Four tax return questions if anyone can help please

[Feu]

1) I sold my condo last year (2004 tax year).
a) The gain was LESS than US$250,000
b} I owned and lived in the condo for MORE than two years.
I therefore pass the 'ownership test' and 'use test' as per irs.gov

I should therefore not owe any taxes on the sale correct?
The reason I ask is that they use the word "may" >>
"If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases)."


It specifically states verbatim:
"Do NOT (capitalized by me for emphasis) report the sale of your main home on your tax return unless you have a gain and at least part of it is taxable". Report any taxable gain on Schedule D (Form 1040).

However, they mention using a worksheet; I assume I don't need to use the worksheet, since my case appears to be cut and dry.

2) I bought a home in 2004 (closed on home purchase 6 weeks before closing date of condo sale); is there any tax filing (anything to fill in on return or schedule to fill out) required for the house PURCHASE?

3) I received my 2004 tax information from the bank underwriting my mortgage:
The interest for 2004 is correct.

However, the 'tax paid year to date', in the same '2004 tax info' section, is only about 28% of the annual real estate taxes.
That seems very strange...
I will call the bank tomorrow, but I just thought there might be a logical reasobn why the number appears to be incorrect.
I assume I should simply be able to take the postcard from the atx assessor stating 'taxes billed for 2004' and prorate it for the portion of the year I owned the house (# of days from closing date of purchase until Dec 31 / 366)?

4) I did a 401K rollover/transfer from my old company's plan to my new company's plan.
The taxable amount on the 1099 form I received clearly states taxable amount = $0.
However, I assume it probably needs to be reported somewhere on the tax return or on a separate 'schedule' to be attached to the return.
I couldn't find a match using irs.gov's seach engine and typing "401k rollover".

I will search irs.gov more later tonight, since I haven't looked at the return yet.


If anyone here knows of a good forum where I can ask these questions, assuming irs.gov doesn't turn up any more answers, please let me know...

Thanks a lot!

[burninfool]

I would consult a tax attorney or CPA...I wouldn't trust anybody's tax advice over the internet.

[UALOneKPlus]

Former CPA here.

1) I sold my condo last year (2004 tax year).
a) The gain was LESS than US$250,000
b} I owned and lived in the condo for MORE than two years.
I therefore pass the 'ownership test' and 'use test' as per irs.gov

I should therefore not owe any taxes on the sale correct?
The reason I ask is that they use the word "may" >>
"If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases)."

Yes, you should not have to pay tax on the gain.

It specifically states verbatim:
"Do NOT (capitalized by me for emphasis) report the sale of your main home on your tax return unless you have a gain and at least part of it is taxable". Report any taxable gain on Schedule D (Form 1040).

However, they mention using a worksheet; I assume I don't need to use the worksheet, since my case appears to be cut and dry.

Are you doing your taxes manually?? Good God man, buy a tax program like TaxCut or TurboTax. Geez, don't be penny wise and pound foolish.

2) I bought a home in 2004 (closed on home purchase 6 weeks before closing date of condo sale); is there any tax filing (anything to fill in on return or schedule to fill out) required for the house PURCHASE?

No, just keep all your records for when you sell in the future.

3) I received my 2004 tax information from the bank underwriting my mortgage:
The interest for 2004 is correct.

However, the 'tax paid year to date', in the same '2004 tax info' section, is only about 28% of the annual real estate taxes.
That seems very strange...
I will call the bank tomorrow, but I just thought there might be a logical reasobn why the number appears to be incorrect.
I assume I should simply be able to take the postcard from the atx assessor stating 'taxes billed for 2004' and prorate it for the portion of the year I owned the house (# of days from closing date of purchase until Dec 31 / 366)?

Is this for the new house? If so, it may be correct if it's prorated. Call to be sure.

4) I did a 401K rollover/transfer from my old company's plan to my new company's plan.
The taxable amount on the 1099 form I received clearly states taxable amount = $0.
However, I assume it probably needs to be reported somewhere on the tax return or on a separate 'schedule' to be attached to the return.
I couldn't find a match using irs.gov's seach engine and typing "401k rollover".

