Form 2210AI and capital-loss carryover

I need to file Schedule AI of Form 2210, because I made a big Roth conversion in the 4th qtr of 2009 and did pay estimated taxes on it until Jan 2010. I am using TurboTax and it's handling it pretty well, but I'm confused about how my capital loss should be handled. In particular, I have a $38K short-term capital-loss carryover (from 2008 to 2009). In a 2009, I have $23K in short-term gain and $17K in long-term losses. Thus I have a minus-$3K entry on Line 13 of Form 1040, and $12K and $17K short- and long-term capital loss carryovers to 2010.

So my question is two-fold. First, how do I credit the $3000 loss, which is part of my AGI, to the four annualized installments on Form 2210AI. Do I credit minus-$750 per installment, subtract it all out in the first period, or what ? Second, how do I handle the massive carryovers from 2008 and into 2010 ? Is the allowed $3000 loss the only thing that matters for 2210AI purposes ?

Thanks

Reply to
JGE
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You put the full $3,000 in every quarter. It happened last year so affects the first quarter of the current tyear. Yes, it Annualizes to a dedution of $12,000 AGI and hence taxable incomeI, but that's how the rules read. The same distortions occur with IRA contributionsin the first quarter and /or deferring IRA distributions until the 4th quarter.

Keep track of your carryovers on the CLCaryover worksheet, For 2210 AI purposes the net amount (probably $3,000) starting each year is pertinent.

For more information and a 2210 AI calculator try a web search

Reply to
ed

You start the year with a $3,000 usable capital loss. None of it is used up by the end of the year, so you use $3,000 as the capital loss for each of the four periods. Other than than, the carry overs have no further impact on 2009. At least you had significant gains during

2009; that suggests you didn't stay out of the market after the lows in February. Good for you. Perhaps you'll regain the rest this year.
Reply to
Tom Healy CPA

Ok, so you're not saying I get an ADD'L $3K deduction for EACH period, just that I deduct it for the FIRST period and then since the add'l periods are cumulative, it gets deducted on the other three periods too.

I'm still confused on the capital-gains tax worksheet part, because TurboTax insists that the year-end capital gain/loss includes the carryover. I think this is a mistake. But it doesn't seem to affect the penalty much one way or the other.

Thanks, yes, I tax-loss harvested like a maniac in 2008, getting out of some high-OER active funds. I did not get out of the market, But in

2009, I sold my replacement ETFs for what I really wanted, hence the big short-term gain.
Reply to
JGE

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