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Ha-ha! Girl, I just hate to argue with you about tax because you're always just so...so... (what's the word?) conscientiously right! And I have to give you credit 'cause those thinned-out Tennessee filers surely can't be as easily replaced as Lion's high-rollers from New York. So anyhow, keep that integrity intact; meanwhile I'm gonna see if I can scratch out a few dollars from cabin-flippers near Dogpatch. If it doesn't work out, stop by sometime on visitin' day. Best regards, BB

It skeered me when I saw I got quoted again, Buddy. I thought I had started a big ole war in our family here. Nope, I'm not always right, but I've got three kids watching me, and I try not to confuse them. Best regards to you, too, my friend, and thank you. You are so much fun. Your kinds words and sense of humor mean a lot to me. Just tell your cabin-flippers their danged SS checks are gonna be slim, and Rita warned em. I ain't even mad when people shoot themselves in the foot. They'll be posting those memes on The Facebooks asking, "How come Congress expects me to live off $12,000?!" Cause you been swearing you do, bless your heart...

Can he spell "CAT"?

There's no need to change the designation from passive to active. Keep it as "passive" if that is the client's actual participation. Even though your client is passive, he still has a share in the S corp's trade or business income that is flowing through to him as reported on his K-1, and he may have the QBI deduction depending on his taxable income. Enter everything as it is reported on his K-1. The specified service trade or business designation (SSTB) means that and the QBI deduction has additional limitations. If the taxable income is at or below $315,000 for joint filers ($157,500 all others), then the SSTB limitation on QBI deduction does not apply. Above that, the limitation on QBI begins to phase in between $315,000-$415,000 for joint filers and 157,500-207,500 for others.

Thanks, I will likely amend HIS filed return to include her unfiled information as Lion mentioned. I just have to get all of his documents now. For the college son and 529 distributions, it is a real challenge getting actual documents for 8867 proving dependency. He has lived in an apartment year round so gets no mail at parent's address. School info does not come to parent, privacy stuff you know. I will have to rely solely on a phrase from the divorce decree that she gets to claim one son for tax purposes, ex claims the other. I HATE 8867!

Nah. No war. Everything's copacetic. And you are right ("to thine ownself be true" - who was it said that? Howdy Doody? Hamlet?). As you said; it's important to keep on keepin' the kids straight. Mine are gone now--only IRS left to confuse. I'll mention the SE (and the warner) but it's like trying to sell overcoats at a July rummage sale - SE is "later", this is "now". Anyway I'm keepin' my fingers crossed -- don't want to break a winning streak. Friend, Bart

Perhaps they are not getting away with anything. Those fringes that don't qualify due to non-discrimination requirements are just not considered non-taxable fringes and either the company or the recipient is probably being taxed on them. The fact that the company cannot deduct the expense doesn't mean they cannot provide the benefit. They may feel that the benefit of retaining top people is more advantageous than the cost of non being able to deduct the expense. Since I don't prepare taxes for large corporations, I can't say for sure.