We got hacked and had to shut down, rebuild and are back here with new cautionary tales about taxes. Since we last met, we’ve had some interesting developments in the law. For example, you have until the end of January for your retirement plan or IRA to make a tax deductible contribution to a charity retroactive to 2012 taxes. So, if you have money in your IRA and are looking at a big tax bill for 2012, you can still save some money. This is a great deal.
Tag Archives: income taxes
“Because your mom died in 2010, she has no increase in basis to date of death value. We have established that the amount is $150,000. Section 1022 of the Internal Revenue Code permits us to allocate $1.3 Million to the value of assets. We will have to file a form 706 (which will be late, its due within 9 months of the date of death). This could present a problem because the Internal Revenue Service could elect to disallow the basis increase”, the Accountant droned to Suzie. “Your mom’s estate was $900,000, so we can apply the entire amount to the the estate and there should be no taxes due.” Suzie breathed a sigh of relief until she heard the accountant say, “of course if the IRS refuses to allow the step up in basis, your taxes will be $90,000 Federal and $30,000 state.” Suzie left in tears and cursed the family attorney for not filing the Federal Estate Tax return on time silently praying that the IRS would allow the retroactive election.
Tax Tip of the Day
Individual income taxes that are on extension are due October 15. There are pretty much no more extensions permitted.