CPA told me he had a new client who had $22,000 in capital gains from a January sale of stock. When he told him how much he owed in Federal and State taxes, the client replied he had unpaid refunds in excess of the taxes due.
Since your State Income Taxes actually paid is deductible, why is not rolling forward the refunds considered constructive receipt?
Dick
I'm not clear, which tax year(s) are we talking about?
Again, which tax year are we talking about for each refund and payment? By "unpaid refund", do you mean, "refund applied as estimated payment toward next tax year"?
If you itemize...
-Mark Bole
It's my understanding that the capital gains were from Jan 2008 and the accrued refunds were from 1999 through 2007.
The explanation I heard was this guy was paranoid because of an audit he had in the mid-90's.
Dick
Then the question should be posted to the unmoderated group! ;-)
This sounds as though he never filed for those years even though he "could have" received state refunds. No filing.. No constructive receipt. In fact, the state owes him nothing until he first establishes that a refund is due. And.. let's not forget that states have statute of limitations on obtaining refunds.
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