Discussion:Insurance Company Demutualization
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| Anyway, things on this front seem to be in a state of flux and will likely remain so for the foreseeable future. I might contact these clients to let them know that they are potentially affected, but a little voice is telling me not to open that can of worms at this early stage. My preliminary assessment is that the difference in the tax liability for 3 of these clients will be between $500 and $600, but the difference for the 4th client could be more than $1,300. At this point, I'm just fiddling with numbers to see if there is any need to look further. I plan to proceed with caution, especially since the IRS hasn't exactly thrown in the towel on this.}} | Anyway, things on this front seem to be in a state of flux and will likely remain so for the foreseeable future. I might contact these clients to let them know that they are potentially affected, but a little voice is telling me not to open that can of worms at this early stage. My preliminary assessment is that the difference in the tax liability for 3 of these clients will be between $500 and $600, but the difference for the 4th client could be more than $1,300. At this point, I'm just fiddling with numbers to see if there is any need to look further. I plan to proceed with caution, especially since the IRS hasn't exactly thrown in the towel on this.}} | ||
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| + | {{ForumReplyPost|UserID=Neil Mink|Date=14 August 2008|Text=Assume you were going to amend for this--what would you do? Remove the proceeds completely from Schedule D? Have the proceeds equal to basis on Schedule D? Will a gain ever be recognized on these transactions and how will they be computed?}} | ||
Revision as of 02:30, 14 August 2008
Discussion Forum Index --> Tax Questions --> Insurance Company Demutualization
Death&Taxes (talk|edits) said: | 11 August 2008 |
| RIA reports that the Court of Claims found favorably for the taxpayers in
Eugene A. Fisher et al. v. U.S. (Ct Cl 8/6/2008) 102 AFTR 2d Basically the court ruled that taxpayers were permitted to use their investment in the contract as the cost of the shares. | |
| 11 August 2008 | |
| Most I know I have always picked up the proceeds from the 1099-B with zero basis. This is interesting. | |
| 11 August 2008 | |
| Very interesting indeed. I just skimmed it and will read it in depth tonight.
Here's the link: http://www.legalbitstream.com/scripts/isyswebext.dll?op=get&uri=/isysquery/irl12c3/1/doc | |
Death&Taxes (talk|edits) said: | 11 August 2008 |
| Kiplinger indicates IRS will not acquiesce and thus refund claims will be prospective and held by the Service. | |
| 11 August 2008 | |
| Oops. Insofar as I can tell, the legalbitstream link I provided deals only with the class-action class certification of taxpayers who have encountered tax liabilities due to demutualization. So far I haven't been able to find the "final" decision cited above, but it's only 5 days old so maybe soon.
PS: Thanks, D&T for the McLaughlin fax | |
| 13 August 2008 | |
| Ok, I finally found a source for the full text of the Fisher Demutualization decision. Here she be: | |
| 13 August 2008 | |
| Must be mental telepathy. A client asked me today if there was anything new on this. | |
| 14 August 2008 | |
| I just performed a query on my TY2007 ProSeries database and found 4 clients who may be affected by this, 2 of which are virtually certain (assuming this is ultimately resolved against the IRS).
I don't think my TY2005 and TY2006 versions of ProSeries will allow me to perform the same query although I really haven't looked at this carefully. Anyway, things on this front seem to be in a state of flux and will likely remain so for the foreseeable future. I might contact these clients to let them know that they are potentially affected, but a little voice is telling me not to open that can of worms at this early stage. My preliminary assessment is that the difference in the tax liability for 3 of these clients will be between $500 and $600, but the difference for the 4th client could be more than $1,300. At this point, I'm just fiddling with numbers to see if there is any need to look further. I plan to proceed with caution, especially since the IRS hasn't exactly thrown in the towel on this. | |
| 14 August 2008 | |
| Assume you were going to amend for this--what would you do? Remove the proceeds completely from Schedule D? Have the proceeds equal to basis on Schedule D? Will a gain ever be recognized on these transactions and how will they be computed? | |
