Broker Check

December 13, 1991


          For 1991, home office expenses are listed on a new form with the total allowable amount carried over to Schedule C and subtracted from the "tentative" profit computed on the revised 1991 version of Schedule C. New Form 8829 will be used and is a 4 part form.

APEX in the Dumps

          Taxpayers will need to file Form 4868 in order to obtain the automatic filing extension for 1991 income tax returns. The IRS retracted its earlier announcement about a paperless filing under its planned Automated Processing of Extensions (APEX). Therefore, like in prior years you will need to get your information to us so that we can file a complete extension.


    1. Not keeping good records.
    2. Not being able to specifically identify stock you have sold.
    3. Not keeping track of your gains and losses throughout the year.
    4. Failing to sell short against the box.
    5. Running into trouble with the wash sale rules.
    6. Failing to consider bond swaps at year end.
    7. Failing to take the passive loss rules into account.
    8. Not considering home equity loans.
    9. Running into trouble with the kiddie tax.
    10. Failing to take advantage of the annual gift tax exclusion.
    11. Failing to take advantage of IRAs and Keoghs.


          Under legislation enacted November 15, 1991 individuals and married couples whose adjusted gross income is more than $75,000 can lose the estimated tax safe harbor of basing their 1992 estimated tax payments on their 1991 tax. The Act removed the safe harbor if-

    1. their AGI is $75,000 or more
    2. their current AGI exceeds last year`s AGI by more than $40,000
    3. they have paid or were subject to the estimated tax for the prior three years.


          In November we attended classes on a Real Estate Situation Update for the New York City and Accounting Solutions on the Macintosh.


          It is required by the Internal Revenue Code that you maintain books and records sufficient to support your deductions and income. We regularly are asked how long these records should be kept. You should keep most records at least three years after the date of filing a tax return. Some records such as 1) relating to purchase and sale of homes and additions to the cash of these homes, 2) IRA information, 3) Keogh information, 4) tax shelter and passive loss information should be kept forever. Information regarding the cost of securities should be retained until three years after the tax return where it is sold is reported or gifted.

          If you have any questions about these or any other matters, please call me.        

          All of us wish you and yours a very healthy and happy holiday season.