2013 Annual Anandtech Tax Time Thread!

[CPA]

The folks in the Video Cards and Graphics forum are probably wondering how to properly account for their capital gains or losses that they made mining Litecoin last year.

That said, the US government probably doesn't even consider Litecoin to be a real asset yet, so they might be off the hook. Wadda you think?

Well, this is a tricky one and I hate even having to speculate. Right now, the IRS has not provided a position on how to report bitcoin, litecoin, Kanyecoin or whatever virtual currency you're trading.

That said, whenever you sell any intangible item, there are gains and losses. So, it makes sense to report them as capital gains/losses.

 

[Xcobra]

The folks in the Video Cards and Graphics forum are probably wondering how to properly account for their capital gains or losses that they made mining Litecoin last year.

That said, the US government probably doesn't even consider Litecoin to be a real asset yet, so they might be off the hook. Wadda you think?

Well, this is a tricky one and I hate even having to speculate. Right now, the IRS has not provided a position on how to report bitcoin, litecoin, Kanyecoin or whatever virtual currency you're trading.

That said, whenever you sell any intangible item, there are gains and losses. So, it makes sense to report them as capital gains/losses.

I would think it would fall under the foreign exchange currency gain rules. That seems to be the most ligical. You just pay tax at ordinary rates.

 

[gorcorps]

I'm trying to fill out information for my property tax paid (new home owner), and it has 3 fields: Property description, Tax paid, and number of months. What are they looking for for "property description"?

 

[gorcorps]

I'm trying to fill out information for my property tax paid (new home owner), and it has 3 fields: Property description, Tax paid, and number of months. What are they looking for for "property description"?

Nevermind, found the "legal property description" from my county's website

 

[brianmanahan]

just got the 1099 from vanguard. VTSMX/VTSAX dividends werent %100 qualified! what a shame

 

[snoopdoug1]

If I sold a house in 2013, and sold it for less than I paid, do I have to do anything? Do I even have to tell them that I sold a house?

 

[slugg]

I just bought a house at the end of 2013 and have paid only about $800 in interest so far and nothing in taxes. I'm single... So in this case, is the standard deduction the way to go? It sucks.

 

[mwtgg]

If I sold a house in 2013, and sold it for less than I paid, do I have to do anything? Do I even have to tell them that I sold a house?

Personal losses aren't deductible, so unless you received a 1099-S from the transaction, no you don't have to do anything on your return.

 

[mwtgg]

I just bought a house at the end of 2013 and have paid only about $800 in interest so far and nothing in taxes. I'm single... So in this case, is the standard deduction the way to go? It sucks.

You didn't pay any taxes at settlement? There weren't any real estate taxes reimbursed to the seller and charged to you? In any case, if you use software it will do the analysis for you. Just keep in mind, there are other things that go on Schedule A, like any state or local income taxes paid (like those withheld from your paycheck), charitable deductions, mortgage insurance premiums (if you pay any), etc...

 

[gorcorps]

You didn't pay any taxes at settlement? There weren't any real estate taxes reimbursed to the seller and charged to you? In any case, if you use software it will do the analysis for you. Just keep in mind, there are other things that go on Schedule A, like any state or local income taxes paid (like those withheld from your paycheck), charitable deductions, mortgage insurance premiums (if you pay any), etc...

Not sure if this is true for all states, but I pay property taxes in two chunks each year. Technically it's from an escrow account, but if I wanted to pay it myself that's how it works. If he bought the house late enough in the year he wouldn't have any taxes paid in 2013.

Anyway slug, like he said any of the software services will let you know which way will give you the largest refund. You can fill out your taxes fully on any of the services (TurboTax, H&R Block, TaxAct, etc) and it will let you know what's the best way to go before you have to pay them. You only have to pay to file, so everything up to that point is free.

 

[mwtgg]

Not sure if this is true for all states, but I pay property taxes in two chunks each year. Technically it's from an escrow account, but if I wanted to pay it myself that's how it works. If he bought the house late enough in the year he wouldn't have any taxes paid in 2013.

Anyway slug, like he said any of the software services will let you know which way will give you the largest refund. You can fill out your taxes fully on any of the services (TurboTax, H&R Block, TaxAct, etc) and it will let you know what's the best way to go before you have to pay them. You only have to pay to file, so everything up to that point is free.

I'm no expert when it comes to every state's property taxes, but at least in PA we have city & county taxes (run calendar year) due in April and school taxes (run June 30 fiscal year end) due in August. I would think in almost every case there would be some taxes refunded to the seller for the portion of the year they prepaid. All he needs to do is look at the HUD-1 and it will clearly tell you.

One other thing I'll mention is sometimes the daily interest charges paid at closing aren't reflected on your 1098 from your mortgage servicer. Those can be added in on Schedule A.

 

[xeemzor]

Thank you for starting this thread CPA.

Do you know if there have been any new rules regarding classifying business school tuition as un-reimbursed business expenses? My understanding of the current rules are that as long as you are employed while going to school part time for a related degree you can write off the expense. However, you can not write off the expense for full time enrollment. What are your thoughts?

 

[Linflas]

Filing for deceased person who passed in 2012. I paid H&R Block last year to do the return for 2012 but I have to file a return for 2013 because I received payouts for his 403b and cash match accounts. Are there any special forms I need for this or is it something I can do with any standard tax software? Am I correct in assuming that since we are talking less than $10,000 that the tax withheld will just be refunded?

 

[CPA]

Thank you for starting this thread CPA.

