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Old 02-25-2014, 07:30 PM   #31
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Yes, I knew there was something wrong with that. I do in fact have a strategy, but it's a long boring story.

Thanks for confirming!
Oddly, I'm riveted by tax planning strategies so boring they bring tears.

Last comment... I'd be wary of using off the shelf software to implement any tax advantaged plan, especially where interests in property (usually determined under state law) are in play.

The best planning in the world is worthless if it doesn't hit the return correctly.

Happy to help/muddy the waters.
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[Owensdad], you usually pull the trigger on a mouth full of buzz words without thinking.

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Old 02-26-2014, 11:36 AM   #32
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Thanks for doing this.

My son is off to college next fall.

Can we write off 2013 expenses for SAT, college application fees, other related "educational" stuff that makes you go broke?

I know, we still have to pay the big $$$$$ for tuition but every little bit helps.

I think I know the answer
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Old 02-26-2014, 04:50 PM   #33
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How to recapture losses in overseas investments, potentially purchased with cash?
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Old 02-26-2014, 09:04 PM   #34
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Thanks for doing this.

My son is off to college next fall.

Can we write off 2013 expenses for SAT, college application fees, other related "educational" stuff that makes you go broke?

I know, we still have to pay the big $$$$$ for tuition but every little bit helps.

I think I know the answer
Expenses required to *enroll* in an eligible educational institution are typically not deductible.

However, once enrolled, deductible expenses include tuition, fees and other expenses (books, lab fees, etc.).

Room/board, transportation, and living expenses generally do not qualify. Also, qualified expenses paid with tax-free (certain tax free grants and scholarships, for example) are also not deductible.

There are limits on the deductible amount and qualified expenses must be paid by you (or your spouse if MFJ), a student that is your dependent, or a qualified third party (e.g. a relative).
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[Owensdad], you usually pull the trigger on a mouth full of buzz words without thinking.
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Old 02-26-2014, 09:10 PM   #35
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How to recapture losses in overseas investments, potentially purchased with cash?
Hmmm... need a few more details here. What do you mean by "recapture losses"? In the tax community, "recapture" usually means recognizing additional income for a previously deducted loss upon a subsequent event.

In the personal context, there is generally no recapture for a recognized foreign loss. For example, a capital loss on a foreign investment is still a capital loss, subject to the normal capital loss limitations.

In the corporate context, there are many recapture provisions for such losses. These often involve "dual consolidated losses", "gain recognition triggers", "outbound" tax free reorganizations, organizations, and sales of business property.

Can you add additional "hypothetical" facts?
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[Owensdad], you usually pull the trigger on a mouth full of buzz words without thinking.

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Old 02-26-2014, 09:26 PM   #36
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Cool, we'll call it capital losses. Invested modestly in Bitcoin, and my hypothetical account was with a company that has ceased operations and will almost certainly not be returning investors assets.
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Old 02-26-2014, 10:06 PM   #37
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Cool, we'll call it capital losses. Invested modestly in Bitcoin, and my hypothetical account was with a company that has ceased operations and will almost certainly not be returning investors assets.
HEADLINE EDIT: The IRS announced this week in Notice 2014-21 that they consider virtual currency to be property, subject to all the normal property gain/loss rules.

Your challenge will be proving that this an "investment" that is actually worthless.

Depending on your theory of the treatment and holding period, it seems reasonable that you should be able to recognize a long or short term capital loss.

Adequate documentation will be important and perhaps difficult.

EDIT: Notice 2014-21 released this week, confirms Bitcoin losses as property losses.
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[Owensdad], you usually pull the trigger on a mouth full of buzz words without thinking.

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Old 02-27-2014, 03:54 PM   #38
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Thank you for the response below.

On a related note, there are 2 high school kids and

1. We pay the school around $500 for sports activities. The school seems to call it a "contribution". Is this deductible?

2. There are other things we "contribute" $$ to the high school such as math dept donation, science dept donation, video productions donation, etc. Are these deductible?

Again, thank you!!!


Quote:
Originally Posted by Owensdad View Post
Expenses required to *enroll* in an eligible educational institution are typically not deductible.

