When do you include option contract cost basis in tax return?
Let say I have 1 long contract I used $100 dollars for it in July 2011. The contract expires in Jan 2013. The contract still on my portfolio, I never touch.
Should I put the option contract $100 cost basis in 2011 tax return or put in 2013 tax return? wait til the contract expire?
Publication 550 (2011), Investment Income and Expenses
Chapter 4. Sales and Trades of Investment Property
Good Luck to you.
Hope that you find the above enclosed information useful. 09/22/2012
Vodacom shares returns?
Did anyone invest in that vodacom shares about 5 years ago? And did you get any returns and how much? Thanks in advance
1. In May 2011, Vodacom paid a year-end dividend of 280 cents, bringing its total dividend for the year to 460 cents.
2. In November 2010, Vodacom paid its shareholders a dividend of R2,7bn, or R1,80/share, an increase of 63,6% on a year ago, as a result of strong growth in cash generated from operations.
3. Other news items are as(please read the website for full details):
Cash for growth and dividends
4 May 08:59 GMT
… more than R500-million. Telecoms giant Vodacom, with cash reserves of R1-billion … shareholders in the form of dividends”. Multimedia multinational Naspers said … is mainly used to pay dividends.” Investment holding company Remgro …
Dividend tax drags Vodacom earnings down
3 May 11:02 GMT
… (STC) that is paid on dividends. At its last reporting period … of dividends. The operator paid out R3.8 billion in dividends after … dividend, and 280c at year-end. In a trading statement released yesterday, Vodacom … because of STC on higher dividends, the movement in net deferred …
Vodacom expects higher FY earnings
3 May 10:03 GMT
JSE-listed Vodacom expects 10% growth in earnings … tax on companies on higher dividends and the movement in net … the year ended March 2011. Vodacom would release its results for …
Vodacom forecasts higher profits
2 May 16:23 GMT
South African mobile operator Vodacom said on Wednesday it expects … , hit by tax on higher dividends paid and depreciation from higher … year’s 656 cents. Vodacom shares closed trading 0.56 …
does a 13 year old who earns $5000 in 2011 need to file a tax return?
Neither Anthony nor Cara know jack.
HOW did you earn this money? Is it from a job where you got a W-2? Or is it “Self employed” income? Or is it “unearned income” from investments? The answer will determine whether you need to file a return.
1) A W-2 job. You would have had FICA (social security and medicare) withheld. You cannot claim a refund on that. IF you had income tax withheld, then you would need to file a return in order to geet your refund. A dependent cannot claim the personal exemption (a deduction) but can claim the standard deduction. It was $5800 for 2011.
2) Did you have a “business” where you earned the money? Then you would have to file the return with a Schedule C (self-employed income) and a Schedule SE (self-employed tax). The SE tax is basically FICA (social security and medicare). FICA has an employee “contribution” and an employer “contribution”; so as self employed, you are both employee and employer. On $5000 you will owe SE Tax.
3) Unearned Income. If your income only came from interest and dividends from investments, your standard deduction is limited to $950. So either you have to file a return or your parents would claim your income on their return. This is known as “Kiddy Tax”.
Of course, the IRS doesn’t make anything easy, so if your income is any mix of W-2, self-employed income and unearned income, you have to use a worksheet to determine your actual deduction and whether you will owe any tax.
“How is a 13 year d legally working to begin with”
A chld, regardless of age, may legally work in the parent’s business.
Question regarding gain on investments and consolidations.?
Hi, I have a question regarding gain on investments and consolidations.
If a parent entity acquires a subsidiary, say in 2010, for $10,000. In 2011, the investment in the subsidiary has increased to $15,000.
On the parent’s book you would:
Dr Investment in subsidiary 5000
Cr Revaluation Reserve 5000
The below questions are what I am confused with in regards to consolidation:
-How does the subsidiary account for the increase in the investment?
-What happens to the subsidiaries 2011 books due to the revaluation surplus?
-How do you account for the revaluation upon consolidation? would you reverse the revaluation surplus transaction, i.e:
Dr Gain on sale of shares 5000
Cr Revaluation surpls 5000
Doesn’t sound like consolidation at all. There are 3 ways of accounting for an investment:
1) Fair value (0-20% control over the subsidiary)
2) Equity Method (0-50% control over the subsidiary)
3) Consolidation (50%+ control over the subsidiary)
Note: The idea of “control” can involve other factors besides monetary investment. If the sub’s board of directors is composed of the the same people as the board of directors of the parent company, even if the parent company only own 20% of the sub’s equity, the parent still /effectively/ have control over the company, and should consolidate.
Sounds like you’re trying to do the journal entries for fair value investment gain.
Dr Fair Value Mark-up 5000
Cr Valuation reserve 5000
Dr Investment in subsidiary 5000
Cr Gain on investment 5000
Gains on investment held at fair value flow directly through the income under the fair value method. Under the equity Method, you recognize income when the subsidiary has net income, so that the value of your investment on your books is tied to the subsidiary’s equity, and decrease investment when you get a dividend (because it’s a return of capital, like paying back principal on a loan).
In consolidation accounting:
The subsidiary doesn’t do anything to account for the “increase in investment”. That would be a fair value valuation, and the subsidiary primarily does their accounting on a cost basis as always (except for certain items like investments which are accounted for at fair value). The sub doesn’t change anything in it’s accounting just because the parent is going to use consolidation accounting.
The revaluation surplus doesn’t appear on the subsidiary’s books.
Consolidations are done in a separate set of books. Essentially, both companies operate separately. Then, when it’s time to produce financial statements on a consolidated basis, the accountants try to determine, “Well, what if they HAD merged into a single company when we made that investment?” This is done with the separate set of books which track all the cumulative changes ever since the date that consolidation accounting was triggered. They then take all those changes to find the hypothetical journal entries needed to show the parent company consolidated with the subsidiary.
Some examples of items those journal entries need to accomplish in the consolidation process:
1) Intercompany assets/liabilities need to be eliminated so you’re back to being seen as a consolidated entity instead of 2 separate entities.
2) Step-up in basis for assets needs to be applied (If the sub has 10k of equipment, and the parent buys the sub and pays 15k for the equipment, then the parent’s cost basis in that equipment is 15k, meaning you need to add a 5k step-up to the sub’s 10k basis to get to the parent’s basis)
3) Depreciation on the increased FMV
4) Eliminate subsidiary equity so only parent equity is left.
5) Apply goodwill if any.
6) etc. Etc.
Consolidation accounting is much more complex than the entry you’re looking at above. You’ll encounter these topics in your Advanced Accounting class. It’s not particularly difficult, just a lot to remember.
how much returns given in 2001-2012 by nifty?
Hi i just want to know how much % returns given by Indian equity market in last 12 years from other investment tools such as banks. mutual funds & other ?
2002 to 2007 at an average of 15 to 17 %.
2007 to 2009 at an average of (-) 22%.
2009 to 2011 at an average of (+) 5 to (-) 5%
Very rough estimate
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