I will search irs.gov more later tonight, since I haven't looked at the return yet.


If anyone here knows of a good forum where I can ask these questions, assuming irs.gov doesn't turn up any more answers, please let me know...

Thanks a lot!

I don't think the rollover needs to be reported, since the previous 401k custodian already told the IRS the taxable distribution was $0. However, get a tax program. Do not do your taxes manually, especially since it sounds like you have some more complex transactions than just a person who has wages and nothing else.

Goodness gracious... LOL

[CowboySlim]

Go to an enrolled agent - don't screw with TurboTax and that crap.

Rich people don't do their own taxes. Most poor people do, if they pay at all. Now having a professional do your taxes is no guarantee that you will become rich, if not so already. However, if you are not rich now but want to become rich, you never will if you act as if you were poor. Having a "poor person" mentality will preclude you from ever becoming rich.

Slim
Who has a rich tax accountant.

[Feu]

Go to an enrolled agent - don't screw with TurboTax and that crap.

Rich people don't do their own taxes. Most poor people do, if they pay at all. Now having a professional do your taxes is no guarantee that you will become rich, if not so already. However, if you are not rich now but want to become rich, you never will if you act as if you were poor. Having a "poor person" mentality will preclude you from ever becoming rich.

Slim
Who has a rich tax accountant.

I don't mind doing them myself, especially since I know my own finances and I would have to review what a tax preparer had done anyway to feel comfortable...

I used a preparer's return as a guideline and then every year just kept up with the changes.
Since I don't own my own business or work for myself, any credits / writeoffs / deductions are pretty straight forward...

I did my ex gf's return a year or two ago and got her back a little MORE than the preparer had done the year before...

A preparer is great when you don't feel comfortable doing it yourself
or when you have a complex return due to your personal financial / work transactions / situation.

I will try software though to help out and to be able to compare my numbers against.

[Feu]

Former CPA here.

1) I sold my condo last year (2004 tax year).
a) The gain was LESS than US$250,000
b} I owned and lived in the condo for MORE than two years.
I therefore pass the 'ownership test' and 'use test' as per irs.gov

I should therefore not owe any taxes on the sale correct?
The reason I ask is that they use the word "may" >>
"If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases)."

Yes, you should not have to pay tax on the gain.

It specifically states verbatim:
"Do NOT (capitalized by me for emphasis) report the sale of your main home on your tax return unless you have a gain and at least part of it is taxable". Report any taxable gain on Schedule D (Form 1040).

However, they mention using a worksheet; I assume I don't need to use the worksheet, since my case appears to be cut and dry.

Are you doing your taxes manually?? Good God man, buy a tax program like TaxCut or TurboTax. Geez, don't be penny wise and pound foolish.

2) I bought a home in 2004 (closed on home purchase 6 weeks before closing date of condo sale); is there any tax filing (anything to fill in on return or schedule to fill out) required for the house PURCHASE?

No, just keep all your records for when you sell in the future.

3) I received my 2004 tax information from the bank underwriting my mortgage:
The interest for 2004 is correct.

However, the 'tax paid year to date', in the same '2004 tax info' section, is only about 28% of the annual real estate taxes.
That seems very strange...
I will call the bank tomorrow, but I just thought there might be a logical reasobn why the number appears to be incorrect.
I assume I should simply be able to take the postcard from the atx assessor stating 'taxes billed for 2004' and prorate it for the portion of the year I owned the house (# of days from closing date of purchase until Dec 31 / 366)?

Is this for the new house? If so, it may be correct if it's prorated. Call to be sure.

4) I did a 401K rollover/transfer from my old company's plan to my new company's plan.
The taxable amount on the 1099 form I received clearly states taxable amount = $0.
However, I assume it probably needs to be reported somewhere on the tax return or on a separate 'schedule' to be attached to the return.
I couldn't find a match using irs.gov's seach engine and typing "401k rollover".

