Terry D EA

10 years ago??? Seems like yesterday. Wow! Yes, this has been the best team of resources that I have ever had since I started with ATX back in 1998. That was when the tiger roared when you opened the program. Some of the folks on the ATX Board have passed on or retired and I certainly hope retired. KC Jenkins was one of the best. Janitor Bob from Ohio was a hoot too. William Tasker was the best support guy around. Of course, I am dating myself here but those were the good days. I am a member on a few other boards and don't browse them hardly at all. The Drake board takes too many hoops to log on. NAEA is ok and there is one fellow there that is a walking talking IRS code book. He is a professor, retired IRS agent that wore many hats inside the IRS. He is very helpful and pleasant to work with. So, yes folks on this board has saved me too many times to mention. Judy, you and I go back quite a few years. I'm sure there are others too that I just can't remember right now. It is great to have all as colleagues.

I just submitted a ticket to Drake on this. The "See Statement 1" prints over top of the spouse's signature wording on the form 1040. When printed looks pretty bad and can't really be read at all. Second time this year I've had to report something like this to get it fixed. If you include a late election form 2553 with a 1120S form, The required wording does not print at the top of the form. The support agent at Drake agreed it looked bad and unprofessional. However, the programmers said they couldn't change it cause it would be out of the print range. Well, I used Pro Series last year for some 1120S returns that included a late election and it didn't print that way. As I said, I love Drake and have no plans on changing, they just need to clean this up a bit.

Thanks Judy, sounds good to me and I really don't have time to do all the switching.

I did and am now a bit more comfortable with the return. I must have had this battle last year. When I opened the screen 3 input, there were fields flagged which triggered my memory. Because of the fines and penalties the IRS can and will apply to this type of return, one cannot afford to make a mistake. Years ago, I got this guy out of a 50K penalty due to his previous preparer using the wrong form. Best news on that was the IRS themselves directed the taxpayer to use the wrong form on the original letter establishing the EIN when the trust was created. This return has to be mailed. I refuse to have the client mail the return close to the April 15th due date and must be sent certified mail with a return receipt to prove the post mark. We went down that rabbit hole one year as well. I hate having people pay penalties and interest and then have to wait for 6 months to a year to get it back. Only good thing the IRS will pay interest. But, what they pay in interest is nothing close to what they charge.

Judy, I did briefly see that but took a minute to look at it again. In my situation it is the Taxpayer that is in rehabilitation and not the spouse. Would it still work. The check box states "Taxpayer is signing for the spouse and a statement is required". Should I make the spouse the taxpayer and the taxpayer the spouse?

Just found part of my answer. In Drake, you have to use the screen 3 for income deductions and payments to enter the trust expense information. This kinda blows my mind as the 5227, 1041-A and 1041 are all processed through the 1041 package. So, an input in the screen three flows to both the 1041, 1041-A and 5227.

I think the phaseout you mention is for earlier model years. The 2023 Model 3 qualifies for 2023. Some models will qualify for 2024.

Margaret, in the past you have prepared a CRUT or two. Wondering if you are still doing so. I am using Drake and found out yesterday the form 5227 has not been approved and has an anticipated date of approval of April 8th. Not sure which software program you are using but wondering if you are seeing the same thing. I love Drake, and hate to say this, but it looks like they've got this form screwed up. The K-1 for the trustee in this case, was not generating, and one of the distribution screens had to be filled out to get the program to do so. There is currently no place to enter the trust expenses. Items like accounting, legal or account maintenance fees. It is working entirely different than last year. Kinda scares me a bit. Judy, I thought you prepared some CRUTs as well and you may already know this but thought I would include you anyway as I know you use Drake.

Taxpayer is in a rehab in their home state. Taxpayer's spouse moved to another state a significant distance away. They are not separated nor are they intending on doing so and are MFJ. Can the spouse sign the return for the taxpayer? Would the spouse need to have a POA in order to do so. I've known these folks for 20 years and have prepared their returns all of those 20 years. Don't know if that even matters.

I am dealing with this very thing for real. Well, sort of. I am not well versed on gambling taxation. My client has 1099G gross winnings totaling 42K. He has receipts for buy-in wagers for 43K. Can he deduct the 42K on Sch A? This client states they are a professional gambler. However, the IRS would disagree because he has another job that nets him 200K each year and doesn't spend the 40hrs per week. So, I am taking the position he is an amateur. I'm just confused on the deduction above as is seems to easy.

Found my answer. SC is not required as the estate is a non-resident estate from NC and had no income from any SC sources. I'm using Drake and the instructions for the federal 1041 are pretty clear at using the fiduciaries address. You can tell the program the estate is a non-resident estate but, in this situation, that does not apply. After removing the data from the SC screens, the SC 1041 is gone. I am not sure at this time if the estate has been closed to mark the 1041 as final. Personally, I wouldn't see why it wouldn't be as the only asset was the residence and it has been sold. No income from anywhere.

The blurb below answers my position regarding a capital expense for the septic system. Only thing I found different is the possibility of 20 year life for septic tanks. The proposed regulations require capitalization of amounts paid to acquire, produce, or improve tangible real and personal property, including amounts paid to facilitate (closing costs) the acquisition of tangible property. Amounts paid to repair and main property and equipment are deductible if those amounts are not required to be capitalized under §1.263(a)-3, which states in part that any amounts paid for permanent improvements or betterments made to increase the value of such property must be capitalized. Under the proposed regulations these improvement standards are applied to the building itself and individually to its structural components such as heating and ventilation, plumbing, electrical, fire protection and security systems and escalators and elevators. Also the new regulations will allow the dispositions of component parts of a building resulting in the recognition of a gain or loss upon the retirement of such component.

My client is the administrator of their mother's estate. Client's residence is in SC. The decedent's residence was in NC. When completing the 1041, (sale of the house only), the program is generating a NC 407 and SC 1041. The sale took place in NC so I get that. Is the SC 1041 required as well? Just want to confirm as I think so due to having to indicate whether it is a resident or non-resident estate for SC.

I agree but isn't it still considered a capital expense that requires depreciation?

Thanks everyone for the replies. I will pass this by the client but am kinda stuck on the 27.5 life. Client doesn't really need the bonus depreciation either. This must have been a small system as the receipt is for $3200.00. I though it should be way more than that but then again, I have always been on a city system.