On Jan 31, 7:05*pm, JaxKayaker <prh...[at]gmail.com> wrote:
- quote -


Phil, you didn't make it clear exactly when your wife took the
distribution from her 401(k). If she took it while she was a Colorado
resident, it was properly subject to Colorado tax. If she didn't take
the distribution until after she moved to Florida, Colorado did not
have the power to tax that income. Federal law (4 USC Sec. 114)
prohibits states from taxing nonresidents on certain kinds of
retirement income; distributions from Sec. 401 plans, including 401(k)
s, are among the protected kinds of income. This law applies to
distributions received on or after January 1, 1996. It does not
matter where she performed the services to earn the income that was
contributed to the plan.

Also I wonder about the statute of limitations on the Colorado
assessment. Did you file a timely part-year resident Colorado return
for 2001? Was the 401(k) distribution disclosed on that return? If
the answers to those questions are yes, the Colorado assessment may
have been time barred. I hope you had professional help in dealing
with this matter with Colorado.

As for deducting the tax, as a cash method taxpayer you deduct state
taxes when you pay them. It doesn't matter what year they apply to.
Yes, you can deduct the tax on your 2009 federal return. Just
remember that state taxes, like some other itemized deductions, are
not deductible for AMT purposes, so the deduction may put you into an
AMT.

Katie in San Diego

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On Jan 31, 10:05*pm, JaxKayaker <prh...[at]gmail.com> wrote:

- quote -

The deduction is for the year in which you paid the state income
taxes. Your question implies that you made that payment sometime this
month.

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JaxKayaker wrote:
- quote -

that you pay late. You can't deduct your late payment penalties
but it sounds as though you didn't have any.

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Eight years ago I moved from Colorado to Florida. My wife who was
not working in Colorado at the time did cash in some of her 401k at
the time we moped to Florida. Approximately a year later I Paid my
taxes for 2001 and paid Federal taxes on her 401k distribution. I did
not even think about the state taxes needing to be paid. Anyway Last
year the State of Colorado came after us for the past due taxes plus
penalties and interest. We finally settled for the original tax bill
as they could not provide proof that any attempt had been made to
contact us about the tax bill during the intervening 8 years
..

My question is, will I be able to deduct these late paid taxes
from 2001 on my 2009 federal tax return?



Thanks Ahead

Phil

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >