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UPDATE. I think I have it all in place, now. I'll sleep on it and proofread tomorrow. I did have the 1250 gain flowing correctly. It flowed from the K-1 to a "statement" that is numbered sequentially depending on what's on each return, but is clearly labeled as Schedule D Unrecaptured Section 1250 Gain. The number I was afraid I was missing is indeed on Line 5. It gets reduced by a small loss, so by the time it shows up on Schedule D Line 19, it's a lower number than I was looking for. And, I was shaky enough on the flow to really doubt myself, so I really benefited from the detailed explanations you provided. I know I'd probably make some refinements if I had the corporate tax returns, but I think the wife won't deal with that firm any more. (I did find a revision on the redone CT corporate return that changed the taxpayer's PE payment for their joint CT return from what the CPA had on the original CT-K1.) I did track ALL the K-1s from the father's gift/father's basis to the dissolution of the company. Thank you, thank you, thank you.

The instructions make it sound like you don't have to complete the withdrawal, before you file the return. The IRS can waive part or all of this tax if you can show that any shortfall in the amount of distributions was due to reasonable error and you are taking reasonable steps to remedy the shortfall. If you believe you qualify for this relief, attach a statement of explanation and file Form 5329

Evan, in June 2019, I had a client to FINALLY take withdrawals to cover RMDs for 2017 and 2018. (They blamed the custodian, but come on, I told you two years running you had to take RMDs, the custodian probably gave you paperwork you didn't read, etc.) I completed Part IX of 2018 Form 5329 and attached a statement to it when he made the withdrawals in June 2019 (the due dates for both RMDs were in 2018: 4/01/18 and 12/31/18), and he mailed the Form 5329 by itself. I don't know the answer to your question, but I'd go on about my business and complete the 2018 Form 1040 and deal with the waiver request when the RMD withdrawal occurs.

The problem is that the definition of a trade or business is not based on rules & regulations but on an aggregation of administration guidance and a number of court cases, some of which happened decades ago. The peace of mind that you are looking is not currently available ! Perhaps clarity on this issue will evolve over the next ten years.

One of the reasons I left and went to Drake. Also what was once included in the price of the package is now being pieced out (payroll module) and I think what really nailed it for me was the last time I renewed I was given a very special gift, the previous years books for which I threw away because I had already received them when I renewed the previous year. I was once a fan and defended the company, but I am so glad I left and went with Drake. I know exactly what to expect to pay from year to year.

I am amazed at the errors the custodians make, and nothing ever happens to them. IRS is more interested in harassing the taxpayers with penalties of the sort than to do anything to Fortune 500 custodians. Custodians make all sorts of errors. 1099-Rs that are late. 1099-Rs that are wrong. Failure to distribute RMDs. Refusal to correct income documents that are wrong even when the error is pointed out. Some of them claim they have no responsibility to distribute RMDs because "the individual may have other retirement accounts with other custodians and might wish to skew the distribution from one account to the other." Extremely remote excuse. To reflect on the original question, if the error is easily shown to be of the custodian, they could be threatened with a civil suit for the amount of the penalty. That might get their attention, because a favorable ruling in this case might be taken as a precedent, so the payment of a few hundred dollars of penalty might be a precursor of substantial amounts of money. I just hate to see them get off scott-free, when the taxpayer has to unjustly suffer.

Thank you! You are my new best friend. Your detailed and thorough explanations are a big help, as are you links. (Actually most of my best friends are on this site, including some no longer posting.) The wife does have a great POA in place that specifically discusses tax matters and signing returns and other good stuff and used to have a comfortable relationship with the CPA firm. And, luckily, she did have the K-1s from before my time. Now, the CPA firm seems to be ignoring her questions, requests for copies of the S-corp returns, etc. MIL seems to be having similar problems now that her husband passed away.

Does Ruby actually schedule appointments if clients want it or do they just route calls? I'm wondering if anyone on here uses an office sharing site. A CPA in my building has decided to join one and it sounds interesting. He'll work from home all off-season but pay $90 per month for access to their conference rooms and as a mailing address. Then during tax season he'll rent a full blown office within their space to meet with clients. He expects it all to cost about $2,400 per year. He works odd hours (he'll come in at noon and leave at 10pm) and many allow that. He can cut the cost further by just using a desk within their larger space with a locked filing cabinet. I'm considering moving in the next year. Considering all options.

I am rejuvenating this topic now that some time has passed since the latest discussion in the height of tax season. I know that I risk being accused of beating a dead horse. However, I feel that my horse is not dead and it is keeping me up at night. Likely there are others who are working on extended returns and struggling with the question: "Does this rental rise to to the level of a Qualified business under section 162?". I have read countless articles and discussions on this topic. Reading through the IRS reg is really no help. It pretty much says that is is not going to give that "bright line rule" that so many are seeking. Indeed Facts and Circumstances. I don't know that I trust myself to interpret the facts and circumstances on my own. I know the whole things with the Safe Harbor. I don't know that any of mine would qualify under that, but I do have some that I truly believer are qualifying businesses. We know that people have been stewing on this for many months now. I have taken a number of webinars seeking some specifics. Pretty much what I get is lots of details about SSTB and income limits but when it come to rentals, they all say, "Your rental could qualify if it rises to the level of a trade or business. " No specifics! Do any of you have any recent articles or discussions that I can read that could give me some piece of mind that i am on the right track? It would be great if some of you would share your experiences: which rentals you determined do qualify and which you decided do not and your reasoning. Thank you so much for your help! I really appreciate any input you would offer Laura

THANKS!!