|
Posted by ed on June 19, 2008, 11:35 am
Please log in for more thread options
On Jun 18, 9:40Â am, KEBSCHU...@aol.com wrote:
>
>
>
> > We have seen where you lost all use of the $270K in 2008 and will be
> > paying AMT. �That means you won't have to add any refund on it to
> > taxable income next year.
>
> > I ipersonally don't agee with his statement: �"The fact that you are
> > not an accrual basis taxpayer is irrelevant." �It's EITHER Cash or
> > Accrual, not both.
>
> > ed
>
> Ed:
>
> Where does it state in section 164 of the Internal Revenue Code that
> derk had to be an accrual taxpayer to deduct a state income tax
> accrued
> on income earned in 2007 but paid in 2008? Â As I read section 164, it
> only
> speaks of tax accrued in a year.
>
> Where in section 56(b)(1)(D) of the Internal Revenue Code does it
> state
> that a tax deducted under paragraphs (1), (2), or (3) of section
> 164(a) in a year that the regular tax was paid is to be excluded from
>  Alternative  Minimum Taxable Income?  The instruction on Line 7 of
> Form 6251 that does that has cost the Treasury billions of dollars
> since
> 1988 as a result of neither the income used for a state income tax
> overpayment nor the refund of the overpayment being taxed when
> the overpayment was in a year that the regular tax was paid and the
> refund was
> in a year the AMT was paid.
>
> Section 56(b)(1)(D) precludes refunds that provided only a limited
> long-term capital gains rate based tax benefit in the prior year when
> the AMT was paid from being included in AMTI.
> Without section 56(b)(1)(D), both the income and the refund related to
> the limited long-term capital gains rate based tax benefit would be
> included in AMTI and therefore double taxed.
>
> Sometimes, IRS and states taxing agencies go off track with their
> instructions to taxpayers. Â Taxpayers just have to be alert.
> Example: Â North and South Carolina had a requirement for years prior
> to 2006 that non-residents with income in their state had to file MFS
> if his/her spouse did not have income in their state. Â The problem
> with that was that North Carolina did not have a statute with that
> requirement and if they did it violated the privileges and immunities
> clause in the US Constitution. Â Here are links to threads that
> discussed that issue in 2000 and 2006.
>
> http://groups.google.com/group/misc.taxes.moderated/browse_frm/thread...
>
> http://groups.google.com/group/misc.taxes.moderated/browse_frm/thread...
>
> Cheers,
>
> WDK
>
> --
> << ------------------------------------------------------- >>
> << The foregoing was not intended or written to be used, Â >>
> << nor can it used, for the purpose of avoiding penalties  >>
> << that may be imposed upon the taxpayer. Â Â Â Â Â Â Â Â Â >>
> << Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â
   >>
> <<  The Charter and the Guidelines for submitting posts  >>
> <<  to this newsgroup as well as our anti-spamming policy  >>
> << Â Â Â Â Â Â Â Â Â are atwww.asktax.org. Â Â Â Â Â Â Â Â >>
> << Â Â Â Â Copyright (2007) - All rights reserved. Â Â Â Â >>
> << ------------------------------------------------------- >>
WDK: Your issue about not paying the same tax rate for State Tax
refunded (1040 line 10) as you deducted on Schedue A is valid and as I
recall the IRS corrected this. However, you are reading "accrued or
paid" as meaning *both* for the same taxpayer, whereas the intent is
obviously to mean "whichever accounting method that taxpayer used".
ed
--
<< ------------------------------------------------------- >>
<< 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. >>
<< ------------------------------------------------------- >>
| 
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap