Do extensions affect the upcoming rebates?
If I file my 1040 in Oct, does this mean no rebate?
If I do get a rebate is it taxable?
Is 2008 the year where there is ZERO capital gains?
If so, does this mean that if I sell some highly appreciated stock (held 15-17 years) before 12/31/08 that I will NOT have to pay ANY cap gains?
The rebates, which are supposed to be sent to anyone who files a 2007 1040 by October 15, 2008, are similar to rebates we had a few years ago.
While not technically taxable as income; they will decrease the refund or increase the tax due with the 2008 1040. It's pretty much the same effect as having $600 less withheld from your paycheck for the year or reducing your 1040-ES payment by $600. If IRS sends you a check for that amount, it will just mean that your refund next tax season will be $600 lower than it would have been. It's a desperate plan to give people part of their next year's tax refund a year early in order to give them some spending money to goose the economy now.
People who don't file their 2007 1040s by 10/15/08 will actually be able to have their rebate amounts applied against their 2008 tax return.
The special 0% Federal tax rate for some long term capital gains does start in 2008. It's not the entire gain that is subject to the 0% rate; just the portions that would have been taxed at 10% and 15%. Check out the bottom of my web page on 2008 tax rates.
I hope this isn't too confusing.