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Author: Saladin Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121585  
Subject: Tax Q&A 3/5/98 - Schedule D Date: 3/6/1998 2:24 PM
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Question on Tax Q&A for 3/5/98 -
The text recommends that you check your work by
comparing net capital gains in line 17 to the
total of lines 36, 40, 46, and 50. They should
be exactly the same amount.

Rather, shouldn't the total of lines 36, 40, 46,
and 50 equal line 19 (total taxable income) minus
$41,200 (for married filing jointly)? Or line
17 plus amount of income over $41,200?

I've reviewed my Schedule D over and over and
can't reconcile the totals of lines 36, 40, 46,
and 50 to line 17 as recommended.
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Author: Travzila Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2467 of 121585
Subject: Re: Tax Q&A 3/5/98 - Schedule D Date: 3/7/1998 10:55 AM
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<<<Question on Tax Q&A for 3/5/98 -
The text recommends that you check your work by
comparing net capital gains in line 17 to the
total of lines 36, 40, 46, and 50. They should
be exactly the same amount.

Rather, shouldn't the total of lines 36, 40, 46,
and 50 equal line 19 (total taxable income) minus
$41,200 (for married filing jointly)? Or line
17 plus amount of income over $41,200?

I've reviewed my Schedule D over and over and
can't reconcile the totals of lines 36, 40, 46,
and 50 to line 17 as recommended.>>>

I'm right there with you. I've reviewed, double-checked and re-analyized my Schedule D and cannot duplicate the suggested check method.

I agree with your check method that lines 36, 40, 46,
and 50 equal line 19 (total taxable income) minus
$41,200 (for married filing jointly) **with the figure not going below zero**. For me, Line 19 less $41,200 results in a negative number. Since lines 36, 40, 46, and 50 equal zero for me it certainly seems to be the proper method to checking one's figures.

If the author of the column, Roy Lewis, could offer a complete working example of Schedule D it would help to make this crystal clear. The verbiage helps to explain the tax forms, but being able to duplicate the verbiage with an example would help clarify even further. Travzila


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Author: Travzila Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2502 of 121585
Subject: Re: Tax Q&A 3/5/98 - Schedule D Date: 3/8/1998 6:09 PM
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I've done some more research on this am convinced the calculations for my Schedule D are correct. Why? Because my long-term capital gains all occurred at times that resulted in me using my ordinary income tax rates.

The capital gains tax rates table at http://www.1040.com/97capgns.htm is a handy reference that led to my conclusion, and one to which I shall refer to below.

I had LT gains that occurred before 05/06/97, and as I fell into the 15% income tax bracket, the table shows that 15% is the tax rate for these LT gains.

I also had LT gains that occurred after 07/28/97 that were held more than 12 months but less than 18 months. Again, the table shows that the 15% income tax bracket uses the same 15% rate for computing taxes on these LT gains as well.

Roy Lewis' (author of the column) check calculation is line 17 = lines 36, 40, 46, and 50. Well, line 36 is for calculating a 10% tax rate (not applicable for me), line 40 is for calculating the 20% rate (not applicable for me), line 46 is for calculating the 25% rate (again, n/a for me) and, lastly, line 50 is for calculating the 28% tax rate (one final n/a for me).

Therefore, Roy Lewis' insistence that net capital gains in line 17 equal the total of lines 36, 40, 46, and 50 as always being true isn't a certainty. If anyone believes my reasoning to be incorrect, I challenge you to prove it with real numbers similar to the circumstances described above.

Travzila

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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2509 of 121585
Subject: Re: Tax Q&A 3/5/98 - Schedule D Date: 3/9/1998 10:00 AM
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[[Rather, shouldn't the total of lines 36, 40, 46,
and 50 equal line 19 (total taxable income) minus
$41,200 (for married filing jointly)? Or line
17 plus amount of income over $41,200?

I've reviewed my Schedule D over and over and
can't reconcile the totals of lines 36, 40, 46,
and 50 to line 17 as recommended.]]

MY BAD!!!

I screwed up this section of the form, and what I thought was a "trueism" is not...as you are finding out. This was brought to my attention yesterday also, and I'm talking to the editing staff in an attempt to make the changes ASAP.

Depednding upon your situation, the totals COULD equal line 17. Or COULD equal line 16.

Sorry for the confusion...
TMF Taxes
Roy

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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2513 of 121585
Subject: Re: Tax Q&A 3/5/98 - Schedule D Date: 3/9/1998 10:21 AM
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[[f the author of the column, Roy Lewis, could offer a complete working example of Schedule D it
would help to make this crystal clear. The verbiage helps to explain the tax forms, but being able to
duplicate the verbiage with an example would help clarify even further. Travzila]]

The author of the column, Roy Lewis, simply screwed up on this section of the post. He must not have tested the form as much as he should have. It can't possibly be correct, and they should throw the guy off of the folders. I'm sure that he will correct the post as soon as he can. I'm also sure that he now knows that the total of those lines may, from time to time, equal line 17. They also may, from time to time, equal line 16. It just all depends on circumstances.

I don't know about you, but I'll never believe the guy again. And I hope he gets a REAL job instead of confusing all of us.

TMF Taxes
Roy

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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2522 of 121585
Subject: Re: Tax Q&A 3/5/98 - Schedule D Date: 3/9/1998 11:04 AM
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[[Therefore, Roy Lewis' insistence that net capital gains in line 17 equal the total of lines 36, 40, 46,
and 50 as always being true isn't a certainty. If anyone believes my reasoning to be incorrect, I
challenge you to prove it with real numbers similar to the circumstances described above.]]

Right you are. This Roy Lewis guy is a read dope. I'm sure that he'll apologize once he realizes that his post is incorrect...and cause more problems that it was really worth.

But thanks to nice folks like you, who took the time to check their numbers against the information, I'm sure that he'll see how stipid he really is, and will correct the information ASAP.

Again, I'm sure that he is really sorry to casue you all of these problems.
TMF Taxes
Roy

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Author: Travzila Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2528 of 121585
Subject: Re: Tax Q&A 3/5/98 - Schedule D Date: 3/9/1998 11:17 AM
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<<<But thanks to nice folks like you, who took the time to check their numbers against the information, I'm sure that he'll see how stipid he really is, and will correct the information ASAP.

Again, I'm sure that he is really sorry to casue you all of these problems.
TMF Taxes
Roy>>>

No problem here. After learning so much here at TMF, it's nice to be able to help out in some small way. Take it easy on that Roy character; he is a Fool, ya know!

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