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In case anyone was wondering about the outcome of this. I dredged up old documents (that had not yet been shredded somehow) and discovered they got the one that did not need repayment. Plus after some more research in other old files, I recalled the IRS was rejecting e-files for anyone who did not include the annual $500 repayment amount on their 1040. Since that did not affect these folks, that is confirmation of the non-repayable version of the credit.

Most of the time my clients will tell me that they have joint custody. And they usually do, in which case I know that it comes down to where the child spent the most nights for the dependency exemption. But with no clearly defined "custodial" parent, deciding who should give whom an 8332 is not always clear.

I renewed on 2/17/2025 and received my new card last week. Today, I received a letter telling me my status is inactive because I failed to renew As I type, I've been on hold waiting to speak to someone for just over an hour. Anyone else had a problem? Part of me wants to hang up and ignore the letter but I don't want to lose my license.

You are both amazing and I am still in a world of hurt. Here are the answers to Judy's questions: 1z = 44,173 2b = 0 3b = 194 4b = 0 5b = 129 7 = 175 8 = 0 Thank you both for taking all your precious time to help me out. It is not fair for her to pay back $3150

Loved and Miss Rita and her posts.

And how did you answer form 8867?

I assumed OP already made that determination; and return was filed, or to be filed without 8332 (So we don't have an 8332 and we go ahead and file electronically without one.) His question was: "Will the IRS hold up processing the return? Researching to see whether "Jack" has claimed Toddler?" Answer is, IRS does not track who custodial parent is from year to year. They are not going to hold up the return while they research "to see whether "Jack" has claimed Toddler". So even if the return is filed by non-custodial parent without 8332, the dependent will go to noncustodial parent if custodial parent has not claimed. I know many of us have had to file an appeal for custodial parent when ex beat them to the punch and claimed dependents without permission.

Yes, my point exactly. The OP has a client where NO Forms 8332 are used. This leaves his client at the mercy of her ex and open to a position that will take a lot of time working with the IRS to clear up/validate her return/receive her potential refund or confirm her balance due payment. OP seems to want a 8332 each year, alternating which person signs/provides. This is not the way either. Identify the custodial parent first. Your 2nd paragraph is a great solution. However, your 3rd paragraph shows why it's not a one & done. Maybe that's why OP wants to see an 8332 every year; however, it's even years only if his client is the noncustodial parent. No matter what, he needs to identify the custodial parent first. [me] "Did Jack give you an 8332?" might not be the next question to ask...

To clarify, if custodial parent signs 8332 and also claims the child, then IRS will disallow the claim by custodial parent and allow to noncustodial parent per the signed release. The noncustodial parent needs to be proactive and request the 8332 for not only the current year in part I, but also for future years in part II. The noncustodial parent also needs to be aware that custodial parent can revoke for future years by filing an additional 8332 and filling in part III. In that case, the custodial parent must attach a copy of the 8332 as proof of the revocation.

Exactly. But the OP seemed to want a 8332 each year for the one claiming the dependency that year -- when it's the custodial parent who's qualified to claim the child for all purposes but can give the dependency via 8332 -- in the OP's scenario, every other year. The dependency can go back and forth, but the custodial parent is an IRS qualification and not due to a divorce decree. So who gives (or refuses to give) the 8332 doesn't change (unless the child's living situation changes). If his client is the custodial parent, she will never receive an 8332. She can choose to give an 8332 in odd years -- in the OP's scenario. If she's the non-custodial parent, she can request an 8332 from the custodial parent, again per the OP in even years, and hope her ex doesn't also claim the child in even years.

But the custodial parent is not required by IRS to provide 8332; that is strictly between the two parties or legal system.

Love Rita! I was also fortunate to attend that amazing gathering and visit her again a couple of years later. Good times! Reminiscent of the camaraderie of the ATX group of users and providers in Maine. I'm guessing that not many mega software users do not have such fond memories.

About a week ago on my way to North Carolina, I stopped in at Rita's place in Crossville, TN. Yes - this is the same Rita that hosted our get-together 6-7 years ago. She looked good in her office perched on a hillside. She and I have been friends for a long time and live an hour plus away. And as I was leaving a pretty young lady came in to have her taxes done. Not a lot else to say, but for some of you that came to her place that year - I thought you like to know that she's still doing well, even though she doesn't post much. Just one of the great people who are on this board.

