I'm POA for my mom and she has dementia so cannot file for herself. She has:
Social Security net benefits: $10,700
Pension (1099-R, code "7"): $5,200
LT Cap gain: $2,200
LT Cap loss carryover: $22,000
She lives in Oregon
I know if I go through the paperwork she owes nothing but that's because of the standard deduction and cap-loss carryover. But her total income above adds to $18,100
Does she need to file?
Thank you!
No, as long as you filed the year she incurred the loss, she needn't file when no tax is due.
[Edited 03/05/2023 | 8:08 PST]
@Dgyp
I can’t believe I missed this… she also has a 1099-R with distribution code/box 7 “Q” for her Roth IRA of $58,000. In my head I disregard it because I know Roth’s aren’t taxable. It’s a fully qualified distribution since she’s 87 and has had the Roth for well over 5 years.
and yes, the LT cap loss was filed a couple of years ago and has been rolling into the next year for at least 2 years.
does that change the answer? I’m just a bit nervous about it.
No, that doesn't change the answer. As you mentioned, a 1099-R with code 7 and box Q is not taxable income.
The IRS considers Gross Income as:
"Gross income.
Gross income is all income you receive in the form of money, goods, property, and services that isn't exempt from tax. If you are married and live with your spouse in a community property state, half of any income defined by state law as community income may be considered yours. For a list of community property states, see Community property states under Married Filing Separately, later."
The 1099-R is exempt from Tax and wouldn't be added to the total income.