Conference nyoss1::market_investing

Points on fed tax

Generally, if you paid points with a separate check from funds other than those
from the new mortgage holder (ie, check from your bank account), you can deduct
those points in the tax year in which you paid them.  This is/was an old rule
that was changed to -not- and then re-instated (last year, i believe).  Why
they go into such depth about the "separate funds" is beyond me.  At any rate,
the IRS publications (as in Read The Manual) are clear about this.

Dave

    re: .2
    
    >>Why they go into such depth about the "separate funds" is beyond me. 
    
    I think the rationale is that if you pay points completely in 
    the tax year you can deduct them.  If you roll closing costs into
    the mortgage you end up "deducting" points over the life of the loan
    since mortgage interest is deductable (at least for now).
    
    Dave

well, for me it was all part of the money i needed to close the loan.
i needed X amount for the down payment, then N amount for the closing
costs, including the points.  i rolling this all into 1 bank check and
signed it over.  i didn't actually write out a check for the points
specifically.  so, can i deduct 'em all this year?

also, are closing costs itemizable/deductable?

If you use the money from the bank (mortgage) to pay for both the house and the 
points, then you must spread the deduction over the life of the loan.

The rationale is that if you pay the points out of the mortgage funds, the 
points are really just a part of the financing of the house and not an 
additional expense incurred at the time of the loan.

If you know the quirk, it is easy to get around IF you were about to put down 
more than the minimum down payment for your new home.  Just put down the 
minimum and use the remaining cash (that you would have put down) to pay for 
the points.  Of course, if you were simply rolling over one house's proceeds 
into another or if you were putting the minimum down, you are stuck.

>signed it over.  i didn't actually write out a check for the points
>specifically.  so, can i deduct 'em all this year?
Deduct if you wish, but you may have difficulty in an audit since the IRS 
publications do state that you need to pay for the points out of separate 
funds.

>also, are closing costs itemizable/deductable?

Without seeming too brusque, you REALLY need to get the IRS schedule.  You 
already have missed out on one deduction (by not writing a separate check) and 
you may be missing out on more.

And don't forget to fill out the schedule <mumble something> to tell the IRS
you have bought a new house.  This is used to roll over your cost bases from
house to house.  It's all explained in the IRS publications. 

Dave

now that I am at home and have the paperwork in front of me, some additional
info: 

Pub 523 - Selling Your Home 
Pub 529 - Miscellaneous Deductions
Pub 550 - Investment Income and Expenses
Pub 936 - Home Mortgage Interest Deduction
Form 2119 - Sale of Your Home  *Note: this must be filed if you sold in 1994, 
	    should be filled out (for record keeping) if you just bought.

Also, for those of us who diligently maintain Lotus/Excel/QuattroPro/etc
spreadsheets for the fed forms......yup, they changed them again.  Just when we
figure out the complicated forms, they "make them simple", again; job
perpetuation, or something like that. 


Dave

re                        <<< Note 816.5 by REDZIN::COX >>>

>If you use the money from the bank (mortgage) to pay for both the house and the 
>points, then you must spread the deduction over the life of the loan.
>
>The rationale is that if you pay the points out of the mortgage funds, the 
>points are really just a part of the financing of the house and not an 
>additional expense incurred at the time of the loan.



actually, i think i'm ok to deduct all the points.  i read the sched. A
in the 1040 manual, which i should have brought in here today, and it seems
as if i'm ok.  we put down 27% on the new house.  so, i had to bring a
check from _my_ funds to cover the 27% down payment + closing costs (incl. 
points).  i'll type in the instructions from the 1040 manual.  seems like
i'm clear to deduct, from what i read.

> Also, for those of us who diligently maintain Lotus/Excel/QuattroPro/etc
> spreadsheets for the fed forms......

	Speaking of which, does anyone have the templates for Excel?

    I have a question of short term capital gain (loss).  Can you take a
    loss even if you don't have a gain to report.
    
    Example:  I bought stock in December 1993 at $60.00 - I sold some of
    those stock in April 1994 at $49.00.  I have a total loss of $1504.00.
    
