Tdui And Capital Gains

[IraqVet]

I currently have TDUI pending a decision and I was wondering if Capital Gaines that I earn from stocks will make me loose TDUI if I do get approved for it? ie does Capital Gaines count as income or gainful employment by the VA?

[Mikemmlj]

If you are a day trader with significant amount of money in stocks I wonder if they would view that as work?

[john999]

Mike

If you are just trading for yourself and taking gains and loses I don't think that would be earned income. I think if you were on VA compensation, as in TDIU, and you were day trading that would be a good case for a sanity hearing. Because I hired a money manager who rather drastically reallocated some of my assets I had some big capital gains of the long term type this year. These are passive gains. I am just hoping I am still in the 15% actual tax bracket, so I don't have to pay the capital gains tax. Capitalism is a wonderful thing for those who have some money to invest. I am in a low actual tax bracket because I have only SSD, pitiful civil service pension and investment income (interest, dividends and capital gains). Last year I paid no tax on qualified dividends and long term capital gains being below the 15% tax bracket. If you had say 20,000 in what is considered regular taxable income the income you got from dividends and capital gains would not even be taxed. You could earn $100,000 in long term capital gains and not pay a penny in tax. Ah, to be part of the 1%. This is why Warren Buffet says he is in a lower tax bracket than his secretary who works for her money while he just takes capital gains and loses and dividends. He made probably a couple of billion bucks last year and paid zero tax. Well, maybe he paid tax on his SSA, but I doubt it. I, a disabled vet on SSDI, paid tax on my OPM disability pension and on my SSDI because I had made some interest income and short term capital gains and because my OPM disability pension is fully taxable. I paid more tax than the founder of Microsoft, Bill Gates, because he lives on capital gains. He has 60 billion dollars and the manager of the local grocery store pays more tax than he does. He could afford to be a day trader, but he gets his kicks giving away money. He can't give it away fast enough.

John

John

[Chuck75]

One of the things that can cause problems is if you take a deduction for a home office used for investment purposes.

It's not cut and dried, but the IRS might just say that this is evidence of something other than "passive investment activity".

I rather doubt that the VA's way of looking at things would include this, but you never know.

[john999]

Chuck75

You just made a very good point. The IRS does look very closely at those who take home office deductions and all that goes with it. To take these kinds of deductions is a good way to get IRS on your Ass. The VA, SSA and IRS trade records (DEA also) so you should assume you are being looked at by all three as a disabled vet. You just don't want to draw attention of that kind to yourself if you are on TDIU. If you owned ten rental properties and just took the passive income as in rent that would be OK. However, if you started taking all kinds of deductions that go along with managing rental units then I think you could get heat from the VA. If you actively manage real estate or any other sorts of assets where you pay yourself a salary then you may have a problem.

Face it. When you say you are TDIU you are saying you can't work. You can try and get up to the line with limited below poverty income but if you cross the line by a few inches you can get whacked. Imagine how the public sees you. They see some vet trying to scam the system even if you are just trying to stay busy. I don't even take money from these surveys or medical studies for new drugs. I have not worked for money or wages since I got TDIU and it will stay that way until I die or get 20 years at P&T.

John

John

[Gastone]

IU Folks: Remember, any Earned Income "Wages & Salaries and including Self Employment 1099 income) is taken into consideration, 1st when you apply to IU and then again on a yearly basis as to the continuation of your IU award. Each yr the VA uses the current Single person Poverty level income amount from the most recent published US Census Data to determine "Gainful Employment Income Levels" as it pertains to initially qualify for IU and then on a yearly basis to determine if your IU award can continue. When you receive your IU Award, you also receive information regarding using the services of the VA Vocational Rehabilitation department to get future "Gainful Employment."

The VA use to send out Income Verification Letters to IU Vet yearly but m understanding is that has stopped. They are now relying on the IRS cross checks of 1040's and Vets self reporting. Supposedly each year on the anniversary date of your IU award, the Vet is supposed to self report. Just because a Vet had earned income in excess of the current $12,??? wouldn't necessarily cause his IU to stop. He must continue that income level for 12 consecutive months before the VA can jump ugly. Unless your talking big bucks, why chance it. Depending what your SC rate was before IU, you would have to earn upwards of 20 to 30K to make up for Tax Exempt SC $ & possible state property tax exemptions.

As for day trading, if your self-employed as I am, all legitimate business expenses reduce your taxable income. If your capable of earning 30-40K doing Sedentary work, maybe you shouldn't be receiving IU. That's a call for the IU rater. Play by the rules and you shouldn't have a problem.

Semper Fi

Gastone