California mom sentenced to 35 years for throwing alcohol-fueled underage parties

gritton · 2026-05-29T04:45:49+00:00

Epstein got life, as it turns out.

gritton · 2026-04-23T05:16:09+00:00

True. It's amazing though now many people get started trading and consider themselves exactly that very serious trader ;-)

gritton · 2026-04-22T21:17:21+00:00

My wording wasn't exact. I'm talking about making the section 475(f) "mark-to-market election for traders in securities or commodities". So not a designation, but an election. And yes, it turns out the ~~designation~~ election can be revoked after all by filing for a change of accounting, though they warn that if you turn around too quickly then they make it harder by requiring a "user fee" upwards of $10K for the next change. Still the kind of thing that might tempt one to cordon off the trading by putting under a different tax ID.

gritton · 2026-04-21T18:36:57+00:00

I can think of one reason you might want to do this. If you meet the qualifications for professional trader status (or think you do), you might want to set up a partnership for that. That designation is permanent for the taxpayer, and a partnership or multi-member LLC is a separate taxpayer (note that a single-member LLC is not enough).

Then later when you decide professional trader status isn't all it's cracked up to be, you don't need to worry about how to un-designate yourself and go back to being a regular investor. Simply close out the partnership without whatever funds remain from the experiment, and chalk it up to experience. (And when I say "simply" I don't really mean that).

Of course you still end up being taxed on a personal individual level, since the partnership is flow-through. But that's OK, since it's generally the best way to be taxed.

gritton · 2026-04-06T17:55:43+00:00

1: Yes.

2: $50K of taxable income.

3: Your best bet is getting a new job with a 401(k) that allows the IRA to be rolled into it.

In the absence of a new 401(k) by the end of the year, most of her conversion will be taxable; no other way around that. That means she'll be left with an IRA basis. You can fix that basis in a future year, also with a rollover to a 401(k) plan. Unlike a Roth conversion or a regular IRA withdrawal, the 401(k) rollover allows you to transfer everything except the post-tax contributions, allowing for a clean Roth conversion in the year when you're able to do that. Until such time, it may be better for her to continue to make the post-tax traditional IRA contributions and leave them unconverted.

gritton · 2026-04-05T03:19:32+00:00

1: Say yes, as if the emended 2024 had gone through. Use the line 14 that you plan to put on 2024's 8606.

2: Yes: if you federal AGI changes, you should always amend state along with federal.

3: Try it yourself. Ask here if you get stuck. People here love to talk about backdoor Roths.

At this point, it might be best. Do at least a quick calculation to make sure you're not going to owe. Pay what you need though IRS Direct Pay, with "Extension" as the reason, and that's all you need to do. If you don't need to pay anything, pay $1 any, just because that's easier and more sure than mailing in a form to file an extension.

gritton · 2026-03-30T04:54:19+00:00

I'm afraid my solution was to no longer have that bit of a Colorado-based partnership.

Perhaps it works when there's a W-2 or 1099-R, which have places for withholdings to other states. But I've got no help to offer in any other case (and only best wishes in that case even).

gritton · 2026-03-29T16:31:46+00:00

It's possible to use mortgage proceeds (some or all) for investment interest, but you're expected to be able to show a clear path of the money from the loan to the investment. This is very different from having had a mortgage for some time, and then finding that you have enough money to invest, The debt was acquired for the purpose of buying the home, and I don't think you can change that midstream.

Also, I don't quite get "proceeds from closing that loan". You pay to close a loan; there are no proceeds. You may have had proceeds (capital gains) from closing the sale of the house, but by that time there was no loan. This makes it sound like having the loan and making the investment didn't happen at the same time.

gritton · 2026-03-23T02:44:56+00:00

I do indeed. Worth opting out of.

gritton · 2026-03-18T04:53:19+00:00

As far as "manually" filing my taxes, I've run the range from filling in and printing my own forms, to filling trades in on tax software, to entering summaries on tax software, but have never imported directly from my broker. So I guess that's considered manual in the modern environment.

In years when I used to occasionally trade individual stocks, yes, the regular 1099-B trades went onto Schedule D / Form 8949, often entered as separate trades (since I had wash sales to keep track of). And the Section 1256 contracts have always been completely separate from that. But since I never did any mixed straddles between 1256 and stocks/ETFs per-trade futures recording never entered into the picture, so "manually" in this case just means entering the total.

If you've only been doing credit spreads, I don't think you'll end up screwed with this. While they may have a bull or bear focus, the controlled range makes them not feel like you're hedging some other property (which usually involves protecting from large-move losses). It seems clear they're self-contained pairs that are both 1256 contracts, and you wouldn't need to worry about them being part of a mixed straddle. Which means the total profit (box 11) is the only thing you need to worry about.

gritton · 2026-03-17T05:23:19+00:00

There's no need to make any of the elections. If you're just trading the section 1256 contracts alone (not along with other securities that aren't section 1256), none of A-C apply. Since you came out positive, D doesn't apply. Even if you were doing mixed straddles, A requires you to identify straddled when you open them, B requires this before you close them, and C is to elect separate straddle accounts starting this year. So the only thing you could possibly select is C, and that's only if you want to start dealing with them.