    I can't figure out if I can use this loss?
    
    Thanks for any help.
    
    Gail

    
    Yes, you can take a $3000 loss agains ordinary income.
    
    /Peter

    Maybe I'm just not getting it - but when I did the Capital Gains Form
    (forgot the name of the specific form) - it's said to put #19 which is
    the last amount on the form on line 13 of form 1040.  Do I put a <1500>
    and how do I deduct it.

    Assuming your line numbers are corect, yes you put (1504) on line 13 of
    your 1040 (re how do I deduct it: simple arithmetic - do you have a
    calculator that does subtraction? :^)

    Yes I have a calculator ;) - it's just that at the bottom of Form 1040 it 
    wants you to total all of your "income" - so as I'm going down the list
    do I just subtract that negative amount (since there is nothing that
    mentions a subtraction anywhere).
    
    Do I sound confused or what?
    
    Thanks for your patience and help.
    
    Gail 

    Never mind - don't reply, I just got it!!
    
    Thanks

Bunch of questions.  quick background.  we bought a house last year as a
tax hedge.  to come up w/ the downpayment, i sold all sorts of mutual
funds running the gambit from stock, taxable bond, TF bond, and also some
stock options, and stock.

sched d:
--------

1. where does one put the MF sales?  long-term or short-term?  i'd guess
short-term if i had it less than 1 yr, otherwise long term...

2. what does one put for the date acquired?  in the case of the bond funds
i had since '91, i had dividends reinvested monthly.  so, i bought shares
at many times.  i'm still waiting for PUB 564 (?) - mutual funds.

3. tax free MFs... cost basis.  i had TF MFs from '91 until 1/94.  i sold
them at a nice gain when compared to my purchase price.  i had dividends
reinvested... all dividends are MASS and FED TAX free.  so, here's what it
looked like (numbers are not actual), in brief:

	initial investment (6/91)	$10000.00   650.00 shares
	dividend (7/91)			    51.00     2.11 shares
	dividend (8/91)			    56.00     2.32 shares
	dividend (9/91)			    59.00     2.33 shares
	[etc]
	dividend (12/93)		    51.00     1.92 shares
	
	total............               $12789.00   710.00 shares

i hope the gain here is not 12789-10000 !!  all the dividend were
tax free.  in this case, how do i calculate the gain/loss?
also, in another TF fund i had, i made a subsequent investment by
check... how does that compute in?  



average cost method
-------------------

i assume this is how avg cost is computed.  is this right?

say, i have a total of 30 shares of XYZ, bought at these prices:

	10 @ $12, 33% of the shares; .33 * 12 = 3.96
	10 @ $8,  33% of the shares; .33 * 8 =  2.64
	5 @ 9, 16.7% of shares; .167 * 9 =      1.50
    	5 @ 14, 16.7% of shares; .167 * 14 =    2.34
                                             ---------
                     average cost =            10.44





thanks all.

	"I hate taxes"

		Robert Cray, 1040 Blues

    I'll answer a few of your questions.
    
    1. Your mutual fund sales are probably both long term and short term.
    Any purchases, including dividends that purchased shares, within 1 year
    are short term, everything else is long term.
    
    2. Since shares were purchased at different times, write "various" in
    the "aquired date" column.
    
    Ray

    
    For MASS taxes ... what form do I need to report DIVIDEND income and
    Capital gains/losses ?  
    
    For FEDERAL taxes ... what form do I need to report DIVIDEND income and
    Capital gains/losses ?
    
    Do the forms needed for above come with the forms that come in
    mail or do I need to visit the post office for them ?
    
    Thanks!
    

    re .15
    
    1. Cost of mutual fund shares for you.
    
          To original 10,000 you have to add in the cost to repurchase
    additional shares (from dividends). So if the value of the fund was
    x on the day the dividend was paid, and you bought 2.11 shares, you
    add 2.11*x into the cost basis for all shares. 
    
    2. I'm not sure about this, but I vaguely remember reading something
       about most mutual fund trades as being treated as long term.
       Ah, me thinks that applies to all additional shares purchased via
       reinvested dividends -- 
          ? irrespective of how near to the sale date the dividend was
            paid ??
    
