calgary,
div should be reported on Schedule B. for my case, Usually bsnk won't allow you to reinvest once you become US resident. The div would be paid out. Still you will do both, pay tax on div on schedule B, and do MTM on the fund.
i
the highest aggregate balance of the year
Moderator: Mark T Serbinski CA CPA
"when using MTM for taxation of mutual fund, is any dividend (which is reinvested in the fund and contribute to the value of MTM calculation) reported in schedule B? "
sorry, i just got your question right. well, i guess if you do both, then it seems to tax twice. i would just do it with MTM. so it is taxed on high rate 20% instead of 15% (if you are in that income level). IRS will do the accuracy certification, and why just do it easy (make sure you do not pay less), and let them corret.
sorry, i just got your question right. well, i guess if you do both, then it seems to tax twice. i would just do it with MTM. so it is taxed on high rate 20% instead of 15% (if you are in that income level). IRS will do the accuracy certification, and why just do it easy (make sure you do not pay less), and let them corret.
Hello. I am new to the world of ovdi, and came to this board because of the post at the beginning of this thread: How does one calculate the highest aggregate balance for purposes of the penalty computation worksheet?
Is the HAB = the amount that represents the aggregate of the highest total balance for just one of the eight years from 2003 through 2010?
Or is the HAB = the aggregate of the highest balances for each of the eight years, all added together?
And in figuring out the aggregate highest balance for a specific year, is it = the highest balance in account #1 (which might have been on Apr. 4 of that year) + the highest balance in account #2 (which might have been on Nov. 22 of that year) + ... + ... ? Or, is it the aggregate balance on some specific date in the year when the balances of all accounts were, when combined, at their highest?
Is the HAB = the amount that represents the aggregate of the highest total balance for just one of the eight years from 2003 through 2010?
Or is the HAB = the aggregate of the highest balances for each of the eight years, all added together?
And in figuring out the aggregate highest balance for a specific year, is it = the highest balance in account #1 (which might have been on Apr. 4 of that year) + the highest balance in account #2 (which might have been on Nov. 22 of that year) + ... + ... ? Or, is it the aggregate balance on some specific date in the year when the balances of all accounts were, when combined, at their highest?
you use this xsl to calculate your highest aggregated balance
http://www.irs.gov/pub/irs-utl/2011ovdi ... ksheet.xls
if there is duplicate (say you transfer fund from account A to account B with amount M, you take out that amount M) and make a note thta the fund is removed due to duplicate with detail of the transfer
there is no clear math def on how to calculate HAB, it would be helpful explain the duplicated amount
http://www.irs.gov/pub/irs-utl/2011ovdi ... ksheet.xls
if there is duplicate (say you transfer fund from account A to account B with amount M, you take out that amount M) and make a note thta the fund is removed due to duplicate with detail of the transfer
there is no clear math def on how to calculate HAB, it would be helpful explain the duplicated amount
Thank you for this information. However, my problem is that I have the penalty computation worksheet open in front of me, and I can't conceptualize how it works.
Let me see if this way of expressing my confusion is any clearer: If the highest balance in account #1 in 2003 is in April, and the highest balance in account #2 is in November, do I add those two together to get the aggregate balance of all accounts in 2003?
Or is the aggregate 2003 balance found by looking for the date on which the combined amount of both accounts is at its highest for the year, all at once? If the date of highest balance is in July, but the highest balance for acct #1 is in Apr. and the highest balance for acct. #2 is in Nov., what do I enter on the form for 2003?
And then is the amount used to calculate the penalty for just whatever single year has the highest of all aggregate-for-year balances?
Let me see if this way of expressing my confusion is any clearer: If the highest balance in account #1 in 2003 is in April, and the highest balance in account #2 is in November, do I add those two together to get the aggregate balance of all accounts in 2003?
Or is the aggregate 2003 balance found by looking for the date on which the combined amount of both accounts is at its highest for the year, all at once? If the date of highest balance is in July, but the highest balance for acct #1 is in Apr. and the highest balance for acct. #2 is in Nov., what do I enter on the form for 2003?
And then is the amount used to calculate the penalty for just whatever single year has the highest of all aggregate-for-year balances?
for each year from 2003 to 2010
let say you have three accounts A, B, C. and their highest balances are Ha, Hb, and Hc. You just add them all together Ha+Hb+Hc -- that is for that year.
The 25% (12.5% or 5%) will be applied to the highest of thoes years, let say in your case, it is in 2006, you just use that value as your penalty base.
As for duplicate amount (related to fund transfer), you can remove.
Now, the reason I started this thread is that becuse there is no clear math defination on how to calculate in the case when these accounts are dynamic -- in case like mutual fund and stocks.. as you said "account A peaks in Jan while account B peak ain June, etc.. in my view, it should be defined on total balance -- so it automatically removes the duplicates -- also it is fair to taxpayer for penalty on his/her real wealth -- not artificial one...
