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I just fired her via email. I referred her to a very good tax rep guy who likes to gamble himself, and apologized profusely for my incompetence in not being able to adequately represent her with so much at stake...blah, blah, blah. She came in late, she lied about the gambling and knew she should have told me, and she took the advice of "the casino people" without mentioning a thing to me. What else is she hiding? She's a disaster waiting to happen and I kissed her goodbye, nicely. But, I am pi$$ed. I could handle a smaller at-risk amount, but when the wagers and wins are over a half a million dollars, that's a bit much. Cripes, she only makes salary of around $80k per year.

Good move at this time of year, well, anytime of year is good for firing a client who cannot tell he truth. You have your suspicions and used good judgement. Rest easy now!!

I watched the little video and made four macros to fill out extensions (fed/Mass), PIN screen, and EF screen. Including watching the 2.5 minute video, it took me about 4 minutes total. They are THAT simple. *4868>X>>Y is, (if I recall correctly) the macro for extensions. Goes to screen for 4868, puts an "X" in the 4868 box, two tabs to the "Y/N" box to make it yes. Boom, you're done.

Given the amounts, I'd venture to guess that she is a gambling addict. She's lost over 25% of her gross income, according to these win/loss statements. I feel sorry for her.

THAT"S COOOOOOLLL!!!

Just this week I had a client that sold their personal home that became a rental for the past years, in my head they qualified for the exclusion, but when I put the months on paper they missed the exclusion by 4 months. It's very simple to do.

B: Your client goes to the casino. She gave you "some" of her W-2G's, but not all of them. What did you do with the first batch when you prepped her 2015 return? Accept that her losses were the same as the winnings? Sure, because she did. Slots are for losers. She lost these additional W2G's as well. The Casino can provide more detailed reports if you need them. Anyone moving $500k thru the machines has a personal rep at the Casino that will provide assistance.

B; Your client isn't under audit. Only a CP-2000. Prep the 1040x, with the Sch A. and attach the Win/Loss statement. If the IRS wants more, let them ask for it. Don't worry about proving daily wagering losses. That is all there ever was...

Was this the first RMD (i.e. turned 70 1/2 during 2016)? If so they had until 4/1/17 to take the 2016 RMD. If not, the distribution gets reported on 2017 return along with 2017 RMD. And, I agree with jklcpa and filing 5329. Grace

That would be a good trick and it would be interesting to see how he would pull it off. I hope you are not preparing his return the way HE wants you to. I would insist on preparing the return by the tax code and not the client's convoluted understanding. Be careful, and check the circular 231 code of ethics. You know what is right and wrong here. As I see it, only one way to prepare the return. He doesn't qualify for the exclusion and that is that. I wouldn't concern myself with whether the service closely checks this or not. I just would not be part of the gamble. Just my 2.5 cents worth.

Don't forget....529's can be used for R & B.

I'm very impressed!

HVAC is my other job. I deal with this a lot.

You are awesome. Thanks so much!

You need the manufacturers certification. If it qualifies the condenser is 300, boiler or furnace is 150. The cert should tell you if he got a advanced main air circulating fan. If he did that is worth 50.00. https://energystar.zendesk.com/hc/en-us/articles/211437638-What-is-a-Manufacturer-s-Certification-Statement-Where-can-I-find-it-

You really can't tell from the Casino win/loss statements unless its slots. Table games not every play gets recorded and its easy to "game" the system. An ex-client of mine comes in with a few thousand of winnings and hundreds of thousands of losses. He was a school teacher. Here is how he does it. He has a line of credit established at many different casino's. So lets say he goes down for the weekend and borrows $2000 from casino A, He doesn't settle up till the following week when he goes to casino B, borrows $2000 and pays back casino A. Casino A records him as losing $2000 on the first week since he left without paying back his line. Now the 3rd week he goes to casino C and borrows to payback casino B. This was many years ago and I doubt it would work now because the casino's share information. It was hilarious to see someone making about $90k a year come in with $5-6k of winnings and $200k of losses.

Can you prorate the exclusion just because you wanted to move? Or, do you have to meet one of the unforeseen circumstances to prorate?

