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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

I have never seen so many small, meaningless and unprofitable K1s in my life as I have seen this year. Almost everyone with investments has two or three of them.

Is your computer on a battery backup surge suppressor?

Don't worry about the name at this point. I can get to within $1 of your taxable SS, but playing with the numbers, I can't get to the AGI you have. I get close to your AGI number if that were on line 9, but with that taxable SS not being the full 85% of the gross benefits, I get a lower AGI than you provided. I would need each of the lines 1z, 2b, 3b, 4b, 5b, 7 & 8 from the 1040, if there is any tax exempt interest income, and whatever might be on Sch 1 to get the correct numbers flowing to the MAGI worksheet. If you want to post that, or send privately by PM, email, or call me on the phone, I can send you my contact info. I am still willing to work through this if you think I can still help in some way.

I just got off the phone with the IRS. A refund check will be issued in about 4 weeks. After my initial call, I spent about 30 minutes waiting for a call back. It took about 10 minutes to verify my client and my own identity. It took another 10 minutes for the agent to go into another system and schedule the refund check. He didn't know why the scheduled Direct Deposit never happened.

I had to uninstall and re-install my ATX software. Not sure if the thunderstorm is exactly why, but I am blaming the thunderstorm. So far I have only had to deal with 2023 and 2024. Haven't tried to open anything older yet. Kind of a pain. Has anyone else had trouble lately?

Total AGI 61531 Gross SS 16860 Taxable SS 13736 The only other thing is that I cannot get her name on the top of the 8962 without reversing the names in the setup.

If you want, I will plug in the new income numbers. If you give me: total AGI with the taxable SSA included, gross SSA, and taxable portion of the SSA I should be able to get the worksheets to show the amounts on their proper respective lines. Nothing else changed?

Marilyn, I'm surprised that ATX doesn't calculate the MAGI for you. If you give me revised figures I can have a new result for you in a couple of minutes. At least you will know what to aim for. The other thing I realize is that you are getting a variety of error messages because you are deleting the 8962 with each reject instead of trying to use the rejected one and fixing the error it generated. There should be "2" as the family size on line 1 of the 8962, but on the spouse's alternate worksheet the family size should be "1". You shouldn't have any entries anywhere for the husband except how the joint MAGI and joint poverty level affects the calculations in the first section at the top of the 8962 and where the joint MAGI is divided in 1/2 on the spouse's worksheet. Are you willing to try again?

The original MAGI that I gave you did not include the addback of the portion of SS that was not included in taxable income. Who knew? Would it be advisable to paper file this return and put it to rest?

https://www.journalofaccountancy.com/issues/2019/sep/tax-claim-child-dependency-by-noncustodial-parents/

"Dianne" comes to me to have her taxes filed. "Jack claims Toddler in odd years, and I claim him in even years." [me] "Did Jack give you an 8332?" [Dianne] "Oh no. We sorta just agreed to that." So we don't have an 8332 and we go ahead and file electronically without one. My question: Will the IRS hold up processing the return? Researching to see whether "Jack" has claimed Toddler?

I charge $$ for answering these letters. Over 50% of IRS letters are totally wrong or wrong in part. I do charge, but somehow I can't seem to charge enough. Clients don't understand why it takes so long to write a response, plus produce statistical information which is almost always needed. And the clients aren't really anxious - they feel if they just file their taxes correctly once a year, and do nothing wrong, that should be enough.

Unless you are changing or adding items of income that are affecting MAGI, I really don't understand how the spouse's monthly contribution amount keeps changing. That makes no sense to me.

I hope you have been paid. And I hope you will send this client packing! Any client who makes my fee dependent on their tax outcomes is not someone I want to deal with. If you let them get away with making that statement, they will make it again the next time they don't like the outcome. Tom Longview, TX

They have substantial losses which will shield them from federal and state income tax for years. The tax due was SE tax for which they have no protection. After deducting 2024 expenses along with depreciation they owed that. She came in today and had reconsidered her objections.

We rejected again. We redid all of the calculations and came up with a slightly different number of $55; so tried that. If this fails, I have no idea what to do. I do not have an option to change the 8962 to her name without changing all of the main information entry. It will not allow me to override. This has been the horror story of 2024. I hope I never have another one of these.

My other thought is to make sure that the 8962 entry area indicates "S" that it is only for the spouse and that whatever entries are there are all for the spouse (if it requires entries for her name, SSN, dates of coverage, etc) so that nothing indicated relates to the taxpayer. That would be something easy to overlook if you've deleted the input and reentered multiple times. Sorry that I can't see your input to help directly with whatever ATX thinks it needs to make this work.

That is the exact same rejection error that Jason, the OP of this topic, had started with. Make sure that ATX produces these results: 8962, line 1 is a "2" box 9 is "yes" box 10 is "no" page 2, part V - should be blank for the taxpayer and filled in only for the spouse. In other words, make sure that ATX isn't calculating any alternative calculations for the taxpayer, it should be creating those only for the spouse. It sounds like somewhere along the way you have made an entry for the taxpayer to be included in the alternative calcs for ATX to be producing that error. How much of the alternative worksheets does ATX require you to manually enter, or is it producing my results based on very limited input from you?