      Can someone clarify this please ?
    

    re: .17
    
    For FEDERAL taxes:
    
    Dividend income - Schedule B if over $400, otherwise use 1040
    
    Capital gain or loss - Schedule D
    
    
    
    For MASS taxes:
    
    Capital gain or loss - attach Schedule D pages from Federal
    
    
    I'm not sure about MASS Dividend income...
    
    
    
    /Piotr
    

    
    re: 15
    
    	Tax Free must be calculated by both income and CAPITAL GAIN
    distributions. These can be found in your 1099-B which were sent
    to you by the fund each year. You must pay tax on the Capital gains.
    
    	As for the stock, best bet is to use the LIFO method of computing
    gains.
    
    	It is not quite as complicated as it looks once you have the info
    in front of you, although the calculator is going to get a good
    workout. ;*)
    
    		the Greyhawk

    
    
    I heard that TurboTax was being offered free from an internet site.
    Apparently, there was a bug in a version sold in stores; the corrected
    version was placed for free access to all...
    
    Anyone have more info on this? An ftp site?
    
    Thanks,
    
    Kaizad

>    I heard that TurboTax was being offered free from an internet site.
>    Apparently, there was a bug in a version sold in stores; the corrected
>    version was placed for free access to all...

Really?  The product for free?  Or is it just the updated fixes on the net for
free?

Dan

    It's probably a free copy, made available as part of damage control.  I
    heard that the president of the company publically apologized for the
    mistake.  I would appreciate someone posting the site.  (Hint, hint.)
    
    Mark

    Sure, TurboTax and MacInTax are available free on the Internet; but why
    try to take money from such a good company when they are down?  After
    all, they are not Microsoft (yet), the company everyone finds a reason
    to dislike (and therefore OK to copy their s/w in violation of the
    license).
    
    Morality aside, I think you'll find it worth your while to plunk down
    the $25 price ($30 less $5 rebate) and get the manual.  When you want
    to do an override or a transfer, the manual provides some valuable
    guidance and reassurance.
    
    The other advantage of being honest and buying the product is that
    Intuit is very good at following up with registered users.  Not only
    did I get a mailing with an extensive explanation of the failure modes
    of the original Federal tax program (more detailed than reported in the
    popular press), my corrected disks and short-installation instructions
    arrived soon after by Federal Express.
    
    By the way, there's a problem with the MA tax package too.  Today I
    received a mailing of the problem and its workaround.  Simple fix, but
    Intuit is going to mail me replacement disks as well.
    
    With this kind of customer attention, I don't begrudge them their
    fistful of dollars.  

    Wasn't Intuit recently bought out by Microsoft?
    
    -TB

    The deal is "pending", as they say.  Judge Sporkin's refusal to accept
    the Justice Dept.'s settlement with Microsoft on monopolisitic practices
    has kept Intuit a waiting bride.

On Oct 14 1994, I sold X shares of DEC short at $28.63 and paid a commission
of $37 (this was thru an outside broker).

On Dec 8, I got the stock certificate for X shares from IS and closed my
short position.

The X shares were bought in two previous ESPP periods as follows:

Y shares allotted on Nov 30 1994 (FMV start=21.38; FMV end=34.44;
                                  purchase price=18.25)

X-Y shares allotted on May 28 1993 (FMV start=32.68; FMV end=44.50;
                                    purchase price=28.00)

Note: I sold the shares allocated for 12/1/93-05/31/94 immediately thru
IS and the gain is reported in the W2.

The IRS rules on short-sales are terribly complex, appreciate your
help in applying them to this case.

Thanks

Ram

(cross-posted in DIGITAL_INVESTING)

        Quite to my surprise (since I was expecting quite the
        opposite), I found last night when I did my return that I
        have a significant refund coming (US Federal).

        I was wondering whether it is worth finding a preparer that
        can file it for me electronically, in order to get a quicker
        return.

        Some questions I have:

        - how much quicker?

        - how much does a provider charge for electronic filing?

