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  • ReachELS

    Thank you Alan.

    Not sure how I quoted my Google search to not find that link.

    This is a classic illustration of “The Law of Unintended Consequences”. The high-tax state legislators create a silly scheme to circumvent the SALT limitation that they had to know would not fly. The IRS (naturally) issues new guidelines to thwart their efforts but, in doing so, impacts not only the frivolous SALT scheme but legitimate charitable programs as well.

    These programs (NAP, Conservation Easements, etc) were caught in the crossfire…and will suffer as a result.

    A pox on all their houses.

    in reply to: Covid-19 Stimulus Check Income Phaseout #5788

    Just spitballing here but…

    If the law says under 17 and it is a 2020 tax credit, I would guess that your nephew would be ineligible as he turned 17 during 2020.

    That said, if your brother recently received $500 for his son as part of the tax credit advance, there doesn’t appear to be an appetite in the IRS for a clawback of the advance.

    in reply to: Covid-19 Stimulus Check Income Phaseout #5645

    Thank you!

    I plan to reduce my pension payment withholding $300/mo from May forward. It’s not exactly $2,400 in hand immediately but it’s better than waiting until next April.

    I really hope we are both right :).

    in reply to: Covid-19 Stimulus Check Income Phaseout #5530

    Related to the phase-out, I would appreciate anyone’s take on my particular situation.

    My understanding is that:
    1. The actual law allows a tax credit of $600-$1,200 ($1,200-$2,400 MFJ) to be applied against your 2020 taxes based on a sliding AGI scale.
    2. An advance is to be paid based on your 2018 tax return (or 2019 if already filed).

    We did a Roth conversion in 2019 that made us ineligible for the advance. Without this conversion, we would have received the full $2,400. I do not anticipate doing a conversion this year so our 2020 AGI will come in below the $150k AGI threshold.

    I have read several articles that suggest that we will be eligible for the $2,400 tax credit when we file our 2020 taxes next year.

    Can anyone confirm/deny this understanding?

    in reply to: Full-Time Student? #5210

    Thank you for your reply…and I agree with you.

    Actually, it is my great-nephew. I have done the family’s returns ever since his father passed away.

    Now that he’s out of school, he goes solo in 2020.

    in reply to: Withholding from Roth Conversion, Then Replacing w/h in TIRA #5001

    Thank you Alan….very clever.

    It seems like I have two possible approaches:

    1. Convert $100k from the tira while having $22k withheld and subsequently rolling $22k from savings into the Roth within 60 days OR

    2. Convert $100k from the tira with no withholding. Then do a second tira withdrawal for $22k and withhold (most if not) all of it. Within 60 days, I would roll $22k from savings back into the tira.

    Seems as though you end up at the same place…+$100k in Roth, -$100k in tira, -$22k savings.

    #2 seems cleaner to me?

    in reply to: Withholding from Roth Conversion, Then Replacing w/h in TIRA #4997

    Sorry to bump a 6 month old thread but I found this discussion intriguing and wanted to better understand the purpose.

    Assume that I want to convert $100k of a tira to a Roth and will incur $22k of federal taxes. I could simply make a $22k estimated tax payment at the time of the conversion or…as this thread suggests, withdraw $22k from my tira, withhold 99% of it (Vanguard’s max) and pay back the $22k from other funds within 60 days.

    While I can see that the rollover approach works, what advantage does this approach provide versus simply making an estimated tax payment? Does it have something to do with the $22k withholding being considered as paid equally throughout the year (even if it was not)? It does seem that you would avoid the annualized income installment test on Form 2210.

    Thank you in advance,


    in reply to: Sale of Timeshares #1782


    This is the 2nd time in the last few weeks that you have very promptly responded to my tax inquiry…thank you so much. I am very appreciative.

    Unfortunately – and also for the 2nd time – your response was not what I was hoping to hear!

    in reply to: UP Court Case Victory #1753

    Thank you Kaye.

    I re-read the court opinion a bit more closely this morning and (begrudgingly) came to the same conclusion.

Viewing 9 posts - 1 through 9 (of 9 total)