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Old 07-04-2020, 03:37 PM   #21
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I got it, I got it, I got it!!! I drew my pictures, calculated my answers and got them all correct! I now have this puppy down!

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Old 07-04-2020, 03:57 PM   #22
Recycles dryer sheets
 
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New scenario:

Ordinary Income: $93,187
minus std deduction: $25,716
Taxable Income: $67,471 (10 & 12%)
Capital Gains + 2,321 (0%)
Total: $69,792

Now, add $143,750 in income for the sale of my part of a house that I inherited. Where does that all play out? Just Ordinary Income? 22% over the $80,251? and then my (measly) capital gains are taxed at 15% on top of that stack?
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Old 07-04-2020, 04:12 PM   #23
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I got it, I got it, I got it!!! I drew my pictures, calculated my answers and got them all correct! I now have this puppy down!

way to go!! I knew those crayons would help .........pictures and 1K words
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Old 07-04-2020, 04:17 PM   #24
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Originally Posted by klucich View Post
New scenario:

Ordinary Income: $93,187
minus std deduction: $25,716
Taxable Income: $67,471 (10 & 12%)
Capital Gains + 2,321 (0%)
Total: $69,792

Now, add $143,750 in income for the sale of my part of a house that I inherited. Where does that all play out? Just Ordinary Income? 22% over the $80,251? and then my (measly) capital gains are taxed at 15% on top of that stack?
Was that a residence or a rental? What was the cost basis of the house?
Capital assets generally get a step-up in basis to date-of-death value so there may be only a small gain from date-of-death to sale price. Ask the executor.
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Old 07-04-2020, 06:12 PM   #25
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Quote:
Originally Posted by klucich View Post
New scenario:

Ordinary Income: $93,187
minus std deduction: $25,716
Taxable Income: $67,471 (10 & 12%)
Capital Gains + 2,321 (0%)
Total: $69,792

Now, add $143,750 in income for the sale of my part of a house that I inherited. Where does that all play out? Just Ordinary Income? 22% over the $80,251? and then my (measly) capital gains are taxed at 15% on top of that stack?
Assume that the $25,716 isn't really the standard deduction but are itemized deductions since standard deduction for MFJ for 2020 is $24,800.

$67,471 is taxable ordinary income, not taxable income... taxable income is $69,792 (income of $95,508 less deductions of $25,716).

From what you wrote in the other thread, the sale is likely to be the proceeds from the sale of LLC shares and is likely LTCG.... but that part may get a bit complicated.
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Old 07-04-2020, 06:41 PM   #26
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Was that a residence or a rental? What was the cost basis of the house?
Capital assets generally get a step-up in basis to date-of-death value so there may be only a small gain from date-of-death to sale price. Ask the executor.
House $387,500. Cost basis $287,500 / 2 = $147,500 for my part.
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Old 07-04-2020, 06:44 PM   #27
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Assume that the $25,716 isn't really the standard deduction but are itemized deductions since standard deduction for MFJ for 2020 is $24,800.

$67,471 is taxable ordinary income, not taxable income... taxable income is $69,792 (income of $95,508 less deductions of $25,716).

From what you wrote in the other thread, the sale is likely to be the proceeds from the sale of LLC shares and is likely LTCG.... but that part may get a bit complicated.
Hmmm. So if it were considered LTCG at 15%, that sounds better than 22 - 24%, right?
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Old 07-04-2020, 06:46 PM   #28
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Based on what you wrote in the other thread, I think you mean that your cost basis is $100,000... so the gain is $287,500 and your half of the gain is $147,500.
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Old 07-04-2020, 06:46 PM   #29
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Hmmm. So if it were considered LTCG at 15%, that sounds better than 22 - 24%, right?
Yup.
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Old 07-04-2020, 06:50 PM   #30
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Based on what you wrote in the other thread, I think you mean that your cost basis is $100,000... so the gain is $287,500 and your half of the gain is $147,500.
Thank you. Im not at my desk with that information anymore.
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Old 07-07-2020, 06:38 AM   #31
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The web pages given by kaneohe and pb4uski use the same tool. That seems the best of the web-based ones.

For spreadsheets, Excel1040 and the Case Study Spreadsheet seem best.

Which will be best for you is a combination of your specific tax situation and a matter of taste.
Wow - thanks for those links/downloads. I do my taxes by hand every year and build my own stripped down excel sheet for calculations. These sheets will make it *much* easier each year.

Thank you again!
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Old 07-19-2020, 07:22 PM   #32
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Heh, heh, Just a suggestion. Hire a professional (like a CPA - not a store front or "big name" tax preparer.) My taxes are medium complicated (Fed, two states and a small business). I think I paid $600 this year. Maybe that sounds like a lot, but I'm guessing OP's would be half or less of that (SWAG).