        - any other drawbacks/negatives?

        given that I would be doing it this week (just before the
        filing deadline).

        Bob

> (cross-posted in DIGITAL_INVESTING)

	Tsk tsk

Re: .28

	Note that this year some IRS offices are offering FREE electronic
	filing (including the one in Nashua I believe).  However there
	are some restrictions, the biggy I belive that your gross adjusted
	income be less than $30k :-(

jeff-who-is-filing-a-1040,schA,B,D,E,and-forms-1116,4562&8606-not-to-mention-
the-original-1099INT-with-the-1096-cover-letter-mailed-in-seperately(in a
flat envelope since the IRS says not to fold it)-:-((((

I need advice as to how to deduct my 3% sales charge (load) on a Fidelity
Mutual fund which I redeemed (actually transferred to another one) last year.
Fidelity did not include this in my investment summary report. They opine
that it cannot be included in a profit and loss statement and advised me 
to consult a tax expert for an appropriate place. I was under the impression
that the load must be included in the cost basis.

Also, can I include all the reinvested dividend and ST capital gains (which 
has already been taxed in previous years) as part of cost basis?

Thanks for any help

-- Virendra

re    <<< Note 816.31 by AWECIM::VERMA "Virendra, HLO2-1/A7, DTN 225-6518" >>>
                             -< Mutual fund load >-

>I need advice as to how to deduct my 3% sales charge (load) on a Fidelity
>Mutual fund which I redeemed (actually transferred to another one) last year.
>Fidelity did not include this in my investment summary report. They opine
>that it cannot be included in a profit and loss statement and advised me 
>to consult a tax expert for an appropriate place. I was under the impression
>that the load must be included in the cost basis.
>


3% sales charge _does_ get folded into your cost-basis, i reckon, very
similar to a commision when you buy stock.

ok, you sent fido $10000 on a 3% load mf.  your investment in the mf was
$9700, but your cost basis is $10000.


>Also, can I include all the reinvested dividend and ST capital gains (which 
>has already been taxed in previous years) as part of cost basis?

yes because you've already paid taxes on the money.  this get all folded
into your cost-basis:

1/1/95	investment by check	10000
6/1/95	dividend		 1000
12/1/95	st gain			 1500
				-----
				12500 is your cost-basis

ok, i finially knuckled under and had my taxes done.  i had one dispute
w/ the tax mon over where to put DEC stock.

i argued that DEC stock, via ESPP, must _ALWAYS_ be declared on sched
D regardless of when you sell, and what you sell it for (gain/loss).
he said i did not need to report on sched D because the 15% is added
to my W2...  every year this screws up more people.  i don't
know why IS doesn't publish a simple guideline telling people what to
do.

re        <<< Note 816.30 by NETRIX::michaud "Jeff Michaud, That Group" >>>

>jeff-who-is-filing-a-1040,schA,B,D,E,and-forms-1116,4562&8606-not-to-mention-
>the-original-1099INT-with-the-1096-cover-letter-mailed-in-seperately(in a
>flat envelope since the IRS says not to fold it)-:-((((


what are forms 1116, 4562, 8606, sched E used for?

> what are forms 1116, 4562, 8606, sched E used for?

1116	Foreign Tax Credit
4562	Depreciation and Amortization
8606	Nondeductible IRAs (Contributions, Distributions, and Basis)
E	Supplemental Income and Loss (from rental real estate, royalties, etc)

re Note 816.33 by ZENDIA::FERGUSON:

> he said i did not need to report on sched D because the 15% is added
> to my W2...  every year this screws up more people.  

        If you sell immediately and *don't* fill out schedule D, then
        most probably you have overpaid your taxes because immediate
        sales typically bring in less than then ending stock value
        used to compute the 15% added amount, which gives you a
        capital loss that reduces your taxable income.

        It is highly unlikely that you sold it for exactly the
        original price (as reflected in the added amount). 
        Therefore if you haven't overpaid (because you failed to
        report a loss) then you failed to report an additional gain
        (and failed pay tax on it).

