How can I enter restricted stock units (RSU)?
Question: How can I enter Restricted Stock Units (RSU) into Family Law Software? Answer: Restricted stock units are promises by the employer to grant specified numbers of shares of stock to the employee in the future. Typically, restricted stock units are granted over time, following vesting periods. A restricted stock unit (RSU) may be forfeited […]
How can I enter an Employee Stock Purchase Plan?
There are two kinds of employee stock purchase plans: qualified and non-qualified. In qualified plans, the employee may purchase stock at a discount. When the employee sells the stock, some or all of the gain may be capital gain. Typically, some of the gain is also ordinary income. In nonqualified plans, the same is true, […]
How can I reflect options, RSUs, etc. on an after-tax (“tax-effected”) basis?
The best way to reflect the implications is to use the "Property After Tax" worksheet. This can be found on the Negotiate tab > Property After Tax or on Lawyer tab > More Reports > Marital Property Division on an After tax Basis. When you use this worksheet, please read all of the help available […]
How can I enter non-qualified annuities from an insurance company?
There are two aspects to annuities, the income aspect and the asset aspect. You can deal with each separately. Income Aspect You can reflect anticiated annuity income by entering it as a write-in line on Client Info > Income & Expense > Wage-Like Income. Specify the year the annuity will start paying as the “Start […]
How can I handle installment sales and notes receivable?
You can enter a note receivable, or an installment sale, as three investment assets. You can label them: 1. Note receivable return of capital. 2. Note receivable interest income. 3. Note receivable capital gain. Outside the software, figure the amortization of the note receivable or installment sale note, and the portion of each payment that […]
How do liquidations work in the software?
Whenever there is net cash outflow in a given year, the software automatically liquidates assets to cover the cash outflow. This topic will cover how the calculations work and how to track them through the software. How the Calculations Work When assets are liquidated, tax has to be paid. The way the software accounts for […]
How can I enter capital loss carryforwards?
You may choose one of two approaches: 1. View/Edit Taxes. One approach is to figure out how much of that carryforward will be able to be deducted each year, then open the report labeled “View/Edit Taxes” and enter that amount as a negative amount in the row for capital gains and losses. The "View/Edit Taxes" […]
How can I enter data from a K-1?
There are partnership K-1s (Form 1165) which are different than S Corporation K-1s (Form 1120). In both cases, typically, the most important numbers are on lines 1-3. You can enter ordinary income and guaranteed payments as Business income, and specify the type of business as partnership or S Corp as appropriate. You can enter rental […]
How can I show investment returns on a diversified portfolio with components of current income, appreciation, and capital gains?
Let’s illustrate this with an example. Suppose that there is $10,000 invested, and you expect 1% interest income, 2% dividend income, 0.5% capital gains income, and 4% appreciation. Here are the steps to take: 1. Divide the investment into three assets, one asset for each category of current income. In this case, we will make […]
How does the software show compounding of reinvested income?
The way the software shows compounding of reinvested income is as follows: At the end of the year, any positive after-tax cash (the last column on the Net After-Tax Cash Flow Spreadsheet) is moved into an account called the “Accumulated Savings” account. Our goal with this Accumulated Savings account is to mimic the performance of […]