Then, if you get ambitious next year, use the professionally prepared taxes as a template. Naturally, YMMV.
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Old 07-20-2020, 04:07 AM   #33
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Heh, heh, Just a suggestion. Hire a professional (like a CPA - not a store front or "big name" tax preparer.) My taxes are medium complicated (Fed, two states and a small business). I think I paid $600 this year. Maybe that sounds like a lot, but I'm guessing OP's would be half or less of that (SWAG).

Then, if you get ambitious next year, use the professionally prepared taxes as a template. Naturally, YMMV.
Thanks, I might do that.
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Old 07-20-2020, 05:48 AM   #34
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The sale shouldn't complicate things too much unless you have held the inherited house for a period of time of great appreciation. The cost basis house you inherited was stepped up on the date of death, you would only pay LTCG taxes on your share of appreciation since the time of death.
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Old 07-20-2020, 06:05 AM   #35
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The sale shouldn't complicate things too much unless you have held the inherited house for a period of time of great appreciation. The cost basis house you inherited was stepped up on the date of death, you would only pay LTCG taxes on your share of appreciation since the time of death.
Actually. is has appreciated quite a bit over the last 10 years, but I've already figured the taxes and it should not be too bad.
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Old 07-20-2020, 07:41 AM   #36
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Thank you. Will have to do some re-figuring.
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Originally Posted by pb4uski View Post

I just used this calcultor to tax plan for this year. I had already used another calculator and found I would have a tax of $350 before jumping to another bracket, the dinkytown calcultaor came up with $353 before jumping to another bracket. As it stands, my LTCGs are at 0% and my tIRA are at 10%. Adding $100 to my LTCGs or my tIRA withdrawals increases my tax my $10 (10%) or $25 (25%) respectively.
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Old 07-20-2020, 08:05 AM   #37
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Heh, heh, Just a suggestion. Hire a professional (like a CPA - not a store front or "big name" tax preparer.) My taxes are medium complicated (Fed, two states and a small business). I think I paid $600 this year. Maybe that sounds like a lot, but I'm guessing OP's would be half or less of that (SWAG).

Then, if you get ambitious next year, use the professionally prepared taxes as a template. Naturally, YMMV.

If you plan on getting ambitious as suggested, make sure your CPA gives you the worksheets for the calculations. I had planned to "get ambitious this year, but then found I didn't have any of the worksheets in my tax preparation.
I would ask for them, but when I got the $600 bill from him, I complained that he increased the bill by $100, when the prep was about half as complicated as the year before because we retired and also no longer were self employed.
He lowered it to $400. I won't use him again.
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Old 07-23-2020, 06:53 AM   #38
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Question about the dinkytown calculator. https://www.dinkytown.net/java/1040-tax-calculator.html

I put in all my numbers, LTCGs, Divi's, HSA contribution and tIRA withdrawals. If I add $100 more to tIRA withdrawals, I get $25 more tax, but, just above the bar chart there is a paragraph that ends with, "This puts you in the 12% tax bracket." We know $25 tax on $100 is 25%. So, am I missing something or is their calculator just not reporting what I expect?
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Old 07-23-2020, 07:43 AM   #39
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Question about the dinkytown calculator. https://www.dinkytown.net/java/1040-tax-calculator.html

I put in all my numbers, LTCGs, Divi's, HSA contribution and tIRA withdrawals. If I add $100 more to tIRA withdrawals, I get $25 more tax, but, just above the bar chart there is a paragraph that ends with, "This puts you in the 12% tax bracket." We know $25 tax on $100 is 25%. So, am I missing something or is their calculator just not reporting what I expect?
try putting your numbers here https://www.mortgagecalculator.org/c...calculator.php

supposedly the same calculator ........and see if you get the same thing.
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Old 07-23-2020, 07:58 AM   #40
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Question about the dinkytown calculator. https://www.dinkytown.net/java/1040-tax-calculator.html

I put in all my numbers, LTCGs, Divi's, HSA contribution and tIRA withdrawals. If I add $100 more to tIRA withdrawals, I get $25 more tax, but, just above the bar chart there is a paragraph that ends with, "This puts you in the 12% tax bracket." We know $25 tax on $100 is 25%. So, am I missing something or is their calculator just not reporting what I expect?
I wonder if you might be in that inbetween where $100 of additional ordinary income is being taxed at 12% and ends up pushing $100 of LTCG/qualified dividends from 0% to 15%... so $27 increase in tax that somehow gets rounded down to $25.

So for example, if your income was $80k before any adjustments and your ordinary income was in the 12% bracket but not near the top of the 12% bracket... if you add $100 of tIRA withdrawals that is taxed at 12% and pushed $100 from the 0% preferenced income bracket to the 15% preferenced income bracket.

Or maybe the reported tax bracket is just wrong.
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