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Roberts

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  1. Completely unrelated but interesting case: https://www.propublica.org/article/lord-of-the-roths-how-tech-mogul-peter-thiel-turned-a-retirement-account-for-the-middle-class-into-a-5-billion-dollar-tax-free-piggy-bank Summary: Guy who founds Paypal (before it went public) is given stock with an ultra low cost basis as part of his salary contract. The cost basis is deemed $1,700 so he puts the shares into his Roth IRA. The company goes public shortly after that and those shares are worth well over $100m. He does this multiple times with different companies and his Roth IRA is now worth $5 Billion which he'll never pay $1 in tax on if he holds off on withdrawing. Yes it's all strictly prohibited but the IRS never audited him. You would think a $1,700 Roth value going up 9 figures in one year might draw an audit flag. First, he was a principal in the company so that's a violation. Second, he contributed stock and not cash which is prohibited. Third he valued the shares at far below market value and the IPO disclosures of the firm outline they were below market value.
  2. Client had a significant refund which we applied to next year. Client gets a letter stating part of it was taken and paid to the state for an outstanding tax bill from 2019. I know there was no tax due. Spent WAY too much time trying to figure it all out. Client gets mad that I haven't done enough. State hangs up on my 3-4x and one lady informs me they didn't pay estimated taxes we claimed (the estimated tax is paid by her IRA so we know it was paid). Check comes from the state for the amount the IRS gave them with no explanation. When I ask the state again they finally admit there was no outstanding balance and no clue why the IRS sent them the money. Rep can't explain why I was lied to repeatedly.
  3. Edit: I've had multiple trusts where the attorney wants the trust to pay the higher tax bill on capital gains simply because they recognize the beneficiaries don't save anything and can't afford to pay taxes on a large capital gains tax bill every few years. I also have a family where I do the 1040 for the beneficiaries, the attorney writes a check to the IRS for the tax amount owed and then deduct that from their income check in late February.
  4. The Trustee / fiduciary has discretion usually. With ultra low interest rates, many states have written rules that allow for the fiduciary to include capital gains in total income and have them distributed to the beneficiaries. I 100% agree with having the client contact the attorney and see if that is possible. 30 years ago, it was common for a retired person to have a portfolio of 80% bonds and 20% equities. Today it is very common to have a portfolio of 80% equities and 20% fixed income because they can't live on 1%. If you have a laddered portfolio going out 7 years, your yield would be about .51%. About 5 years ago I had an attorney instruct a trustee to talk with the beneficiaries, see if they wanted to include capital gains as income and if they ALL agreed (including the fiduciary / trustee), write a letter saying this was their new policy going forward and include it with trust documents. The key is that once you declare it, you can't decide to reverse it later. I have a trustee who refuses to do this because he knows it is counter to why the trust was generated in the first place. That trust has been operating since about 1940 and is still going and will until it hits 100 years of age. The trustee knows it was started to make sure the grantor's kids didn't blow the estate via divorce (and just blowing it). Now the great grandkids are getting checks every year.
  5. As far as I know Thervo doesn't push the remote option. I don't believe the "remote" workers are living in high end locations. They are living in low cost areas, targeting the entire country and if they can earn $45 for an hour of work they are in the top 10% of income in their county. Just looked it up , you can get a bookkeeper billing at $35 per hour and an EA doing individual returns for $100. Both are remote. $45 isn't realistic I'm guessing but $100 as your starting point is pretty darn low.
  6. I wish we had done it 6 years earlier. I was worried about cable down times but so far (knock on wood) we haven't had one.
  7. Interesting, so you are doing the remote work? How much is a normal going rate for remote work? Because I was specifically talking about the remote work. I've done Thumbtack for local clients. Thervo works the same way pretty much. You do realize I said it was a bunch of tire kickers and you said you get 1 in 15 people as clients? Is that similar to what you get when you meet with a potential client from a different source?
  8. Oddly, our robo call volume is WAY down lately. Knock on wood. We were getting 3 google listing calls per day. ATT would call daily. Since moving to VOIP it has dropped dramatically for some reason. 25 years ago we switched from Southwestern Bell (they made me mad) to Birch telecom (switched to VOIP last fall). We were getting 1-2 calls per day from Southwestern Bell (now ATT) to get us to switch back. That's probably over 5,000 calls from them. I told a guy one time from ATT and he claimed it wasn't possible until I mentioned we had 9 phone lines and said yeah, that's possible then.
  9. There is a web service out there called thumbtack - people will remotely do your taxes for a very small amount of money. No clue how well it works for people but it's pretty much just a bunch of tire kickers looking for the lowest bid possible. I've never asked for a bid so I don't know what others are charging but it seems like if you are working remotely, you could make some money that way on the side. The problem is you might be doing a 1040 for $45 - no clue. But hey, that's a lot more money that you'd make per hour as the Intuit call center guy.
  10. It would depend upon how the trust is written up. The IRS really only cares that the income is reported and someone is paying the proper amount of tax. A trust can distribute capital gains or keep them, depends upon the trust. A trust can spit out principal assets if the trustees are so inclined and it's allowed by the trust.
  11. This is the route I'd take. It doesn't matter that she's living off the money, many kids get money every year from their parents and essentially live off of it. I do the taxes of a few of them. (If the siblings have spouses you can give $30k per year easily)
  12. That sucks, I'm sorry. My mom is in the late stages of Parkinson's with dementia getting progressively worse. Death would be appealing at this point but she could last another 9 months.
  13. T Rowe Price doesn't have to think anything is weird about someone not taking a distribution since it is an accumulated figure and they could have been taking their distribution from another IRA at a different firm. You aren't required to take the RMD from each account. Their only requirement is giving you that RMD number each January. IMO you need to figure out the RMD from EACH account and compare it to what they took out. I have clients who might have an RMD of $21,230 per year and they'll take out $23,000 just to be sure. If that forgotten IRA was small enough, they might not have any problems at all.
  14. I've had multiple clients where this has happened on the state return. In fact it has happened to me. No clue why and never received an explanation why. This year on my local state I've had two clients call me up and tell me they received checks from the state with no information, no explanation. Two weeks later the state mailed them each a letter demanding the money back and it was sent in error.
  15. I agree, have been slowly acquiring information and have done only a few actual cases thus far. I think it's a lucrative area and I think it's going to explode but thus far what I've done isn't exactly enjoyable work. Several years ago I did the American Society of Tax Problem Solvers boot camp (dvds) - sadly that was limited to OICs but had decent information. Jassen Bowman and his Tax Resolution Training videos on Youtube (free) are rather informative. Locally we have several law firms that are advertising tax resolution work non-stop.
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