> i don't
> know why IS doesn't publish a simple guideline telling people what to
> do.

        They seem to be afraid of giving advice that might not always
        apply.

        Bob

Re .33

You're right; your tax mon isn't.

Even if you come out absolutely even, you *still* want to report your
DEC stock sale on schedule D.

The IRS goes looking for people who report fewer capital gains transactions
than those reported on the taxpayer's 1099 forms.

Besides, it almost never happens that the buy price plus 15% exactly equals
the sale price -- there'll be some sort of capital gain or loss to declare.
Did yours *really* turn out to be equal?

-- Andrew

re .33:

and only Sched D lets you deduct the cost of the sale (commission + SEC tax).

re Note 816.38 by RANGER::CLARK:

> and only Sched D lets you deduct the cost of the sale (commission + SEC tax).
  
        Is the SEC tax deductible as part of the cost?

        (The Schedule D instructions would lead one to believe that
        only state and local taxes are included in the cost, and the
        SEC tax is federal, right?)

        Bob

> Is the SEC tax deductible as part of the cost?

	Yes.  When my broker sends me confirmations for sold shares
	the "net amount" (the figure used on Sch. D) has both the
	commisionand SEC. FEE subtracted from the gross (num. shares
	times price per share) amount.

	The SEC tax seems so small to really matter however.  For
	example, I sold 2,000 shares last friday of a stock at a
	price of 6 1/2.  The SEC. FEE was 22 cents.

	BTW, what is the SEC. FEE anyways?  I just noticed on another
	stock I sold last Friday there was no SEC. FEE.  Maybe because
	it's a stock I sold before the settlement date of when I bought
	it?

re                      <<< Note 816.37 by VSSCAD::SIGEL >>>
                     -< Sell DEC stock -> file schedule D >-

>Did yours *really* turn out to be equal?

nope, a slight loss.  that's why i argued with the tax mon that it
should be in there.  he ketp arguing this other stuff that was confusing.
i don't think he understands the ESPP very well, even though i explained
it and many other companies have similar programs.

    > I was wondering whether it is worth finding a preparer that
    > can file it for me electronically, in order to get a quicker
    > return.
    
    FYI, I heard on Nat'l Public Radio that electronically filed returns
    are taking consistently longer to be processed this year than last.
    IRS is apparently considering each return more closely to rule out
    certain types of misuse and fraud. So your refund might not come back
    that much quicker.
    			Jim
    

re Note 816.42 by MARVA1::BUCHMAN:

>     FYI, I heard on Nat'l Public Radio that electronically filed returns
>     are taking consistently longer to be processed this year than last.
>     IRS is apparently considering each return more closely to rule out
>     certain types of misuse and fraud. So your refund might not come back
>     that much quicker.
  
        I guess I must be in one of the "safe" categories.

        Mine was electronically filed on April 12, and my checking
        account was credited with the refund on April 21.

        Bob

    I have a question about the Simplified Employee Pension (SEP-IRA).

    Can anyone who has self employed income open a SEP-IRA?  Or is it
    limited to people that _only_ have self employed income?

    For example, my wife works as a freelance editor for several companies
    that pay her as a contractor (ie. they don't pay her Social Security,
    don't withhold any taxes, and report her income on Form 1099R).  She
    also works for another company that contracts her from a temporary
    agency as a 'regular' employee (ie. they pay half her Social Security,
    withhold taxes, and report her income on Form W2).

    Is she eligible to open a SEP-IRA based on her self employed income?

    Now, what if one of the companies she worked for also offered a 401(k)?
    Does that change the answer?

    thanks,
    -dave

    My wife was in exactly the same circumstances in 1994.  She opened a
    SEP-IRA; and so far, no one has complained.

Tax planning time.

