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#7
08-09-2005, 04:59 AM
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 Re: Low income, capital gain and est. taxes. "Barry Margolin" <barmar[at]alum.mit.edu> wrote: - quote - > "Mike Lewis" <jmpj[at]cableone.net> wrote:
If a return was not filed, yes.> > "Joe C" <no-more-spam[at]no-spam.com> wrote: > > > My retired in-laws have limited income and have not > > > had to file income taxes for many years. This year, > > > they sold a second house they owned and they had > > > capital gains on this sale. Since they owed NO income > > > tax last year, can I safely tell them they do not have > > > to pay estimated tax on their gain now? Can they > > > wait until they file for 2005? > > If they owe 2005 tax and do not make any estimated tax > > payments, they will be charged a penalty for underpayment of > > estimated tax (about 5-6% if tax paid on time). Lots of > > people choose not to make the estimates knowing there is a > > penalty involved, but "being safe" is something you'll have > > to decide for yourself:-) > Doesn't the "safe harbor" rule protect them from the > penalty? If your withholding and estimated tax payments > exceeds your previous year's tax liability, there's no > penalty. Does this protection go away if your previous > year's liability was zero? -- David M. Woods, EA, ChFC, CLU Woods Financial Services Norwood, MA 02062 www.woods-financial.com << ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== > |
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#6
08-07-2005, 03:57 AM
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| Re: Low income, capital gain and est. taxes. Joe C wrote: - quote - > My retired in-laws have limited income and have not
Yes.> had to file income taxes for many years. This year, > they sold a second house they owned and they had > capital gains on this sale. Since they owed NO income > tax last year, can I safely tell them they do not have > to pay estimated tax on their gain now? Can they > wait until they file for 2005? -- Alan http://taxtopics.net << ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== > |
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#5
08-07-2005, 03:57 AM
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| Re: Low income, capital gain and est. taxes. "Mike Lewis" <jmpj[at]cableone.net> wrote: - quote - > "Joe C" <no-more-spam[at]no-spam.com> wrote:
Doesn't the "safe harbor" rule protect them from the> > My retired in-laws have limited income and have not > > had to file income taxes for many years. This year, > > they sold a second house they owned and they had > > capital gains on this sale. Since they owed NO income > > tax last year, can I safely tell them they do not have > > to pay estimated tax on their gain now? Can they > > wait until they file for 2005? > If they owe 2005 tax and do not make any estimated tax > payments, they will be charged a penalty for underpayment of > estimated tax (about 5-6% if tax paid on time). Lots of > people choose not to make the estimates knowing there is a > penalty involved, but "being safe" is something you'll have > to decide for yourself:-) penalty? If your withholding and estimated tax payments exceeds your previous year's tax liability, there's no penalty. Does this protection go away if your previous year's liability was zero? -- Barry Margolin, barmar[at]alum.mit.edu Arlington, MA << ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== > |
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#4
08-04-2005, 12:43 PM
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| Re: Low income, capital gain and est. taxes. - quote - > > My retired in-laws have limited income and have not
I disagree (as do the other people who responded). They will> > had to file income taxes for many years. This year, > > they sold a second house they owned and they had > > capital gains on this sale. Since they owed NO income > > tax last year, can I safely tell them they do not have > > to pay estimated tax on their gain now? Can they > > wait until they file for 2005? > If they owe 2005 tax and do not make any estimated tax > payments, they will be charged a penalty for underpayment of > estimated tax (about 5-6% if tax paid on time). not be charged a penalty for 2005 because they had no tax liability for 2004 and were not required to file for 2004. From IRS Pub. 505 (Dec. 2004 edition): "You do not owe a penalty if you had no tax liability last year and you were a U.S. citizen or resident for the whole year. For this rule to apply, your tax year must have included all 12 months of the year. "You had no tax liability for 2003 if your total tax was zero or you did not need to file an income tax return." Bob Sandler << ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== > |
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#3
08-04-2005, 12:24 PM
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| Re: Low income, capital gain and est. taxes. Mike Lewis wrote: - quote - > "Joe C" <no-more-spam[at]no-spam.com> wrote:
I disagree, Mike. As long as they had NO tax liability in> > My retired in-laws have limited income and have not > > had to file income taxes for many years. This year, > > they sold a second house they owned and they had > > capital gains on this sale. Since they owed NO income > > tax last year, can I safely tell them they do not have > > to pay estimated tax on their gain now? Can they > > wait until they file for 2005? > If they owe 2005 tax and do not make any estimated tax > payments, they will be charged a penalty for underpayment of > estimated tax (about 5-6% if tax paid on time). Lots of > people choose not to make the estimates knowing there is a > penalty involved, but "being safe" is something you'll have > to decide for yourself:-) 2004 they meet a "safe harbor" condition for not being subject to underwithholding penalty. They can wait until April to pay the 2005 tax due. << ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== > |
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#2
08-02-2005, 02:53 PM
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| Re: Low income, capital gain and est. taxes. Joe C wrote: - quote - > My retired in-laws have limited income and have not
Yes.> had to file income taxes for many years. This year, > they sold a second house they owned and they had > capital gains on this sale. Since they owed NO income > tax last year, can I safely tell them they do not have > to pay estimated tax on their gain now? Can they > wait until they file for 2005? -- Alan http://taxtopics.net << ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== > |
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#1
08-02-2005, 02:34 PM
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| Re: Low income, capital gain and est. taxes. Joe C at no-more-spam[at]no-spam.com wrote: - quote - > My retired in-laws ... sold a second house they owned and they had
Sure. Any chance they have some accumulated capital losses> capital gains on this sale. Since they owed NO income > tax last year, can I safely tell them they do not have > to pay estimated tax on their gain now? Can they > wait until they file for 2005? from prior years losses in the market? Might be worth filing those old returns to report the losses that can now be offset by gains. All freely provided advice guarantee correct or double your money back Frank S. Duke, Jr. CPA Cincinnati, OH USA << ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== > |
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08-02-2005, 02:14 PM
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| Re: Low income, capital gain and est. taxes. "Joe C" <no-more-spam[at]no-spam.com> wrote: - quote - > My retired in-laws have limited income and have not
If they owe 2005 tax and do not make any estimated tax> had to file income taxes for many years. This year, > they sold a second house they owned and they had > capital gains on this sale. Since they owed NO income > tax last year, can I safely tell them they do not have > to pay estimated tax on their gain now? Can they > wait until they file for 2005? payments, they will be charged a penalty for underpayment of estimated tax (about 5-6% if tax paid on time). Lots of people choose not to make the estimates knowing there is a penalty involved, but "being safe" is something you'll have to decide for yourself:-) mike lewis, cpa << ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== > |
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#-1
08-01-2005, 01:43 AM
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| Low income, capital gain and est. taxes. My retired in-laws have limited income and have not had to file income taxes for many years. This year, they sold a second house they owned and they had capital gains on this sale. Since they owed NO income tax last year, can I safely tell them they do not have to pay estimated tax on their gain now? Can they wait until they file for 2005? Thanks, Joe << ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== > |
| Tags |
| capital, est, gain, income, low, taxes |
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