Do you know if there have been any new rules regarding classifying business school tuition as un-reimbursed business expenses? My understanding of the current rules are that as long as you are employed while going to school part time for a related degree you can write off the expense. However, you can not write off the expense for full time enrollment. What are your thoughts?

No new rules. Just remember that the classes need to either improve your current skills or be required by your company. If it's for a new career or job skill set, then it's not deductible. It's also subject to a 2% of AGI floor.

 

[CPA]

Filing for deceased person who passed in 2012. I paid H&R Block last year to do the return for 2012 but I have to file a return for 2013 because I received payouts for his 403b and cash match accounts. Are there any special forms I need for this or is it something I can do with any standard tax software? Am I correct in assuming that since we are talking less than $10,000 that the tax withheld will just be refunded?

Assuming this person did not have widow, you need to file an Estate Tax return, Schedule K-1 (Form 1041). After all of the deductions and exemptions, if a refund is owed and you are claiming it, you will need to file Form 1310.

 

[slugg]

You didn't pay any taxes at settlement? There weren't any real estate taxes reimbursed to the seller and charged to you? In any case, if you use software it will do the analysis for you. Just keep in mind, there are other things that go on Schedule A, like any state or local income taxes paid (like those withheld from your paycheck), charitable deductions, mortgage insurance premiums (if you pay any), etc...

I forgot exactly how the deal worked, but no, the seller paid all the taxes at settlement. I begin paying property taxes in 2014. As far as state income tax, I live in Florida (none). I was not aware that MIP was deductible, so that's kinda cool.

I guess I'll pony up and buy a copy of Turbo Tax.

 

[mwtgg]

I forgot exactly how the deal worked, but no, the seller paid all the taxes at settlement. I begin paying property taxes in 2014. As far as state income tax, I live in Florida (none). I was not aware that MIP was deductible, so that's kinda cool.

I guess I'll pony up and buy a copy of Turbo Tax.

Ah, didn't even notice your location. Sounds like you'll be taking the standard deduction. Also, MIP is only deductible for this year anyway, unless Congress extends it again.

 

[mwtgg]

Assuming this person did not have widow, you need to file an Estate Tax return, Schedule K-1 (Form 1041). After all of the deductions and exemptions, if a refund is owed and you are claiming it, you will need to file Form 1310.

If the decedent's estate didn't have gross income in excess of $600, then there is no estate return necessary. I'm kind of confused by the original question though. Did the decedent in question have any taxable income in 2013?

 

[Linflas]

If the decedent's estate didn't have gross income in excess of $600, then there is no estate return necessary. I'm kind of confused by the original question though. Did the decedent in question have any taxable income in 2013?

No, he passed away in April, 2012. I filed through H&R Block his 2012 return for the income earned before his death in 2012. This is my brother and he had no will so I was made administrator of the estate with all the proceeds going to my mother as he was unmarried with no children. When I went to distribute the funds from his retirement account to my mother is when I found out that it actually went to the estate which I am told means I need to file another return in his name for 2013 since that is when the distribution actually took place. Had I been aware of this I would have made sure to get the distribution completed before the end of 2012.

 

[CPA]

If the decedent's estate didn't have gross income in excess of $600, then there is no estate return necessary. I'm kind of confused by the original question though. Did the decedent in question have any taxable income in 2013?

403B distributions are income to the estate, so a Schedule K (Form 1041) is required. And since he is the administrator and distributed the money to someone else, he needs to file a 1310. I assume this all happened in 2013 and it was about $10K.

 

[mwtgg]

403B distributions are income to the estate, so a Schedule K (Form 1041) is required. And since he is the administrator and distributed the money to someone else, he needs to file a 1310. I assume this all happened in 2013 and it was about $10K.

The need for a 1041 (with a K-1 going to his mom) became more clear when Linflas explained it further. Although, unless I'm missing something, a Form 1040 for 2013 for his brother doesn't need to be filed (nor would a 1310).

 

[CPA]

The need for a 1041 (with a K-1 going to his mom) became more clear when Linflas explained it further. Although, unless I'm missing something, a Form 1040 for 2013 for his brother doesn't need to be filed (nor would a 1310).

A 1310 is necessary for a refund of taxes due to a dead person. Assuming that the administrator withheld the mandatory 20% tax on the 403B distribution, it is likely that a refund will be due as the estate will be able to utilize it's Unified Estate and Gift Tax exemption on the income. Linflas, as the executor of the estate will need to file 1310 to claim the refund.

 

[BergeLSU]

Maybe someone in this thread can enlighten me. I have no idea how to do taxes. I've just used TaxAct the past few years because I just had my income and student loan interest with nothing else of note to deductions.

Last September, my fiancee and I bought a house (getting married this coming June). How does this go into our taxes? Do both of us say we bought a home, with only one of us claiming the taxes/interest payments, or do only one of say we bought a home?

 

[MrScott81]

Are property taxes deductible? I am using Tax Cut and it *sounds* like they should be, but I just want to be 100% before I enter it in. I use an escrow account, and the tax form has the interest paid in box 1, with no other boxes having any amount. However below the boxes they specifically list out property taxes and the amount.

I'm in California if that matters.

 

[Linflas]

A 1310 is necessary for a refund of taxes due to a dead person. Assuming that the administrator withheld the mandatory 20% tax on the 403B distribution, it is likely that a refund will be due as the estate will be able to utilize it's Unified Estate and Gift Tax exemption on the income. Linflas, as the executor of the estate will need to file 1310 to claim the refund.

Thanks so both the 1041 and the 1310 need to be filed and I am done if understand correctly. I did obtain an EIN but it was not used to file the tax returns for tax year 2012 but it appears I use it for the 1041 form. Thanks again for the help.