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ThoughtCouture 
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 Posted: Jan 03 2013 at 10:48am |
 Bribby wrote:
mzmee wrote:
If you can find the cost basis of the stock you may be okay. The amount to be taxed will not be on the $14,000 that was received but the difference between the cost of the stock and what it was sold for. Ask her if she had purchase statements from when she bought the stock. Ask about all statements that she received on a quarterly/monthly/bi-annual statements that were received as this may reflect additional purchases from automatic reinvestments(if that were the case).
The amount owed may be from them imposing a tax on the whole $14,000 but if the purchase statements can be found this can help reduce tax liability.
Good luck, do not procrastinate, and communicate with IRS/meet their deadline. If not when they assess and bang their gavel on what has to be paid, you're stuck with it.
Cost Basis: The original value of an asset for tax purposes
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And my mom is saying well what if it comes out for us to owe more? Could that happen?
And if we don't do that and just pay the $1700 could it all just go away?
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does the statement from the irs show how the $1,700 was calculated?
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Bribby
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Posted: Jan 03 2013 at 10:49am |
ThoughtCouture wrote:
oh wait. you filed a return yourself, right? |
Yes I did, with the W2 I received from work and I got back what taxes they took out, so they were saying like there was something wrong because I didn't document all of my income, but I didn't know about that money so that's why it wasn't included, they received info I had more income and then that's why they sent the notice.
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iSMILE13
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Posted: Jan 03 2013 at 10:49am |
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1. Tell your mama to stop claiming you. You are missing out on refundable tax credits
2. She needs to pay all not what you may owe....a red flag is already in the system. You don't want to be disallowed from credits in the future. A schedule d is pretty simple to complete.
3. VITA may be able to prepare it free of charge
4. If she can't afford to pay all of it at once, she will need to payment arrangement or something. Dint ignore it because that could cause penalties, interest, garnishing wages etc
Edited by iSMILE13 - Jan 03 2013 at 10:51am
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mzmee
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Posted: Jan 03 2013 at 10:51am |
Bribby wrote:
mzmee wrote:
If you can find the cost basis of the stock you may be okay. The amount to be taxed will not be on the $14,000 that was received but the difference between the cost of the stock and what it was sold for. Ask her if she had purchase statements from when she bought the stock. Ask about all statements that she received on a quarterly/monthly/bi-annual statements that were received as this may reflect additional purchases from automatic reinvestments(if that were the case).
The amount owed may be from them imposing a tax on the whole $14,000 but if the purchase statements can be found this can help reduce tax liability.
Good luck, do not procrastinate, and communicate with IRS/meet their deadline. If not when they assess and bang their gavel on what has to be paid, you're stuck with it.
Cost Basis: The original value of an asset for tax purposes
|
And my mom is saying well what if it comes out for us to owe more? Could that happen?
And if we don't do that and just pay the $1700 could it all just go away?
|
If it is paid, they will close the case and will "go away".
From what I understand about tax consequences on stock when they are held for longer than a year, this looks like the tax is based on the sell amount ($14,000) and it includes capital gains tax because the stock was held long term (greater than a year).
The amount of liability can be reduced if there is proof of purchases. Then what they do is subtract the purchase amount from the sell amount. They tax you on the difference.
So instead of having a $1700 liability on that $14,000. Lets say you have purchase statements that shows the total purchase price of $9000.
They will deduct that $9000 from the $14000 to come up with $5000 and you will only be taxed on that $5000 which will be a much smaller tax.
Edited by mzmee - Jan 03 2013 at 10:53am
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Bribby
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Posted: Jan 03 2013 at 10:55am |
ThoughtCouture wrote:
Bribby wrote:
mzmee wrote:
If you can find the cost basis of the stock you may be okay. The amount to be taxed will not be on the $14,000 that was received but the difference between the cost of the stock and what it was sold for. Ask her if she had purchase statements from when she bought the stock. Ask about all statements that she received on a quarterly/monthly/bi-annual statements that were received as this may reflect additional purchases from automatic reinvestments(if that were the case).
The amount owed may be from them imposing a tax on the whole $14,000 but if the purchase statements can be found this can help reduce tax liability.