However, once enrolled, deductible expenses include tuition, fees and other expenses (books, lab fees, etc.).

Room/board, transportation, and living expenses generally do not qualify. Also, qualified expenses paid with tax-free (certain tax free grants and scholarships, for example) are also not deductible.

There are limits on the deductible amount and qualified expenses must be paid by you (or your spouse if MFJ), a student that is your dependent, or a qualified third party (e.g. a relative).
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Old 02-27-2014, 09:23 PM   #39
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treatment of bitcoin loss is really interesting (because it can be handled in multiple ways). thanks.
EDIT: original post edited in the face of new IRS guidance establishing that cyber currency gains and losses will be treated by the Service as property gains and losses.
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[Owensdad], you usually pull the trigger on a mouth full of buzz words without thinking.

Last edited by Owensdad; 03-27-2014 at 10:55 AM..
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Old 02-27-2014, 09:31 PM   #40
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Thank you for the response below.

On a related note, there are 2 high school kids and

1. We pay the school around $500 for sports activities. The school seems to call it a "contribution". Is this deductible?

2. There are other things we "contribute" $$ to the high school such as math dept donation, science dept donation, video productions donation, etc. Are these deductible?

Again, thank you!!!
The fees for sports activities are almost certainly not deductible.

The donations *might* be if structured properly (I.e., made to a qualified 501c3).

Did you receive a written acknowledgement of these contributions? If so, that acknowledgement should identify the amount considered a deductible donation. If not, it would be a worthwhile suggestion that the school set up a qualified non profit to receive and disburse these amounts. But that probably wouldn't be useful to you this year.
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[Owensdad], you usually pull the trigger on a mouth full of buzz words without thinking.

Last edited by Owensdad; 02-27-2014 at 10:15 PM..
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Old 02-28-2014, 02:30 PM   #41
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Okay, here's my questions.

While using TurboTax recently it asked if I had paid a contractor to do any work that needed me to submit a 1099. I haven't had any work done recently, but I'm wondering if I hire a contractor am I required to issue a 1099 for the job? I seem to recall that any work over $600 is supposed to be reported - is that correct? And, is that any individual job over $600, or cumulative over the course of the year?

Finally, if I am issuing a 1099 do I need an employer ID number?
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Old 03-02-2014, 05:01 PM   #42
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Okay, here's my questions.

While using TurboTax recently it asked if I had paid a contractor to do any work that needed me to submit a 1099. I haven't had any work done recently, but I'm wondering if I hire a contractor am I required to issue a 1099 for the job? I seem to recall that any work over $600 is supposed to be reported - is that correct? And, is that any individual job over $600, or cumulative over the course of the year?

Finally, if I am issuing a 1099 do I need an employer ID number?
Did you incurr these expenses in the course of your trade or business? In other words are these expenses deductible to you?

If so, you have it right. Each individual contractor to whom you paid at least $600 including materials should receive a 1099. A TIN is required; either an EIN or your SSN will suffice.

Personal payments and payments made to corporations are generally not reportable.
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[Owensdad], you usually pull the trigger on a mouth full of buzz words without thinking.

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Old 03-02-2014, 05:15 PM   #43
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Did you incurr these expenses in the course of your trade or business? In other words are these expenses deductible to you?

If so, you have it right. Each individual contractor to whom you paid at least $600 including materials should receive a 1099. A TIN is required; either an EIN or your SSN will suffice.

Personal payments and payments made to corporations are generally not reportable.
Not a business expense - just work done on my house. So I'm good. I guess if I had a rental house then any work done on it would need to be reported, or is it only if the rental property was a business?
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Old 03-02-2014, 05:38 PM   #44
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Not a business expense - just work done on my house. So I'm good. I guess if I had a rental house then any work done on it would need to be reported, or is it only if the rental property was a business?
Non employee expenses associated with a for profit rental activity would be reportable via form 1099.
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[Owensdad], you usually pull the trigger on a mouth full of buzz words without thinking.

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Old 03-02-2014, 08:52 PM   #45
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Sam,

Is passive loss carryover cumulative? IOW can it be banked until I'm in a situation where I might be able to use it to offset regular income (i.e. after retirement)?
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