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Posted by mendel1941 on November 30, 2006, 1:41 am
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As a retired couple, my wife and I look forward to a huge
distribution of taxable income (>$100k).
As our income - gross is usually in the $40K range, this
additional +$100k puts me in a much higher tax bracket.
Is there a way - legally to spread out this income over
several years and enjoy a lower Federal Income Tax bracket
and still use this lump-sum windfall to invest in any
securities that answer my criteria?
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Posted by rick++ on December 1, 2006, 9:23 pm
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Can you be more specific about the income increase? Because
that will guide tax minimumize strategies. Is it sale of a
business? Lump sum retirement distribution? Unused vacation
and sick days? Sale of investment?
<< ======================================================= >>
<< 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 >>
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<< Copyright (2006) - All rights reserved. >>
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Posted by Phil Marti on December 2, 2006, 8:22 pm
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> As a retired couple, my wife and I look forward to a huge
> distribution of taxable income (>$100k).
>
> As our income - gross is usually in the $40K range, this
> additional +$100k puts me in a much higher tax bracket.
>
> Is there a way - legally to spread out this income over
> several years and enjoy a lower Federal Income Tax bracket
> and still use this lump-sum windfall to invest in any
> securities that answer my criteria?
No, unless you qualify for lump-sum retirement distribution
averaging as described in IRS Publication 575.
--
Phil Marti
Clarksburg, MD
<< ======================================================= >>
<< 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 (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by Arthur Kamlet on December 2, 2006, 8:22 pm
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> As a retired couple, my wife and I look forward to a huge
> distribution of taxable income (>$100k).
>
> As our income - gross is usually in the $40K range, this
> additional +$100k puts me in a much higher tax bracket.
>
> Is there a way - legally to spread out this income over
> several years and enjoy a lower Federal Income Tax bracket
> and still use this lump-sum windfall to invest in any
> securities that answer my criteria?
It depends.
Will the payer agree tpo pay you in installments?
This is especially popular when taking back a mortghage on
sale of real estate. In such cases you recognize gain only
as you are paid.
__
Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH
<< ======================================================= >>
<< 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 (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by ed on December 2, 2006, 8:41 pm
Please log in for more thread options mendel1941@ainop.com wrote:
> As a retired couple, my wife and I look forward to a huge
> distribution of taxable income (>$100k).
>
> As our income - gross is usually in the $40K range, this
> additional +$100k puts me in a much higher tax bracket.
>
> Is there a way - legally to spread out this income over
> several years and enjoy a lower Federal Income Tax bracket
> and still use this lump-sum windfall to invest in any
> securities that answer my criteria?
No. All forms of income averaging went out long ago
(except for Farmers), but you don't say when it will occur,
nor whether it's salary-bonus or long term capital gain, or
short term capital gain, or pension distribution, or what.
Aso are you on withholding or dio you pay installments?
With more information we could give you more specific
advice.
If it's this year, you'll pay the tax on it by April 15,
2007. If it's in 2007 pay your 2007 installments on the
basis of 1/4 of year 2006 tax, then pay the tax on the
windfall in April 2008. Then for 2008 revert to either
estimating full year's income/tax to pay 90% of 1/4 of it
each quarter, or use the Annualized Income Method to figure
your installments.
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 (2006) - All rights reserved. >>
<< ======================================================= >>
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