Good luck, do not procrastinate, and communicate with IRS/meet their deadline. If not when they assess and bang their gavel on what has to be paid, you're stuck with it.
Cost Basis: The original value of an asset for tax purposes
|
And my mom is saying well what if it comes out for us to owe more? Could that happen?
And if we don't do that and just pay the $1700 could it all just go away?
|
does the statement from the irs show how the $1,700 was calculated? |
No it doesn't from what my mom is saying she keeps asking how they calculated but I don't know myself.
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SamoneLenior
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Posted: Jan 03 2013 at 10:55am |
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good info in this thread
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Bribby
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Posted: Jan 03 2013 at 10:56am |
iSMILE13 wrote:
1. Tell your mama to stop claiming you. You are missing out on refundable tax credits
2. She needs to pay all not what you may owe....a red flag is already in the system. You don't want to be disallowed from credits in the future. A schedule d is pretty simple to complete.
3. VITA may be able to prepare it free of charge
4. If she can't afford to pay all of it at once, she will need to payment arrangement or something. Dint ignore it because that could cause penalties, interest, garnishing wages etc |
What is tax credits? See the way things are is all messed up! Since I live with my parents they claim me on the taxes but they still never get any money and have to owe. SO I let my baby's dad claim the baby bc he gets alll of this money back . I want to get some money dang it! lol Not owe, i barely turned legal and i'm owing smh
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ThoughtCouture
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Posted: Jan 03 2013 at 10:57am |
Bribby wrote:
ThoughtCouture wrote:
oh wait. you filed a return yourself, right? |
Yes I did, with the W2 I received from work and I got back what taxes they took out, so they were saying like there was something wrong because I didn't document all of my income, but I didn't know about that money so that's why it wasn't included, they received info I had more income and then that's why they sent the notice.
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oh ok so this is assoicated with YOUR return. so yeah...like mzmee said, see if she still has the acct statement (with the stock purhase and sell...she may need to rerequest it) because there is a chance they are assessing tax on the full $14K when you only need to pay on the gain.
you can then calculate for yourself to see if the amount they say you owe is more than what you actually owe.
also, look at the statement form the irs to see if they assesed penalties and interest...
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ThoughtCouture
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Posted: Jan 03 2013 at 10:59am |
Bribby wrote:
No it doesn't from what my mom is saying she keeps asking how they calculated but I don't know myself.
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ok....request that from the irs...that is, how they calculated the $1,700. they should have sent you a statement detailing this anyway.
i have a feeling they did not take into account how much the stock was purchased for. which means they are trying to over charge you.
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Bribby
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Posted: Jan 03 2013 at 10:59am |
mzmee wrote:
Bribby wrote:
mzmee wrote:
If you can find the cost basis of the stock you may be okay. The amount to be taxed will not be on the $14,000 that was received but the difference between the cost of the stock and what it was sold for. Ask her if she had purchase statements from when she bought the stock. Ask about all statements that she received on a quarterly/monthly/bi-annual statements that were received as this may reflect additional purchases from automatic reinvestments(if that were the case).
The amount owed may be from them imposing a tax on the whole $14,000 but if the purchase statements can be found this can help reduce tax liability.
Good luck, do not procrastinate, and communicate with IRS/meet their deadline. If not when they assess and bang their gavel on what has to be paid, you're stuck with it.
Cost Basis: The original value of an asset for tax purposes
|
And my mom is saying well what if it comes out for us to owe more? Could that happen?
And if we don't do that and just pay the $1700 could it all just go away?
|
If it is paid, they will close the case and will "go away".
From what I understand about tax consequences on stock when they are held for longer than a year, this looks like the tax is based on the sell amount ($14,000) and it includes capital gains tax because the stock was held long term (greater than a year).
The amount of liability can be reduced if there is proof of purchases. Then what they do is subtract the purchase amount from the sell amount. They tax you on the difference.
So instead of having a $1700 liability on that $14,000. Lets say you have purchase statements that shows the total purchase price of $9000.
They will deduct that $9000 from the $14000 to come up with $5000 and you will only be taxed on that $5000 which will be a much smaller tax. |
Ohh ok I understand you now. So, how can I get this information? I just tell my mom to ask the institution she had the stocks at for proof of purchases to be sent to us?
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