I have an est. $681 in long term gains and and est. of $930 in short term gains
from mutual funds for this year (also, about $1300 in div. income).

i sold 82 shares of DEC back in Jan.
these were ESPP shares.
should i maximise my loss with this DEC share sale?  i do have
plenty of shares that i bought in the at a high price ($90/sh),
but i do have some that i bought at a lower price.  also, since
congress is thinking of a 2 for 1 split on loss claims for next year,
i'm thinking to maximise the loss this yr.  i'll offset the $681 l.t. gain
on the MF's and max. the loss on the  DEC shares.

also, for short-term, is the period less than 1 year?
i'm planning to offset the short-term MF gain by selling a loser
i have.

thanks
jc

> i sold 82 shares of DEC back in Jan.
> these were ESPP shares.
> should i maximise my loss with this DEC share sale?  i do have
> plenty of shares that i bought in the at a high price ($90/sh),
> but i do have some that i bought at a lower price.  also, since
> congress is thinking of a 2 for 1 split on loss claims for next year,
> i'm thinking to maximise the loss this yr.  i'll offset the $681 l.t. gain
> on the MF's and max. the loss on the  DEC shares.

Oops, you (maybe) lose. Unless you're contemplating a second DEC sale (I'm 
not absolutely sure from your note, but it didn't sound like this was your 
plan)...

The DEC shares were sold in January. Period. Gain/loss on that sale was 
determined in January. You can't go in now and decide *which* shares were 
sold. If you didn't specify the shares sold, then (I think) your oldest 
shares were probably sold. You should have received at least one statement 
of ownership since then. Check one of those (or request a new one) to 
determine the shares actually sold.

    re: .46
    
    I would take the maximum loss I can take this year, since it is
    expected that we'll see a capital gain tax cut next year. 
    
    re: .47
    
    I don't think (not confirmed) that IS cares whick lot of stocks you are
    selling. All they care is that they are selling the right number of
    shares you've asked them to. It is not until you're filing your tax
    return time, you have to determine which lot of stocks you had sold. 
    You have to track which lot of stocks you have sold and which lot you
    are still holding, and their corresponding purchase prices.
    
    Mike

    Somewhere I read where the IRS DOES expect documented proof detailing
    exactly which buy dates that shares are sold where a broker is holding
    a multi period position.  I then asked my broker about that and he had
    to ask around, apparently this is not automatic practice.  After some
    asking around he seemed to think such documentation is doable but not
    normally done.
    
    It sounds like its between you and the IRS.  If you had a buy period in
    mind for the block sold then show that on the (D)statement.  You might
    then ask for a document from the broker stating that that was the buy
    period you indicated to have for your records (conveniently dated to
    conform to the date sold).
    
    It was either the Glove or USA today that stated this obscure
    regulation was now going to be scrutinized by the IRS - probably for
    the big sales.

    In the case of ESPP stock, if it happens that you sold exactly the same
    number of shares that you purchased for a particular buy period, and if
    that # shares happens to be unique across your later buys under ESPP,
    then I think you'll have no trouble claiming that the lot is the one
    with the same # shares purchased. 
    
    Also, if you sold a number of shares that definitely does not match
    any particular buy period, you can try to claim that you sold n from
    one purchase, and the rest-n from another purchase. But that's a lot
    more tenuous. 
    
    I believe the IRS ruling today is you are supposed to "mark" your order
    to say which lot it is taken against. Full serve brokers will have your
    transaction slip marked. Alternatively you can send them a letter, but
    the letter is supposed to be dated by (or real close, maybe) to time of
    the sale.  
    
    As a practical matter, if you didn't trade a lot of DEC stock this
    year, you can probably take it against whatever you want and not have
    it questioned. But it might get questioned in a future year, based on
    that year's transactions. (I'd try to create a paper trail the way you 
    intended for it to be transacted.) 
    
  

piece of info is missing here.

I  xfr'd my certificates to my discount broker.
they have no idea what i bought them for, but alas, i do, and i must
let digital know.

so, i think i can pick and choose the ones i sold, right?  just
as long as i do not sell those ones again in the future.

jc

    re: .51
    
> so, i think i can pick and choose the ones i sold, right?  just
> as long as i do not sell those ones again in the future.
    
    You risk being unable to defend your position in an audit.
    
    To avoid using FIFO, Pub. 550 says "adequate identification" requires:
    
    1)Telling the broker which shares to sell _at the time of sale_, AND
    
    2)Written confirmation of this from your broker.
    