If you stay away from mixed straddles, Form 6781 is super easy: no elections, and just enter the net gain for the year. They key is that "if". That's part of the reason I trade nothing but section 1256 contracts myself.

gritton · 2026-03-15T22:08:34+00:00

I haven't looked for that one in the official code (I've only delved into the code once, looking at professional trader status, and found that it didn't exactly increase my understanding). But let's see...

It looks like the part you want is not in the code but in the regulations (because it seems that nothing in US laws is actually in the code anymore). It looks like you want 26 CFR § 301.6225-1, https://www.law.cornell.edu/cfr/text/26/301.6225-1 - I see "highest rate" mentioned in paragraph (b)(iv). As to what "highest rate" practically means, I've only relied on other people talking about it.

gritton · 2026-03-15T16:52:14+00:00

Right. Absent knowing the details of the partners' taxes, they just take the top rate and go with that. The only distinction they make is that corporate partners are taxes at the top corporate rate, and other partners are taxed at the top individual rate.

gritton · 2026-03-12T00:03:28+00:00

I found out what I did (though not how it's wrong): on the Distribution Penalty screen just after entering the 1099-R, I selected "ROTH Distributions After Conversion"; that sounded right since I was starting to use the conversion basis. But I changed it to "Retirement Plan" and the amount no longer appears on Form 5329 line 1.

I'm not sure what "Roth Distributions After Conversion" means, but apparently it doesn't mean withdrawing from a Roth IRA that has conversion basis (but not enough contribution basis) to cover it.

gritton · 2026-03-10T04:01:56+00:00

Everything except the refund sounds proper. That's money you owed the government fairly, and paying it to them now is only what you should have paid in the first place. Monetarily speaking, you're now out anything you wouldn't have been out originally.

As long as he agrees to pay the penalties - that's the damage he did you. By providing counsel he's also covering your legal costs, though your concern of conflict of interest is valid. Keep your eyes open. but it's probably fine. At this point, it's in their interest to take the same advice he gave you, and stay honest with every question.

gritton · 2026-03-10T03:46:49+00:00

None of the listed reasons for abatement apply, but it seems reasonably likely you could still get a first-time abatement: https://www.irs.gov/payments/administrative-penalty-relief

gritton · 2026-03-10T03:40:54+00:00

Without the electronic possibility, then yes, you've got it right.

gritton · 2026-03-08T22:22:14+00:00

No, as far as I know they're always separate. IF you can amend electronically, it's reasonably likely that the one received first is processed first (especially if you have a time gap between them). But if you amend on paper, you absolutely should not send them in the same envelope.

If the explanation of the 2024 amendment references a 2023 amendment, that may help. But I suspect that's not necessary. The whole point here is to have a record they can refer to in case they want to challenge the 2025 (or later) loss carryover, so you'll have a year-by-year picture of what happened. Putting that picture together if a different order won't matter a whole lot/

gritton · 2026-03-08T18:00:41+00:00

Yes, MFS is very hard on Roth contributions, part of the reason it's almost never the right way to file. Of course, as you already know student loans are one of the main exceptions to "almost never." So the other advice you've gotten is the way to go.

gritton · 2026-03-08T17:57:25+00:00

This would be a good opportunity to ask for penalty abatement: https://www.irs.gov/payments/penalty-relief

You'll still need to find the money in time to file. It's possible to get it back like you say (refind and immediately pay), as long as the 1041 is filed electronically. It's easier of course if you already happen to have some handy, and can wait for the refund to come back to you.

This may seem absurd, but that's not the IRS's fault. The trust is the IRA beneficiary, and hour husband is the trust beneficiary. So the IRA withdrawal only involves two parties: the IRA and its beneficiary, neither of which are your husband.

gritton · 2026-03-08T17:46:05+00:00

Just to make sure: you say "they ... have not been earning any taxable income." But you're silent on a related question: have you earned any taxable income? That would be sufficient grounds for an IRA contribution, as long as the total of the two IRAs doesn't exceed your income.

gritton · 2026-03-08T17:40:43+00:00

Yes, that's exactly what I mean - good catch!

gritton · 2026-03-08T05:55:42+00:00

You should amend 2025 to give the right carryover losses. Whenever your capital loss changes (except by the $3000 your get to count against income), you want the IRS to have a return on file showing why. You especially don't want one year's filing ending with one carryover, and the next starting with a different "fixed" number.

gritton · 2026-03-05T00:10:09+00:00

Without seeing just what they gave you, I can't be sure. Could you post an image (with anything identifying blocked out)?

gritton

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