My gross income in 2007 was less than $8,750. In 2007, I sold a stock which I had held since 1998. I understand that I need to file Schedule D and 1040 because of the long term capital gain tax. However, I read in the instructions of the
1040, that I should file tax return if my gross income was $8,750. However, my gross income was less than that figure.My question is: should I file the 1040?
If your other income plus the reported gross *proceeds* are more than $8,750, strongly consider filing even if technically you don't have to. If you don't file, the IRS will assume the entire sales proceeds are a gain (i.e. will assume zero basis). They will then send you correspondance asking why you didn't file and you'll have to deal with that. If you instead of just file (even though you don't have to), you won't have to deal with any of that.
-- Rich Carreiro snipped-for-privacy@rlcarr.com
"kb" wrote
How much was the gross sales amount (the proceeds not the gain) on the stock sale? That amount, in addition to all other income, will decide if you need to file.
But of course, this year is different, and you may want to - and indeed need to - file to receive your "economic stimulus" check later this summer.
don't you want free money from the government?
And even if the IRS didn't bother you residents of California would get a really nasty letter from the Franchise Tax Board (FTB) along the same lines. Especially if your capital gain was exempt (such as the sale of a house where the gain was less than $250K for a single person etc
And if you lived in California the Franchise Tax Board would send you a very threatening letter, especially if you sold a personal residence whose gain was tax exempt
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