is the one listed on the upper left-hand corner of the notice itself. Reporting back so that others will know where to go when faced with a similar situation. Thanks all for your replies.


46

In the U.S., gains from cryptocurrency trading are taxed just like trading stocks: as capital gains. Capital gains are only taxed when they are realized. At this time, you have realized a $40,000 gain, but you have not realized a loss. If you do not sell your new position before the end of the year, you will be taxed on the $40,000 gain. (Note: your gain is $...


2

Ordered from fastest to slowest, you could try: Registering for your account online and looking for your notice Requesting a transcript for 2003 or 2004, as appropriate Calling to make an appointment at a local IRS office


2

Estimating the value of homes is already a finely tuned science As you probably know, there are home-buyer sites where you can input almost any address, and it will tell you the present value of that home, even though it hasn't been on the market in 20 years, based on sale prices of neighboring homes, features (bedrooms, bathrooms, square feet) etc. So what ...


2

The relevant documentation is IRS Pub 970. As usual however, you have to do quite a bit of digging to find clear answers. In general, there are three cases when withdrawing money from a 529 plan: Withdraw money to pay for qualified education expenses. (No tax) Withdraw money without any qualified expenses to match. (Pay income tax +10% penalty on earnings) ...


0

Its really surprising for me that at such a big forum no one have answer to my question. In fact FedEx, DHL and UPS charge unjustified fee for clearing customs, when your parcel is shipped just request the shipping company that I will clear customs for this shipment by myself and they will send you documents related to your shipment. You take those documents ...


3

If there is only one type of capital loss being carried over, it can be used to offset the current year capital loss regardless of it is for a short term or long term capital loss. And if the loss is significant, one can also deduct a maximum loss of $3,000. The overriding decision should be that if you no longer have any confidence in CRAP, it should be ...


4

If you look at your county/city property records you may find cases where the sales record notes that the sale price isn't to be used for appraisal purposes. This is because it was done to add or remove somebody from the ownership due to marriage, divorce, or death. Usually the price in those cases it is noted as a value of $0. The record can also show ...


11

No. Only sales at fair market value in a bona fide arms' length sale can set the assessed price for property tax purposes. Even were this not the case, there's a general rule that a maneuver whose sole purpose is to reduce taxes and has no legitimate economic purpose or impact is treated as if it did not happen.


0

This is for the purposes of PAYE, so you select "A". You will still do Self-Assessment each year where you declare your additional freelance income, and pay the resulting Income Tax and National Insurance contributions. The reason they ask you to specify whether this is your main / only job (or pension or benefits) is in order to correctly apply ...


0

I've already posted answers to your related questions, but since nobody has responded to this one yet, I'll take a stab at it too. Obviously parts of this will be repetitive. This is a variation of the classic pre-tax versus Roth question. In general I lean toward the pre-tax side for most people. Since you mentioned your income is over the Roth limit, I ...


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