Quote:
Originally Posted by davef
I think the definition of timing for long and short term sale would be the same.
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This is a dangerous assumption in general to make.
There are many cases in the realm of taxes where things are approximately similar but different in the precise details.
Some examples, I'm sure there are many more:
1. Dependent. The criteria for dependents differ for purposes of the child tax credit, the earned income tax credit, head of household filing status, education credits, child and dependent care credit, etc. A person who is your dependent for one of these may or may not be your dependent for another one of these.
2. Higher education expenses. These vary depending on whether your talking about QTP distributions, AOTC, LLC, ESA distributions, tuition and fees deduction, student loan interest deduction, education exception on early IRA distributions, etc. An expense that qualifies for one of these may not qualify for another of these.
3. Half year things. You can withdraw from a traditional IRA without the additional 10% penalty after you actually turn 59 1/2. But you can make your first RMD *the year in which you turn* 70 1/2.
4. MAGI. How to calculate your MAGI for different tax benefits differs. See
https://www.hrblock.com/tax-center/i...-gross-income/
5. How to calculate RMD divisors. For original owners, they calculate their RMD divisors by looking it up on a table each year. For inherited IRAs, they look at the table once then subtract one each subsequent year. (There's an even more convoluted examples for people with inherited IRAs who want to use the new IRS divisor tables in progress.)
In simple situations, which may be more common, perhaps these variances can be ignored. But in even slightly-less-than-simple situations, the variances can come into play and are worth knowing about if one wants to try to comply as well as possible.
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