There has been a lot of confusion over this issue. At one point, it appeared that the IRS would allow after-tax contributions to a 401(k) to be rolled tax-free into a Roth IRA. But now the IRS says the same rules will apply as to rollovers from traditional IRAs. You can't cherry pick the aftertax contributions and move them to a Roth IRA. Instead, any transfer will be considered a combination of pre-tax contributions, untaxed earnings and after-tax contributions. So, a portion of the rollover would be taxed as ordinary income in the year of the conversion.
The insurance settlement is tax-free, but the part of the
new roof paid for with insurance can’t be added to your basis. So, the depreciable basis for the new roof is the $5,000 difference between the settlement and the cost of the new roof. You depreciate it over 39 years.
No, parents can't claim a deduction for interest paid on a child's student loans. But, the child can. The law treats it as though the parents give the money to the child and the child pays the interest. Up to $2,500 a year can be deducted as an adjustment to income, which means the child doesn't have to itemize to benefit. And in most cases, yes, you must use your carryover losses each year or forfeit any part of the $3,000 maximum carryover you don't use. There are some exceptions that generally apply only to very low income taxpayers. But, in general, you don't get to pick and choose when to use them.
Not sure what you mean. Who do you want to transfer the stocks to? Although you are the custodian, the stocks in the account belong to your daughter,
I retired a couple of years ago and currently have a small side business. As far as I know, as someone who is self-employed, I can deduct my health insurance and long-term care insurance premiums to the extent of my profit from my business. What are the restrictions on this? My long-term care insurance is one I bought myself, but my health insurance is through my previous employer (partially subsidized by them). Can I still deduct the amount I pay for health insurance premiums?
There has been a lot of confusion over this issue. At one point, it appeared that the IRS would allow after-tax contributions to a 401(k) to be rolled tax-free into a Roth IRA. But now the IRS says the same rules will apply as to rollovers from traditional IRAs. You can't cherry pick the aftertax contributions and move them to a Roth IRA. Instead, any transfer will be considered a combination of pre-tax contributions, untaxed earnings and after-tax contributions. So, a portion of the rollover would be taxed as ordinary income in the year of the conversion.
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