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Well, it clearly wasn’t bar codes. Now we have advanced to QR codes. And we have to use QR codes to set up MFA just so we can log into our software. That’s clearly the work of the devil.

Where did you hear that? Who said that? Did it have to do with a declared disaster area? Please give details if you're asking a question!

What Randall said. Make sure you have the bursar's statement, so you can see what was paid and when, along with the tuition and the scholarship(s). I've seen a couple schools include their statements right on the back or bottom of Form 1098-T, which is so very helpful. But most of the time, you need the student to login to their account and print out the CALENDAR year bursar's statement.

I don't trust the Forms. I think the tuition box is the amount of tuition charged. But the scholarship amount could be for more than just tuition, that is, room and board. You'll have to dig deeper.

I've been hearing about some bizarre schedule where all estimates can be paid on November 7th. So....what is going on? Can it be this simple for 2025?? Date of Payment #1________________ Date of Payment #2________________ Date of Payment #3________________ Date of Payment #4________________

The amount exceeding tuition is ordinary income on the student's return.

Yes Miss Sara, that is exactly what has been happening.

A client's dependent who is in college has received his 1098-T which shows his scholarship and grant payments handily exceed his tuition. Since the tuition is fully covered my question here is as follows. Is the amount exceeding the tuition reported as income on his parents return ? Clearly the college got him some extra funds for something.

These PTPs are notorious for showing losses year after year yet making nice distributions so investors think they are making money. It's return of capital, lowering basis and adding to the surprise gains when they eventually sell. At least they can take those suspended losses at the end, mitigating the tax bite a bit. Always check that the K-1 is in the taxpayer's Soc Sec number and not in an IRA, in which case you don't have to do anything except alert the client that the custodian may have some UBI reporting.

Good advice from all. I have told him to expect anything. And, yes, his AGI was $750,000 this year.

Some may remember back in the 70's when bar codes first came out that many thought it was "The Devils Work". The precursor to the mark of the beast. Some thought it was the mark. Crazy times back then, but we all know that many times this shit comes true.

Frog: you CAN warn him that the sale might not be all capital gain rate, that some could be at his ordinary income tax rate. Was he near the top of a bracket last year? And, that the sale involves more time, more calculations, often more forms, so your fee will be a LOT higher. Tell him to bring you every single page and every single piece of paper and every single mailing for year end.

"We had the local politician over for dinner. The louder he talked of his honor, the faster we counted our spoons."

I love the "red flag" quote.

I could get into this discussion because I prepare Partnership returns; but I won't. I believe we are talking here about the multitude of small limited partnerships that so many of our clients are coming in with this year. Many of them were late and I had more than one amendment because of it. When I prepare a Partnership, I have to have it filed by March 15 or file for an extension. I get my K-1s out on time for my active partners. Why is it that brokers seem to have forever to deliver?

Thanks for the responses. The sale will not occur until 2025, so I will not be able to advise about this until we have the information of which you speak. Interesting...

Yes, there is usually a separate chart of state adjustments (since these are sold all over). Forgot about that; thanks, @Abby Normal. Lucky me, as I haven't seen one of these in a while. I think everyone they got foisted off onto... umm, I mean sold to, yeah, sold to... either dumped them or was elderly and has passed on. I also pointed out how much more the tax prep bill was and compared that to the distributions they got (usually not particularly favorable). Not investment advice! Just cash flow analysis.

If the contribution can't be recharacterized to the next year (or even the year after), then he needs to withdraw it. Pronto. Save for retirement. Don't save for your retirement if you make more than X. Save it this way. Make and honest mistake and we'll punish you while being cagey about how to fix the problem. You put your right foot in, you take your right foot out, you put your right foot in, and you shake it all about.

When these K1s are sold, either partially or completely, the broker will normally show the initial investment cost, but the K1 will have attachments showing both a basis adjustment and an ordinary income component of the gain or loss. The basis adjustment increases the gain and the ordinary income component will decrease the gain on the Sch D and also be reported on the 4797 (as Catherine already noted). On 8949, you will use adjustment codes BO to net the two adjustments so the Sch D gain is correct. You can do this even if you're reporting totals from the 1099-B. And the state gain or loss is almost always different, so you'll need an adjustment on the state return, if there's a state income tax. When I see these investments by a client, I always warn them that their tax prep bill will be higher every year that they own them and a lot higher when the sell them.

For the most part, the articles there are superfluous; most of the giggles come from the headline. Love the barcode idea! (Wasn't it Heinlein who claimed that an "honest" politician is one who stays bought by the initial buyer?)

Except Alaska. My contribution to the discussion here is in the sig area.

Upon sale, the partnership *usually* provides a worksheet for reporting the sale. This is separate from the K-1 (although sometimes appended) and also separate from any brokerage Schedule D-style reporting. In the worksheet, information is provided for determining LTCG, Ordinary Income, Form 4797 sale of business property items, and more. Look for that.

Thank you Mr. Normal. This is a PTP. Taxpayer paid $175,000 for it, and has been reporting income for 5 years, and has been also receiving distributions which are not necessarily equal to the income. Will sell in 2025 for $200,000. If there is no need to track basis, then is it as simple as reporting $25,000 LTCG? Can't find this in IRS Sch D instructions, and not sure I would understand it anyway.

If this is a PTP (Publicly Traded Partnership), you don't need to track basis. But if this a regular limited partnership, yes, basis is increased by taxable and nontaxable income and decreased by deductible and nondeductible expenses/losses. So basically everything in and out. If you didn't allocate basis to passive losses, there'd be no basis for deducting those losses later.

The formula for partnership basis calls for a decrease if there are nondeductible expenses. One example is 50% nondeductible meals. However, in a "limited" partnership, nondeductible losses could include losses disallowed because they are passive. Question: Are passive losses required to be deducted from basis according to the formula? I don't see why they wouldn't but thought I would ask...