For example, account A stock peaks in Jan and then down 50% in june, while account B in bond market is low in Jan but peak in June.. the total wealth for that year should NOT be the account A's balance in Jan plus account B's balance in June. Instead it should be (A+B) at the same time -- then pick the high value.
The OVDI does not do that, as you can see from what IRS provides the calculation xsl file.
If your accounts are stable, that may not make much difference. For those in stocks/bond and mutual funds, it is really bad.
let say you have three accounts A, B, C. and their highest balances are Ha, Hb, and Hc. You just add them all together Ha+Hb+Hc -- that is for that year.
The 25% (12.5% or 5%) will be applied to the highest of thoes years, let say in your case, it is in 2006, you just use that value as your penalty base.
As for duplicate amount (related to fund transfer), you can remove.
Now, the reason I started this thread is that becuse there is no clear math defination on how to calculate in the case when these accounts are dynamic -- in case like mutual fund and stocks.. as you said "account A peaks in Jan while account B peak ain June, etc.. in my view, it should be defined on total balance -- so it automatically removes the duplicates -- also it is fair to taxpayer for penalty on his/her real wealth -- not artificial one...
For example, account A stock peaks in Jan and then down 50% in june, while account B in bond market is low in Jan but peak in June.. the total wealth for that year should NOT be the account A's balance in Jan plus account B's balance in June. Instead it should be (A+B) at the same time -- then pick the high value.
The OVDI does not do that, as you can see from what IRS provides the calculation xsl file.
If your accounts are stable, that may not make much difference. For those in stocks/bond and mutual funds, it is really bad.
Thank you. I think I am starting to understand. So my penalty base is the aggregate balance for whatever year my total balances were the highest.
For me, since I have just one really bad stock investment, I would try to find the single date when all my checking and savings accounts etc. are all at their highest? With various cash accounts going up and down, I can see that this will be pretty strange! I guess I can start by finding the 12 days each year in which my chequing account is at its highest (payday, usually) and then look to see what all the others are on those dates, do the arithmetic, and then pick one of those dates?
What happens if I mess up, and there was some date when my chequing account balance was headed downward but some other money was added to another account for awhile and created a higher balance on another date? Is that going to somehow disqualify me? I can probably dig out all my old chequing account statements, but passbooks kind of lurch from one balance to another. Should I spreadsheet all my accounts for 365 days each year to make sure I get it exactly right to the penny?
For me, since I have just one really bad stock investment, I would try to find the single date when all my checking and savings accounts etc. are all at their highest? With various cash accounts going up and down, I can see that this will be pretty strange! I guess I can start by finding the 12 days each year in which my chequing account is at its highest (payday, usually) and then look to see what all the others are on those dates, do the arithmetic, and then pick one of those dates?
What happens if I mess up, and there was some date when my chequing account balance was headed downward but some other money was added to another account for awhile and created a higher balance on another date? Is that going to somehow disqualify me? I can probably dig out all my old chequing account statements, but passbooks kind of lurch from one balance to another. Should I spreadsheet all my accounts for 365 days each year to make sure I get it exactly right to the penny?
for your stocks or mutual fund, you may just use monthly statements to find the highest balance. no need to dig out on max at certain date unless you have daily statements.
IRS wants you to list each account with their highest value on each year.. that is why they provide an xsl file for you to fill in. You need to find each account's the highest value in each year. these accounts may not have to be on the same date to reach highest value.
IRS wants you to list each account with their highest value on each year.. that is why they provide an xsl file for you to fill in. You need to find each account's the highest value in each year. these accounts may not have to be on the same date to reach highest value.
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calgary-alberta
- Posts: 36
- Joined: Fri Jun 03, 2011 4:38 pm
Hi tsanaha
did you include RRSP when you use the xsl to calculate the highest aggregated balance. I do not think RRSP should be included in this calculation as RRSP has been tax deferred by 8891.
http://www.irs.gov/pub/irs-utl/2011ovdi ... ksheet.xls
did you include RRSP when you use the xsl to calculate the highest aggregated balance. I do not think RRSP should be included in this calculation as RRSP has been tax deferred by 8891.
http://www.irs.gov/pub/irs-utl/2011ovdi ... ksheet.xls
calgary,
I did not include RRSP in the base as I filed with f8891 and made tax deferral election. if IRS wants to impose penalty on RRSP, they will have to reject my deferral election (late election). Based on all the LPR -- IRS seems always grants this kind election -- so i hope they will do so inside OVDI.
Reject late tax deferral election would basically force taxpayer into tax evastion on RRSP undistributed gain.
I did not include RRSP in the base as I filed with f8891 and made tax deferral election. if IRS wants to impose penalty on RRSP, they will have to reject my deferral election (late election). Based on all the LPR -- IRS seems always grants this kind election -- so i hope they will do so inside OVDI.
Reject late tax deferral election would basically force taxpayer into tax evastion on RRSP undistributed gain.