7500 tax credit going away asap

[Taxman]

Even retired people should be able to realize enough capital gains to create $7500 in tax liability. If not, save your money and buy a gently used car. Tons of great deals on used EVs.

One of my clients had nearly $100k in long term capital gains and zero tax liability. His earned income was less than the married standard deduction and 3 exemptions, and that put him in the 0% bracket for LTCG.
(taxpayers in the 10% and 15% brackets pay 0% on LTCGs, it's been that way since about 2002)

[evboy]

Even retired people should be able to realize enough capital gains to create $7500 in tax liability. If not, save your money and buy a gently used car. Tons of great deals on used EVs.

One of my clients had nearly $100k in long term capital gains and zero tax liability. His earned income was less than the married standard deduction and 3 exemptions, and that put him in the 0% bracket for LTCG.
(taxpayers in the 10% and 15% brackets pay 0% on LTCGs, it's been that way since about 2002)

12,700 married SD
12k 3 exemptions
75k income at 0%
yep, right at 100k. sweet. I need to get married. NOT. did you tell your client about alimony and losing half his shit when he gets divorced.
sex with the same girl for the rest of your life. ill pass on all that.

[evboy]

taxman, I have a question. this year I made 35k in futures trading profits. I have 15k in carryover losses from last year. in 2018, should I claim the 3k max towards my income first and then deduct the 12k left in carryover losses towards my 35k profits OR claim the whole 15k towards my 35k profits. which way would I come out ahead since 40% of futures profits or taxed at the short term ordinary income rate.

[CCIE]

You guys have some good accountants. I’m not sure how $100k income, even married, yields less than $7500 in tax liability. Must have some serious tax deductions.

I do know that the lower tax brackets pay nothing on LTCG. But the gains themselves can push up the tax bracket by themselves. So, something should be owed on $100k. I’m too lazy to do the math since the IRS formula is not straightforward. But, I’m amazed that it would be 0.

[evboy]

You guys have some good accountants. I’m not sure how $100k income, even married, yields less than $7500 in tax liability. Must have some serious tax deductions.

I do know that the lower tax brackets pay nothing on LTCG. But the gains themselves can push up the tax bracket by themselves. So, something should be owed on $100k. I’m too lazy to do the math since the IRS formula is not straightforward. But, I’m amazed that it would be 0.

that 75k that I posted for married is 0 percent if its a capital gain. if its income from a job than it would be taxed at 10 and 15%. then u would have a 7500 tax liability. taxman said his client had 100k from capital gains which were probably from stocks. I'm single so its 10,500 for my standard deduction and personal exemption and 37,500 of LT capital gains income at zero percent.Thats 48k I can make trading stocks tax free if I hold for one year. In theory with trumps new 12k standard deduction for single and first 45k zero rate for capital gains, you could make 57k a year trading stocks, and as long as you held them for 1 year, pay zero in taxes and zero in social security, fica, medicare.... the whole nine yards. there is a reason why working for somebody else sucks. you get taxed to death.


I bought 1000 shares of Netflix in 2007 and like a idiot sold it 6 months later because of piracy. If I would have held those shares till today, I would have over a million dollars and could have sold 57k a year and pay no taxes for next 20 years.

[Taxman]

taxman, I have a question. this year I made 35k in futures trading profits. I have 15k in carryover losses from last year. in 2018, should I claim the 3k max towards my income first and then deduct the 12k left in carryover losses towards my 35k profits OR claim the whole 15k towards my 35k profits. which way would I come out ahead since 40% of futures profits or taxed at the short term ordinary income rate.

You never have both a gain on the front page of 1040 and a loss carryforward to next year.
Everything nets out before it hits page one of 1040.
Take a look at Schedule D.

1. compute short term and long term gain or loss for current year.
2. deduct short term and long term loss carryforward from this year's short and long term figures.
3. if step 2 results in both a gain and a loss, subtract the loss from the gain, if the result is a loss, subtract 3k on page one and carry the rest forward, if the result is a gain, report it on page one.

[evboy]

thanks. u think trumps plan will be retroactive to 1/1/17. if it passes of course.

[Taxman]

It wouldn't be the first time a tax bill for the year passed in November or December.
In 1993, there was a major change passed in December that was retro to January, and it greatly increased the tax liability on certain types of income.

It's unlikely that any credits will be revoked retroactively (like EV and solar energy property credits).

I always schedule my 2 day update class as late as possible, especially in a President's first year in office.
I'm going the 11th and 12th next month, I hope I don't get a bunch of changes in my email after that.

I just love it when they pass a tax bill on December 20 and the IRS says 'we will start working on implementing it in early January, we've got Christmas vacation plans'. Then you get into fun stuff like "we will not accept e-filing of returns with itemized deductions until February 14" (actually they ended up accepting Schedule A at the end of January, but still, it was ridiculous that they weren't accepting anything but very simple returns when e-file season opened that year)

[67goat]

.... 2010 to 2017 is long enough for a tax credit that large. ...

But 'tax credits' to the oil barons and a military presence to make that business flow smoothly around the world should just continue forever.
Oh, and the pollution we all share, and enjoy, is just part of doing that business.

what tax credits r u talking about. oil companies deduct their expenses like any other company. what special deductions do oil companies get that any other company doesn't. if they buy a oil rig that's a expense.
Oil is the greatest commodity ever discovered. its solely responsible for the economic boom of the last 80 years. its responsible for the car industry and all the jobs related to that directly and indirectly. its responsible for the federal highway system. its responsible for the airline industry and all the jobs associated with travel. u guys that complain about oil don't realize how much u have gained in wealth because of it. sure its dirty and newer technologies will eventually replace it but oil will always be the most important product ever.
look how basic life was before oil. we had more progress in the last 80 years after oil than we had for 5000 years before oil.

The oil industry does not deduct the way other businesses do. In addition to several credits that only apply to the oil industry (intangible drilling costs, depletion allowance, royalty relief from making payments for using federal land that any other industry using federal land would pay, etc...), and even more that could apply in theory to other industries but end up being used almost exclusively by the oil industry (dual capacity taxpayer), there are also special rules for how the oil industry is allowed to operate (immediate and/or rapid term deduction of costs rather than amortization over several years, aka percentage depletion), there are tax deductions that were meant for struggling industries that they got themselves included in, even though they were going gangbusters profits-wise (domestic manufacturing deduction), and other rules that disproportionately benefit the oil industry (LIFO).

So no, the oil industry does not deduct expenses like any other business.

As for the effect they had on the economy, that mainly happened because of the subsidies that they were given and allowed to keep for nearly a century (while competing industries lost their subsidies. Read up on the switch from whale oil and camphene to petroleum, the government, not the market picked petroleum.) It is a limited resource that is getting harder to find and extract. Alt energies have had much smaller subsidies for a much shorter time while their competitors (coal and gas) have kept theirs. Time to stop living in the past and move to the future.

[evboy]

everything you just said is the reason we need to scrap the whole tax system. as a libertarian we should have zero corporate and zero income tax. have a national sales tax or vat tax to pay for a very small government and a gas tax to pay for infrastructure spending. get rid of 90 percent of government and all its waste and you will c 4 to 5% gdp growth instead of the 2% Obama economy and probably 3% under trump until everything collapses from the 20 trillion in debt.