This happened to me about 3 years ago. A taxpayer left a few 3K W-2gs when I prepared his taxes. He got a letter from the IRS and he gave me the win/loss statement from the casino. This is what I did: I prepared 1040X and report all W-2g on page 1 then I went to schedule A and reported that same amount and I sent the IRS a letter from the tax payer stating: Dearisimo IRS, In response to your CP2000 letter dated September 20, 2030, enclosed please find: 1.- Form 1040X for year 2028 showing all casino winnings 2.- Win/loss statement from the casino which shows that during 2028, my losses were bigger than my winnings. In support of my 1040X, let me state that I do not play table games, I only play slot machines and those computerized machines keep accurate records of each time I make a wager and I press the spin button. If you need additional information, please do not hesitate to contact me at the address above. Sincerely, Mr. Pacun Gambler We never heard from the IRS again. Do think the IRS will challenge me in court and say.... but you could have left your card out and win big money so your statements will be inaccurate? Then the judge will look at the statistics and see that the casino always win.

Correct. The Dad was responsible, so no gift.

Which do NOT include the loan taken out by the dad and in his name - correct? FBO the son's education, but not the son's loan - just the son's college.

Too late to edit! Supposed to be Massachusetts/Mass. Neither posterior nor donkey was intended!

Terry, they do roll over.

She can only use the losses incurred on the same day of the winnings reported on the W-2G. Losses go on Schedule A, not subject to 2% and not greater than the winnings. If there is not enough to itemize, then the deduction for losses is lost. (pun NOT intended) Daily losses only. Not weekly, monthly, or annual. Most likely, the CP2000 is correct.

"All my Ass estimated payment coupons" I'm sure this is a typo and you ran out of time to edit the post. Maybe Judy can fix it for you. Just sayin!!

Judy, I agree with you if those conditions of non-qualified use apply. The original post didn't give any reasons why the taxpayer moved. I think Jack I both assumed he just relocated which if he did, then no exclusion. Hopefully Christian will give us more information. I still stand against preparing the return the way the client wants. I know Christian didn't say that specifically but it seemed like a possibility from his reply. Hence, my comments.

This person might also qualify for the reduced exclusion if his move to VA was work-related or can qualify for one of the other exceptions that would allow proration of the exclusion.

Gift $$$ = Down payment money and any money paid on loans that are the responsibility of the son. WAY OVERTHINKING THIS ONE.

I would report the shortfall on 5329 and not pay the penalty. Request abatement. If this is the first year of the RMD the case is stronger, plus looking at the calendar for December 2016 and Jan 2017, 12/31 fell on a Sat, 1/1 was Sun making 1/2 a legal holiday where all the financial institutions were closed, so if he called too late in that last week of December then it is plausible that it wasn't transacted until 1/3/17...at least that is a somewhat reasonable explanation for what could have happened.

Yes, the five year look back starts on 7/15/16 so you are correct that in this case would go back to 7/15/11. You may count the number of days of personal use from 7/15/11 coming forward to when he moved into the new home and divide that by 1825 to arrive at the percentage of the $250K he is allowed, or you may use whole months divided by 60 months. He would need 730 days or 24 months during the look back period in order to utilize the full exclusion, and he must not have excluded any gain from another residence during that period.

I think the way it is worded is that it has to have been his principal residence for two of the last five years. If he filed a resident Virginia return for 2013, 2014, 2015, and 2016 it would have only been his primary residence for one of the last five years. I think. If he filed part-year for 2013, then maybe but i am still doubtful. I don't think that 1 1/2 is the same as two.

Such cases don't know, understand, or care about any of the regulations and/or obstacles mentioned. He's interested in making money, period! Everything else (including you) is just white noise to him. They will present you with new facts as you proceed (sometimes invalidating what you've just done) depending on what they consider your "need to know." It would be a good idea to suggest H&R Block, say they have a large staff, you don't, and it's too complicated to get involved with now or later. In the event you do go through with it; I predict a bitter fight about your fee.

It appears that 8615 is still required for the twins. For #2, they are required to file because unearned income is greater than $1,050.

This may be a bit of a stretch, but I would seriously consider filing a 3115 for each corporation. For the corporation with the increased expense, they could deduct it in the current year. For the corporation with the increased income you have the option of spreading the increase over 4 years. You would have evaluate this approach versus amending all those years.