Comments for Tax Blawg

Comment on How Long Does The IRS Have To Audit Your Return? by phenixdragon9

phenixdragon9 — Tue, 31 Jan 2012 15:32:31 +0000

Yes, it is considered income plus the 10% penalty if you took it out early.

Comment on The Romneys’ Tax Returns: Have FBARs Been Filed, Or Is Romney An OVDI “Candidate”? by Terry L. Jones, CPA

Terry L. Jones, CPA — Fri, 27 Jan 2012 15:59:26 +0000

Mitt and Ann Romney should release their FBAR reports for recent years when they held foreign investments. FBARs are filed separately for each spouse in many cases. If they are not in full compliance with all reporting obligations on foreign accounts, including PFICs, then they should be subject to the same penalties and amnesty programs that are being offered to others.

To the extent PFICs were involved, I wonder if they were properly reported on the income tax returns. PFICs have very onerous reporting requirements and costly tax rates applied in the absence of certain timely filed elections, particularly in the year of disposition.

Comment on If MF Global Lost My Money, Do I At Least Get A Tax Deduction? by Amrish

Amrish — Wed, 25 Jan 2012 16:04:57 +0000

Thank you for some great information and perspective.

Comment on Fox Business Interview: OVDI, FBARs, And The Economic Benefits Of A Repatriation Holiday by The Romneys’ Tax Returns: Have FBARs Been Filed, Or Should They Head For OVDI? « Tax Blawg

Wed, 25 Jan 2012 15:51:16 +0000

[...] the Romneys filed foreign bank account reports (“FBARs”), which have been the subject of much media attention in recent weeks? The answer might not be as straightforward as it would initially [...]

Comment on The Tax Story Behind The Big Story: The Taxation Of Carried Interests In ‘Buyout Profits Keep Flowing To Romney’ by Reid

Reid — Tue, 24 Jan 2012 21:42:02 +0000

To put it simply, the writers argument is garbage. The partners are not in a ‘sweet spot’ because they are treated like everyone else, they are in a sweet spot because they are not.

Simply, most partners in a partnership contribute the startup capital for their partnerships. The private equity partners are simply employees during their jobs. Their compensation is considered ‘capital gains’ instead of wages. A true partner in a passive investment can deduct his initial investment and claim capital gains on the increase in value when the investment is sold.

Clearly, Bain Capital is not a passive investment for a managing partner.

The idea that hedge fund investments would go down if they adjusted this crazy law is ridiculous. Why anybody invests in a hedge fund that charges a 2% fee and then skims 30% off the investor’s portion of the gain is beyond me.

It just shows that the wealthy are more willing to be fleeced than the average investor.

Thanks for the article. It shows the ‘heads I win’ (a 2% management fee) ‘tails you lose’ ( 30 % skim off your gain, with an additional tax benefit) allocated to the managing partners.

Ah, what a wonderful world for those who write the rules.

Comment on It’s April 29th; Do You Know Where Your Euros Are? by Silence Is Golden: Can Treasury Offer Guidance About The Tax Consequences Of A Euro Breakup? « Tax Blawg

Mon, 23 Jan 2012 15:44:18 +0000

[...] the tax consequences of a potential breakup of the euro. For our prior coverage, see here and here. As the currency lurches towards and away from a potential dissolution (in part or in whole), the [...]

Comment on Businesses Prepare For The End Of The Euro; Will Treasury Do The Same? by Silence Is Golden: Can Treasury Offer Guidance About The Tax Consequences Of A Euro Breakup? « Tax Blawg

Mon, 23 Jan 2012 15:44:15 +0000

[...] two years: the tax consequences of a potential breakup of the euro. For our prior coverage, see here and here. As the currency lurches towards and away from a potential dissolution (in part or in [...]

Comment on Alphabet Soup: HSBC, FBAR, And OVDI (Offshore Voluntary Disclosure Initiative) For Foreign Bank Accounts by IRS Reopens Offshore Voluntary Disclosure Initiative (OVDI) For Delinquent FBAR Filers: 27.5 Percent Penalty « Tax Blawg

Tue, 10 Jan 2012 14:38:02 +0000

[...] in the past, yesterday’s move follows a carrot-and-stick approach in which the IRS announces an opportunity for delinquent filers to come clean, but only after the [...]

Comment on After the Flood: Has Codification Changed Economic Substance? by Treasury Finalizes Conduit Financing Regulations Under Section 881 « Tax Blawg

Mon, 09 Jan 2012 17:12:13 +0000

[...] other questions about the intersection of technical rules with common-law doctrines. As we have discussed previously on the Blawg, after the codification of the economic substance doctrine, the “relevance” of the [...]

Comment on How Long Does The IRS Have To Audit Your Return? by Agility Drills

Agility Drills — Thu, 22 Dec 2011 01:52:07 +0000

Good info thanks .. would a distribution from a 401k be considered income.. I know you have to pay tax on it but would the amount of the ditribution be considered gross income or some other type of income