If your client is the custodial parent, per IRS rules, then she gives Form 8332 and does NOT receive it.

Not in the world I live in. Original cost certainly does not reflect DOD fmv of farm equipment.

So aren't you taking the same position as Fleischer v. Commissioner? Assignment of income to the Corp. Why doesn't the firm become RIA and follow the code?

You are filing an incomplete and inaccurate tax return. Filing form 8332 (or similar statement) for noncustodial parent is a requirement, not an option.

I stay out too, but sometimes you just have to say something. I was called in by one of our CPAs whose clients were setting up a trust to explain to them the tax effects. Talking with them, it was obvious they had no idea why they were doing this. They had limited assets, not much to protect, and had gone to one of those free dinners. I ended up telling them to write down a list of questions and go back to the advisor, warning them not to sign anything until they got answers. Another time a client came in with a dozen 1099Rs. His advisors were buying him annuities and cashing them out for new annuities every single month, costing him enormous fees. That one we just had to call the state insurance commissioner on.

I stay out of my client's investments, until last year, I broke my rule. Client is in a PTP for 30 days, loses $100 and the K-1 drops a few dollars of interest expense and depreciation on her. Add in my charge for Sch E page 2 and the 1256 straddle form and she lost a couple hundred bucks for a 30 day investment. I asked if she knew what the partnership did, she had no clue. So I gave her some questions to ask the advisor. She called me back and said he promised not to put her into those investments again. I never know where the line is to talk to my clients about their investments when I think they are being taken advantage of. I try to tell myself it is none of my business, but I care about my clients and it pi$$3s me off when I see these "professional advisors" putting their profits before my clients best interests. Tom Longview, TX

I had one client who had 30k in phantom income when she sold these because a large portion was currently taxable ordinary income, and the big capital losses had to be carried forward because she already had plenty of capital loss carryforwards.

I think the only factor that matters is the big commission stream earned by the broker. They have a huge conflict of interest. I explain to my clients that these partnerships were created because borrowing money from the banks is expensive and the operators didn't want to risk their own money, so they went public to get unsuspecting investors to buy in, and they pay brokers big fees to foist these investments on you.

Those are the exact figures and AGI I was getting too in order to come to that taxable portion of the SS, but I wasn't sure why mcb said the AGI was the $61, 531 and didn't look back to realize that was the orginal AGI so I didn't take the calcs any further. Thanks for continuing on with it.

I think there are two main factors. 1) A misguided (or potentially deceptive) effort to create the illusion of "diversification". In fact, these small investments have virtually no impact on performance because they are so small in relation to the size of the portfolio. Whether they gain or lose, they don't move the needle very much in the long term. But they generate lots of paperwork which conveys the illusion that they're working hard for the client. After all, my guy must really be looking out for me if these sophisticated investments require all this fancy reporting. 2) A commitment to stay focused on focusing on specific funding objectives. Client: "You said this strategy would be good for the college fund for our kids." Broker, "Oh, you must have misunderstood. I was talking about building the college fund for MY kids. These LP's/ MLP's/ REIT's pay awesome commissions!"

I'll never forget the look on my clients' faces when they bought 10 of these K1 investments, and I told them each K1 adds $75 to their tax prep bill, every year, and $150 when the each K1 is sold, so I hope they make a lot of money on these. They went back and told their broker who then called me. Of course these are prices from about 10 years ago.

Here's my guess at what is meant: Total income other than SS: 44671 Gross SS: 16860 Taxable SS: 13736 AGI (as originally stated): 58407 MAGI for Form 8962: 61531 (this assumes no tax-exempt interest/dividends) Without the year of marriage calculation, this would require a repayment of $3150 With the year of marriage calculation, the monthly contribution is $63 and repayment is $704 Form 8962 is filled out as follows with everything else blank: 1. 2 2a,3. 61531 4. 19720 (assuming other 48 states is checked) 5. 312% 7. 0.0630 8a. 3876 8b. 323 9. Yes 10. No Lines 12-22: 1256 1193 63 1130 1130 1194 24. 12430 25. 13134 26. 0 27. 704 28. 3150 29. 704 36. 1 63 01 11 ----------------------------------------------------------- If you need worksheet III for the spouse: 1. 1 2. 30766 3. 14580 4. 211% 5. 0.0244 6. 751 7. 63 8. 01 9. 11