Posted on 03/05/2005 10:26:10 AM PST by Shanty Shaker
I agree with Bigun -- you seem to have a sufficiently complex return, that it will be to your benefit to see a CPA.
I am sorry to here of your troubles with the IRS. You are NOT alone and there is NO REASON ON EARTH that we, the most free people on earth, should endure that sort of crap for one more minute!
Yet there are those on this very forum who argue that the income tax system does not impose costs on citizens beyond the taxes they pay. Can you believe that?
The 724$ balance of the investment income came from stock gained through the demutualization of a life insurance company. Would the premium of the life insurance policy set a cost basis for this stock? I terminated that policy and got a term life policy several years ago.
By the way, is there any promising signs that fairtax may happen?? Man that would be a dream come true, but knowing how fast things get done in this country it would probably decades down the road. I`m sure liberals would be screaming every step of the way that it would somehow tax the rich less, they always say that no matter what. Anything related with tax reform and you can be sure they will try to stop it with that sole argument. What they don`t understand is the rich, the true rich, don`t give a flying f-- about taxes in the least! THey don`t care if they pay a lot or if they pay a little, it is a non-issue with them. It like me or you paying either 50 cents or a dollar, you don`t feel it either way. THe fact is the tax system right now kills the little guy and drives him up the wall because the little guy ain`t got billions to fall back on. The little guy like myself is constantly trying to balance what he has and what he owes so he don`t end up in the street and we need a system that makes it so we don`t have to go through this living hell every year like the rich.
I may be forced to file an extension and work for a while to make enough money to pay a CPA. Turbotax is complete in their interviews and I am comfortable with their system. I just don't want to pay a cpa the equivalent to my refund if there is nothing to "honestly" do.
IMHO the FairTax will be the law of the land within the next two to three years but YOU have to get out here and agitate for it with me!
You HAVE heard the old saw about the lawyer who represents himself in court having a FOOL for a client? The same is true for taxes under the income tax system.
When you are standing in the midst of the lions den
-- Do not count the lions.... That was my line of thinking too.
Good thinking!
;>)
hey man I tell ya what...go to a CPA or a tax accountant. They can probably sift through it and find out where you are having issues and, if not for this year, then next year you might get something back.
Being in Iraq for the past year, I had to go get an accountant to do it for me. There was no way I could do anything about it either.
good luck.
I found the answer to this one. Demutualization cost basis is always $0. Unless I want to go to court over it.
Watchdog takes on IRS
Northern Minnesota accountant says mutual insurance policyholders wrongly taxed
BY SHERYL JEAN
Pioneer Press
A small-town accountant in northern Minnesota is locked in a dispute with the Internal Revenue Service over whether taxpayers are owed hundreds of millions of dollars in capital-gains tax refunds.
Charles Ulrich believes the IRS was wrong when it told certain insurance policyholders how much federal tax to pay on stock they received from mutual insurance companies that went public — a process called demutualization.
He hasn't been shy about letting the IRS — or anyone else, for that matter — know that he wants those taxes refunded to consumers.
So far, the IRS hasn't budged.
It's estimated that 15 million Americans received roughly $100 billion in payouts as more than a dozen mutually owned insurance companies — such as John Hancock, Metropolitan Life and Prudential — converted to publicly traded companies in the past five years. Mutual insurers are owned by their policyholder members... rest of article at http://www.twincities.com/mld/twincities/business/10479661.htm
I lack html skills.
Here's an excerpt - maybe it will help:
"To figure the basis of property you get as a gift, you must know its adjusted basis to the donor just before it was given to you. You also must know its fair market value (FMV) at the time it was given to you. If the FMV of the property at the time of the gift is less than the donor's adjusted basis, your basis depends on whether you have a gain or loss when you dispose of the property. Your basis for figuring gain is the same as the donor's adjusted basis, plus or minus any required adjustments to basis while you held the property. Your basis for figuring a loss is the FMV of the property when you received the gift, plus or minus any required adjustments to basis while you held the property. See Adjusted Basis in Publication 551, Basis of Assets."
Your advise is as I feared. I cannot claim the earned income tax credit. This makes a difference of $4300 on my taxes. If I had applied for food stamps instead of selling my stock I would be OK. Lessons learned the hard way. :sigh:
It is a lesson I have learned repeatedly, yet still I go back for further punishment.
http://www.freerepublic.com/focus/f-news/1355031/posts#587 scroll to post #587
You have to look at a pros and cons -- it may cost you more to pay the CPA, than the EIC you would be getting, so in that case, it may not be worth it after all.
But you should look into the NOL, you may be able to get money back from previous years taxes, which would be very helpful to you right about now, from the sound of it.
I did get advise. Because there is no record of where the stock actually came from there is no cost basis. However, I (we) were able to set a basis by using the actual dates on the certificates! I have a cost basis of 394$ more than enough to get me my eitc.
With my new job this should be the last time I am eligible for this but it really makes it possible to keep our house! We may sell our house just to take the profit from it to start over again, but we can make that descion at our leisure.
Thanks for all the replies and emails! This board really is full of compassionate people. No flames on my first thread post and it was a vanity.
Apparently I still can't spell advice...
"However, I (we) were able to set a basis by using the actual dates on the certificates! I have a cost basis of 394$ more than enough to get me my eitc."
Great!
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