    Practically speaking, the IRS can't detect from 1099's whether anyone
    complies with this, so you only really "need" the confirmation(s) if
    you're asked to defend your Schedule D in an audit.
    
    If this is the most aggressive thing you're planning on doing, I
    wouldn't sweat it. The IRS has much bigger fish to fry.

    >     If this is the most aggressive thing you're planning on doing, I
    > wouldn't sweat it. The IRS has much bigger fish to fry.
    
    Also, they have discontinued (for this year, at least) audits on
    randomly selected returns; cutting down on expenses, you know. They
    still audit some returns, but only when they have a specific reason to
    want ot look closer. The head of the IRS tried to keep funding for the
    random audits, saying it it needed to help spot new methods of tax
    evasion, but that argument apparently didn't work.
    				Jim

> Also, they have discontinued (for this year, at least) audits on
> randomly selected returns; ....

	From what I heard all they discontinued was the random "full blown"
	audit (the lengthly ones where they check everything, including
	every receipt, etc ....).  This seem to imply other random audits
	(the non-full blown variety) are still possible?

I thought regular audits were done for cause, and that the
full-blown (Taxpayer Compliance) audits were the only random
ones. 

> I thought regular audits were done for cause, and that the
> full-blown (Taxpayer Compliance) audits were the only random ones. 

	Things could of changed, but I remember even just a couple
	of years ago people used to think that they could avoid a
	random audit by not using the pre-printed label.

	In any case, I'm not brave enough to call the IRS to find out ....

    I filed my  Federal Taxes over the phone a little more than
    three weeks ago, however, I have yet to see my refund.  I've called
    the two numbers listed on page 27 of the telefile book.  One phone
    does not ever answer, the other (800-829-4477) tells me there is
    a problem with the phone.  Anyone else late getting their refund
    after 21 days?  
    
    deb

    Hi,
    
    I sold "short against the box" last December and closed the position
    last week.  My 1099B from the broker shows "proceeds" of my short sell.
    I had the understanding that I did not have to report to the IRS until
    the tax year that I closed the position.
    
    Was my assumption incorrect? What do I tell Uncle Sam?
    
    Thanks!
    Dan

    Just attach a little note on or with Form D (like the directions say)
    if your 1099B differs.
    
    And if the company you shorted goes completely under (i.e. stock price
    goes to 0), you never close out the position and never owe taxes...
    one of the cuter ways to screw Uncle Sam!  Kratz   

    Does anyone have a URL for a site from which you can download
    1995 MASS State Tax forms ?

Not directly, but it's somewhere under http://www.magnet.state.ma.us under
Department of Revenue.

    Remember that once you download them, you can't actually file them.  They
    are for reference purposes only.  You still need to find the actual
    printed forms at a library or post office, etc.
    
    							John

> Not directly, but it's somewhere under http://www.magnet.state.ma.us under
> Department of Revenue.

	My non-resident 1995 instructions/forms lists the DOR as:

		http://www.magnet.state.ma.us/dor/dorpg.htm

	They are only in Acrobat format however .....

       I was just about to mail out my Mass state taxes when .62 made me
       stop to ask:
    
            Can I directly file the Turbo State Tax forms created
            for me after doing my federal on TT?
              (not the actual booklet forms)
    

Re -.1 

Yes

>>            Can I directly file the Turbo State Tax forms created
>>            for me after doing my federal on TT?
>>              (not the actual booklet forms)

Yes.  I had the same question myself; it took some digging, but I eventually
found the reference.  The DOR lists a number of vendors of computer-generated
forms that are acceptable for submission, and Intuit is on the list.  I
submitted mine in February and got my refund, so I guess it must have been OK.

						Brian

    Thanks .2 et al for the suggestions.
    
    re: Filing official forms vs. xerox copy:
    
        I think thats for the main package only; that is, the ones that
    have the new look for electronic scanning.  But the various additional
    forms you may need, e.g. M-2210 is an "old-style" one, and I would
    assume that any copy of them is acceptable.
    
