I just downloaded my K-1 and am shell shocked. I have $1,100 in income on the 2500 shares I owned for a few months last year.
Imagine if you bought 25,000 shares and held? All your capital gains would have gone to taxes!
People should realize this before they buy.
Oh well, still wish I hadn't sold at $3.80!
Thank you so much. I wasn't aware of all these variables. I'll read the instructions and talk to a cpa before I write anymore checks. I've been heavily in this stock since $1.50 and these taxes are no big deal. TO $15.00 AND BEYOND!
Thanks. I took the K1 to my accountant today so we will see. Either way the phantom income hurts. I never saw $8,800 in interest ot $759 in dividends which I am now liable for tax on. I received just one $200 dividend in 09.
So I bought 8,500 shares of KFN in my 401(k) self managed account and sold most of the position in 2009.
I received a K-1 - do i need to do anything with this? Why would I need to do anything since the transaction is in my 401(k)?
also, why is this coming now - 2 weeks prior to the tax filing deadline.
You are reading it wrong...
INCOME on my 6k shares held 6 months was $6300. That's Approx 1.05/share income. If a full year holding makes a difference, double it. That's 2.10 per share INCOME. not tax. Multiply by your marginal tax rate and you have your tax...
That $2.50 tax estimate is about right. I am shocked also. I figured $2.37 per share in taxes. I have held 4000 shares since early 08 so after paying tax for 4-5 years a stockholder is really screwed even if dividends come all the way back to pre crash levels the tax wipes you out. I have held this since 08 and I don't remember a K1 tax hit in that year. I am going to do nothing since I already had my CPA file but I will need to amend next year when I file. Hopefully I can dump this KFN in one more year at close to breakeven. I paid 16.25 per share in early 08 and .65 for 1000 shares later that same year!!!
The amount of taxes varies to the bracket one is in. The income level after deductions would be better as that would be the amount to apply to your income before going to the tax table.
My main point is about the download of the "IRA" part of the KFN K1 and it looks like the IRA is not treated on the tax reporting 1040 for an IRA purpose, but could be handled as some have said on the board though the custodial 990-T through the financial house itself, who is responsible for your account. This does make sence as any withdrawals from any IRA is taxable at income levels upon the point of withdrawal which is more benefical to the government.