Posted on 03/05/2005 10:26:10 AM PST by Shanty Shaker
I have had a terrible year in business. We had a fire and several other events that made me close the business. My wife and I were trying to be good american citizens and pay our own way through life so we sold some stocks to buy groceries. The stock sales amouonted to $2876.00. $2152.00 of that amount was stock given to us as a gift. Cost basis of both sales is 0$. Now when I go to do my taxes we are not qualified for the earned income tax credit because our investment income exceeded $2650.00 and classifies us as rich. Are there any people here who can advise me what to do to fix this. I cannot afford to pay anybody for this right now. (I start a new job monday!!) These are the details of my income/losses if that helps anybody give advice. Married filing jointly with five children.
Adjusted gross income -61372 Itemized Deductions 11231 Personal exemptions 21700 taxable Income 0 Income tax 0 Federal tax withhodling 320 Additional Child tax credit 1669
Total Payments 1989 Total refund 1989
My point is that the tax laws call me rich even though I am destite. Even the democrat social security calculator shows I am screwed. This is enough reason for me to be ill when I hear them say tax the rich. BTW I have paid taxes every year for the last 17 years so this is an abberation. I AM NOT a FREELOADER. These numbers show the loss of what I spent the last 15 years saving up and will take me quite a few years to recover from.
Looks like you are screwed.....;-0
LOL at my typos. I should have calmed down before I posted this. It is official hate the "tax the rich crowd" day at my house.
I found some losses in stocks to place against the profits. If that is not possible, I dunno....
"investment income exceeded $2650.00"
When you sell stock, it is not considered "INCOME", or "investment income", it's "capital gains" (schedule D) (short or long term, depending on how long you held it)
Check and see how did you fill it out. "investment INCOME" would be dividends you receive from stocks or mutual funds, or interest on bank accounts.
But I am not a tax advisor or tax preparer, so consult with one, but do check and see how you filled out your gains resulting from tax sale.
Then Call both of your Senators and INSIST that they sign on as co-sponsors of S25 the FairTax bill.
Check it out at http://www.fairtax.org
Hi lil buddy!
Can you pass along some good advice here?
Is there any way to count the income from the stock sale as a gift? If you can legally shift the income from a stock sale to a gift you might be able to show less than the threshold amount.
Well it depends how much you made from the stock or if you lost money from it, and how long you held it before you sold it. If you held it shorter than a year, then you have to pay short term capital gains tax of whatever amount you profited from when you sold the stock. If you bought a stock and sold it a month later for a profit, you have to pay Short term capital gains tax which I think is 30-35% of your profit. On the other hand if you held it longer than a year you pay less. If you lost money from selling it, you can claim a deduction but only up to $3000 per year. Me, last year I lost a LOT but the IRS says I can only deduct up to $3000. So if I lost $60,000, I can only deduct $3,000 per year for that amount because the IRS needs as much money as it can get to pay for Hitlery Clintons 60 person entourage, liberal socialist programs and studies that determine whether cows farts affect global warming. I would call up an accountant and see what he says about your situation.
That is what I was wondering. Research on irs.gov isn't very clear for me. If I can list it as a gift I should be ok. The stock was given to me in 1976. It was only worth .35 then.
"Adjusted gross income -61372 "
I hope you know that since you had a loss from your business, you should also fill out a form for "Net Operating Loss (NOL), and you can carry that back to previous years and get a tax refund for those years, if you paid taxes, of if you didn't, then you can carry it forward, for next year and on, to save on your taxes then.
See publication 536
http://www.irs.gov/pub/irs-pdf/p536.pdf
Capital gains is considered "investment income" by turbotax. I thought the same thing you mentioned.
How was it given to you? Was ownership transfered into your name? What was it's value when that occured?
"The stock was given to me in 1976. It was only worth .35 then."
In that case, you can't count it as a gift today. I think you can subtract the value that it had at the time you received it, since that was the gift amount.
Yes. I had many losses that I can't claim at all. Stuff that needed replacing to continue business operations.
Why not?
I seriously advise you to consult a tax professional! NOT the guy in the H&R block booth down at the supermarket but a CPA who knows what he is doing!
Ownership was transferred to me with my fathers name as guardian. It specified the unified gift act as the source. I was only five years old then so I do not know the details. Turbotax did not think it could be counted as a gift.
See my previous post to you.
"Your Investment Income Must Be $2,650 or Less"
Even if capital gains count as investment income, your "Inv. Inc" = captial gains, you capital gains = sales price - VALUE of stock, when you received it ( that value was the gift amount, which was small enough at the time, that you didn't have to pay taxes, but the value of the stock when you received it, is the starting value)
"The stock sales amouonted to $2876.00. $2152.00 of that amount was stock given to us as a gift."
What do you get, when you subtract the original value?
Since you are just over the limit, that might bring you down to just below the limit.
Here is the publication about EIC. They have a worksheet you can fill out, on page 11 of the pdf document.
http://www.irs.gov/pub/irs-pdf/p596.pdf
For example: a spray pump that has already been depreciated. Still in working condition and could have been used for many more years with proper maintenance. When it burns I have a loss on a piece of equipment that cannot be expensed.
The business was being reshuffled when the fire occured so many uninsured losses were incurred. That is the mistake that sank the boat. All these other problems arose from that key error. It is to late to do anything about those errors,but I hoe this one is not of that class.
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