Leaderboard

I would not ask too many questions of Rita. She has this really large back yard....

That was just a general statement for illustrative purposes. Any resemblance to actual persons, living or dead, is strictly coincidental.

Is pink your preferred color, or does it matter when you are blindfolded?

Well, I got a good chuckle out of "It's a tax return! Not tracking meteors here." Reminds me of that time I called ATX in January 2013 and said, "Look. I want my software to work. Taxes are not sexy. I don't care about the bells and whistles and pink furry handcuffs and blindfolds. Please just give me software that works." Then I got a hum dinger computer, and it worked. Go me.

Sorry, I meant non qualified annuity. I had wine for dinner, I mean with dinner, I forget.

Well, she hasn't given me a hug yet, so I am safe at this point...

Most distributions (both periodic and nonperiodic) from qualified retirement plans and nonqualified annuity contracts made to you before you reach age 59½ are subject to an additional tax of 10%. This tax applies to the part of the distribution that you must include in gross income. Additional exceptions for nonqualified annuity contracts. The tax does not apply to distributions from: A deferred annuity contract to the extent allocable to investment in the contract before August 14, 1982, A deferred annuity contract under a qualified personal injury settlement, A deferred annuity contract purchased by your employer upon termination of a qualified employee plan or qualified employee annuity plan and held by your employer until your separation from service, or An immediate annuity contract (a single premium contract providing substantially equal annuity payments that start within 1 year from the date of purchase and are paid at least annually).

Agree with MDEA. If this was life insurance money invested in the annuity, it was after tax money. Only the earnings should be subject to penalty. This should be apparent in box 2 of the 1099.

If this was life insurance money the only tax is on the money the annuity made. You are not taxed on removing your own money. Since it was only in 2 years how much could it have made. Look at the contract to make sure this was not 401k money.

Late last week, the IRS exacerbated the marriage penalty by offering a very large reward for unmarried taxpayers who co-own a home: double the mortgage interest deduction available to married taxpayer. MORE: http://www.forbes.com/sites/anthonynitti/2016/08/01/irs-increases-marriage-penalty-unmarried-cohabitants-to-get-twice-the-mortgage-interest-deduction/#5ede428914c8

But is it taxable? It was written by the director and published by the agency - does it further the exempt purpose of the organization? Does the director receive any remuneration for writing the book? Do the people selling the book get paid or is it all volunteer labor? Selling items to raise funds is not always a taxable activity to a non-profit. It all depends on facts and circuses, as Jerry Mealer used to say.

I'd say this issue has long since been resolved and at least one member hasn't been active in over three years, as is this topic that is 3.5 years old that you resurrected to promote your hosting business.

But it's not a "non-qualified plan" in that those are usually for highly compensated employees. He took life insurance money, not retirement funds, and bought a contract for future income. By withdrawing funds, he is not using retirement funds early. It's more like a Roth distribution of principal (but not subject to Roth 5-years-in rules). The only penalty should be from the insurance company according to their contracts. In fact only any growth withdrawn should be taxable income; the rest was non-taxable life insurance proceeds.

You are correct. I've been down this road a few times and exception 1 applies to 401Ks, and other qualified plans as Abby Normal indicated and in my practice qualified plans for public safety officers at age 50. Non qualified plans don't have this advantage. I admire your efforts to research and help your client.

I disagree I use PPL on a weekly basis and have found it to be of great use. They usually answer with in two minutes and try very hard to answer questions. I always have a signed 2848 on file or ready to fax.

Welcome to the club. For 11 years we have used ATX on a terminal server, though they don't claim to support it, but it always worked until they switched to the crappy Raven database this year. The first initial install of the program up to the 12.7 version works multi-user in terminal server. However I could not install the 12.8 or 12.9 patch on my server without rendering the program useless. On another test server, once 12.8 goes on, it seems to change a registry key that makes the program look for other running instances. Once that happens even after uninstalling and deleting every file installed still I get that same message even at the initial install. So in a nutshell they have shut the door on use multi-users who use terminal services. A stupid careless move that will cost them many customers. To e-file I have to export the 4562 held returns over to a function machine with 12.8 running just to e-file. Even in their ideal installation environment, the program sucks and is unstable. Next year's release should be absolutely at no charge to the many thousands of customers who they have basically destroyed their business this year. If they are not going to allow multi-user environments another company will have our business next year, we will not waste resources on using their software like it's 1995. Total lack of any due care during development. Did you notice the tech's blog at ATX? He mentions it taking 2 hours for QA to approve and release the update? What type of testing is that? I could barely open the program and look at 10 returns in that short length of time.