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Author: jpinksta Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: Negative income in 1998 Date: 4/16/2000 5:10 PM
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Two questions:

#1. In 1998 my income for federal taxes was $1053. I contributed $2000 into a traditional IRA. The person preparing my taxes put this as a deduction bringing my AGI to -$947. I converted the traditional IRA to a Roth IRA this year and am now paying taxes on a little over $6000 (three years contributions of $2000). It doesn't seem correct that I should have to pay taxes on the $947 that didn't act to set off any income in 1998. Someone mentioned that I might need to file Form 1045. This loss was not business related (if that matters). This is the first year I have prepared my own taxes and this nuance is driving me crazy. Would someone please help to put my brain at ease.

#2. Regarding estimated taxes. I have about $30000 in capital gains for the first quarter of 2000. However, my last year total tax liability was about $1231. Can I simply divide 1231 by 4 and send this amount each quarter as my estimate taxes and make up the difference on April 15, 2001? (Since the safe harbor rule states that if you pay 90% of last year's tax liability you do not get penalized) Better yet, can I wait and pay $1231 in the third or fourth quarter? (probably not but just checking)

Thank you
jpinksta
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