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Canoeing with friends........ Indoor magic with pets......... Snowball fight with a neighbor........ A warm bath after the winter chill.....

No, the amount in box 9 is more than informational. It indicates the amount of depreciation taken but is unrecaptured because depreciation on the asset sold wasn't using accelerated depreciation, however that amount has the potential to be taxed at a maximum rate of 25% but could be less depending on the other income on the return. That box 9 amount will be incorporated in the Sch D worksheet. This link that I included above has a more detailed explanation: https://www.taxcpe.com/blogs/news/recaptured-and-unrecaptured-real-estate-rental-section-1250-gain

They will not owe any penalty if they pay 90% of their tax liability via withholding &/or estimated tax payments or 100% of their prior year liability. Because the $10,000 withheld is greater than the prior year $8,742, they will not owe a penalty, just a boatload of taxes. And, 2020 will be a bear, needing to get the 90% right to avoid a penalty without the other safe harbor to fall back on.

You're missing one GIF of hot cocoa.

Great responses, all. Thank you.

If the taxpayer was in bankruptcy, you don't need to bother with insolvency. Just check the box. If 1099Cs were issued, you definitely have to report it.

We have seen several clients, that used Form 982, and marked insolvency, that the IRS wants documentation of the insolvency. For some clients, the debt was forgiven 2-3 years earlier. Finding documentation for everything on the Insolvency worksheet, is nigh on to impossible.

After getting all the docs for filing a 982, I fill out the IRS worksheet (pub 4681 p 6) and then have the client(s) sign it.

One package separate envelopes. You may even want to mail each a week a part.

Agree with both Catherine and SaraEA. Only thing to add, is your client insolvent? Also, get prepared, never ignore a 1099-C. I had a case several years ago where everything was checked and the IRS audited the return. Fortunately, my client had all of the paperwork from the bankruptcy that contained the schedule of creditors that were identified in the bankruptcy filing. This was a CH 7 bankruptcy and ended well. Just sayin.

Yes, sanction can be used in different ways, and I guess alert can be also! (Like, alert - get ready to duck.) Actually she's a great gal, but she hasn't gotten back to me re what she needs, why, for what, etc. I'm guessing it's not for her personally, because she's in finance. But, it might be a good job lead.

No. The IRS doesn't know when the withholding occurs and allows for the assumption that it is ratably throughout the year, and your software will automatically divide it evenly. IRS knows only the dates that the estimates were paid.

Yes that is correct. Also, in your first post, the taxpayers' penalty for 2018 should have been waived because the IRS adjusted the percentage from 90% down to 80%, so while they didn't meet the 100% of prior year exception, they did actually squeak by with 80% of the 2018's liability being paid in because of the $7,000 in withholding (8,742 * 80% = 6,994) . ETA - also from your first post - if you know they will fall short and be exposed to the underpayment penalty for 2019 , the final payment must be in by 1/15/20, AND even doing that the taxpayer can still have a shortfall in any of the earlier quarters. If the exception to the penalty has been met though, then YES, it is possible to pay the remaining balance due by April 15th.

When AGI exceeds $150,000, or $75,000 for those married filing separate.

No 1099c should be issued if the taxpayer was in bankruptcy. "Should" of course doesn't mean it won't be issued. If it is, just check the first box on Form 982 (Title 11 case). Title 11 is the code section for bankruptcy, not to be confused with Chapter 11, which is a form of bankruptcy.

The returns can be sent on one package provided each return is in a separate envelope, marked with the year it pertains to. Otherwise, it often happens that only the top return gets processed. I suggest getting both the IRS Wage and Account transcripts. A lot of things could show up that would affect the returns.