    Jerry
    
    PS: Soutboro MA library has reference copies of supposedly all forms
        that can be xeroxed. THey aren't open every night, but some until
    9 PM.

    For years, I and my wife have been getting 1099-INT from John Hancock
    Ins. and Metropolitan Inc.  Is there a reason why these are reported
    as interest and not dividends, e.g. on a 1099-DIV.  If they were
    reported as dividends, I could argue that they are merely a return of
    premium and therefore are not taxable until they exceed premiums paid. 
    The $'s at issue are small, $10-$15 additional taxes each year, but
    it's the principle of the thing; the Gov't get's enough of my money.
    
    Thx for any feedback.

Re .68

If your insurance accumulates cash value, the 1099-INT may well be on
interest paid on, and therefore added to, the cash value.  You may
want to check your insurance statement -- my guess is that you'll see 
one amount for dividends (considered return of premium), and another
for interest (paid on accumulated cash value).

What kind of insurance is this?  I've never received a 1099 from an insurance
company.

Whole life or universal life policies provide investment returns. 
Term life doesn't, it's just insurance.

Wes

I have a small whole life policy, and I don't get a 1099.

    	You may be thinking this is a bit late, and in a way it is, but
    	when you live outside the States, you have until the 17th of June
    	to file. :-)
    
    	If this question has been answered some where else in this notesfile, 
    	then I apologize and please point me to it.
    
    	I bought a block of shares in company X in November of 1993.  I 
    	then bought a block of shares in company Y in December of 1994.
    	In May of 1995 company Y merged with (bought out by ) company X 
    	and company's Y's shares become company X's shares (I don't have 
    	the exact percentage with me right now, but something like for 
    	every share of company Y, I got .43 shares of company X).  In 
    	July of 1995 I sold all the shares.
    
    	I held company Y's shares for less then a year, yet, when I sold
    	them they were company X's shares; still less then a year.
    
    	To do my long term and short term profits, do I take my total
    	number of shares I sold minus the new shares from the merge to be
    	the shares I'll use for my long term profit the the new
    	shares I got in May of 1995 for my short term profit?
    
    	Company X == Silicon Graphics
    	Company Y == Wavefront Tech.
    

I think it depends on how the stock transfer happened 
in May of 1995.  Generally you get new shares and there's 
no taxable event at that point - it is not treated as a 
sale and purchase.  In that case the May 1995 date is
irrelevant - you determine short vs. long from your
actual purchase date.

However,  if the transfer was treated as a sale and
purchase in May which sometimes happens - then you
will have to declare a gain/loss then - and then
another one when you sold in July.

I'm not an expert on this so you should get
confirmation elsewhere but I know of 
someone who was in this situation recently
and it was handled in the second manner
described above.

You need to check with your brokerage firm (or any brokerage firm,
really).  They should have summaries of all sorts of transactions --
stock mergers, stock swaps, redemptions, everything -- with information
on how the tax treatment was handled.

There are no hard and fast rules -- it all depends on how the merger/buyout
was structured.  One possibility is that the merger was not a taxable
event, in which case you have a long term gain on the Nov. 1993 block,
and a short term gain on the Dec. 1994 block.  Another possibility is
that the merger was a taxable event.  In that case, you need to get
the calculated value of the new company's stock on the day of the merger
(usually fair market value -- the average of high and low prices for the day),
take your long term gain on the '93 stock and short term gain on the '94 stock
as of that day, and then take the new basis (FMV * new shares) and calculate
your short term gain or loss on the new shares between May and July.

You can't pick a scenario -- you have to find out what the rules are for
that particular transaction and go with it.  Good luck in finding out by
Monday.  Perhaps there's a web page -- SEC or IRS, perhaps, or maybe one
of the more web-aware brokerages, or (better still) Silicon Graphics if they
have an Investor Relations page -- which would have the information you need.

-- Andrew

PS:  Thanks for asking the question -- you remind me that estimated quarterly
taxes are due on Monday, June 17.

    RE: .74 and .75
    
    Thanks for responding.  I'll check out SGI's homepage.  BTW it was a 
    merger.