I will search irs.gov more later tonight, since I haven't looked at the return yet.


If anyone here knows of a good forum where I can ask these questions, assuming irs.gov doesn't turn up any more answers, please let me know...

Thanks a lot!

I don't think the rollover needs to be reported, since the previous 401k custodian already told the IRS the taxable distribution was $0. However, get a tax program. Do not do your taxes manually, especially since it sounds like you have some more complex transactions than just a person who has wages and nothing else.

Goodness gracious... LOL

Thanks a lot!
The only unresolved question is about the real estate taxes, since
it is NOT a new home; I closed in the middle of the year, so the amount reported should have been 45% (or so) of the full year's tax bill.
I'll call the bank later today.

I made some comments to Cowboy's post as to why I like to do it myself
and why I wouldn't get more using a preparer.

I had already started researching programs last night; I want to use one to compare against my own numbers.
Never bothered in the past, since the return was always very simple; at most some capital gains on a few stock trades...

I actually get a kick out of doing without a preparer - a sense of satisfaction; and I know that I obviously know my own financial transactions better than a stranger.
If my return were complex enough to warrant a preparer I would gladly do so.

It would probably take my longer to go to the preparer discuss all my transactions and then have to verify all the numbers and entries on the preparer-created return anyway.

Thanks again for nailing down three of my four questions!The fourth is something only the bank can, most likely, explain.

[overclockxp]

From the 1040 long instructions on page 22...

Lines 15a and 15b
IRA Distributions
You should receive a Form 1099-R showing the amount of any distribution from your individual retirement arrangement (IRA). Unless otherwise noted in the line 15a and 15b instructions, an IRA includes a traditional IRA, Roth IRA, simplified employee pension (SEP) IRA, and a savings taxincentive match plan for employees (SIMPLE) IRA. Except as provided below, leave line 15a blank and enter the total distribution on line 15b.
Exception 1. Enter the total distribution on line 15a if you rolled over part or all of the
distribution from one:
• IRA to another IRA of the same type
(for example, from one traditional IRA to
another traditional IRA), or
• SEP or SIMPLE IRA to a traditional
IRA.

Also, put “Rollover” next to line 15b. If
the total distribution was rolled over in a
qualified rollover, enter -0- on line 15b. If
the total distribution was not rolled over in eia
qualified rollover, enter the part not rolled
over on line 15b unless Exception 2 applies
to the part not rolled over. Generally, a
qualified rollover must be made within 60
days after the day you received the distribupart.
tion. For more details on rollovers, see
Pub. 590.

My wife rolled over a 401k into a ROTH IRA so we get to pay $700 in taxes.

[Feu]

From the 1040 long instructions on page 22...

Lines 15a and 15b
IRA Distributions
You should receive a Form 1099-R showing the amount of any distribution from your individual retirement arrangement (IRA). Unless otherwise noted in the line 15a and 15b instructions, an IRA includes a traditional IRA, Roth IRA, simplified employee pension (SEP) IRA, and a savings taxincentive match plan for employees (SIMPLE) IRA. Except as provided below, leave line 15a blank and enter the total distribution on line 15b.
Exception 1. Enter the total distribution on line 15a if you rolled over part or all of the
distribution from one:
• IRA to another IRA of the same type
(for example, from one traditional IRA to
another traditional IRA), or
• SEP or SIMPLE IRA to a traditional
IRA.

Also, put “Rollover” next to line 15b. If
the total distribution was rolled over in a
qualified rollover, enter -0- on line 15b. If
the total distribution was not rolled over in eia
qualified rollover, enter the part not rolled
over on line 15b unless Exception 2 applies
to the part not rolled over. Generally, a
qualified rollover must be made within 60
days after the day you received the distribupart.
tion. For more details on rollovers, see
Pub. 590.

My wife rolled over a 401k into a ROTH IRA so we get to pay $700 in taxes.

Thanks but mine was a 401K-to-401K transfer; there was no IRA involved.
Seems that the above doesn't apply?