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Easy now. I resemble ...uh resent... that remark. Tom Modesto, CA

All of the years. Start from the beginning; it's cumulative. Not just the income side of it; deductions, 179, distributions, etc all factor in too, and all in a specific order. Here's a worksheet: http://www.thetaxbook.com/updates/TheTaxBook/Client Tax Tools/S_Corporation_Shareholders_Adjusted_Basis_Worksheet.pdf

A 4868 filed by 15 July gives you three more months to 15 October.

Not just income. Deductions, nondeductible items and distributions all reduce basis. Just as contributions of capital, other income and notaxable income increase basis. And it MUST be done year by year, because at the end of any year, if losses, deductions and/or distributions decrease basis to zero, and excess losses and deductions are carried forward, and any distributions in excess of basis are long-term capital gains (after the stock is held for at least 1 year).

State laws on this vary, so it's wise to check their websites. I had a CT trust that became a SC trust when the trustee moved. I have a CA trust that remains a CA trust because the grantor lives there even though the trustee resides elsewhere. If you are talking significant bucks here (say, owe NY or MA $100 or $200 for 50 years) send the client to a tax attorney. They can negotiate with the state, while keeping the taxpayer's identity anonymous. The power they wield is that they know who the client is and the state doesn't, so if the state doesn't reach an amiable agreement on how much back tax they want, they will never find out and will get nothing.

And I had a call yesterday inquiring about a $300,000 loan.........

Yes, I have seen other articles that they have been limiting the EIDL loans to the original $ 10,000 Grant plus $ 25,000.

This is one good thing for me. I usually spend a lot of time the first week of April getting these ready, especially for clients who needed to make a payment with the extension. Ky will accept the Fed extension but the local counties/cities want their own extension with a payment. Ky and the local jurisdictions have all conformed to the Fed filing and payment extension.

Ron: I know you wanted a no-cost option, but nevertheless you might want to consider Tax941 from Time Value Software. The cost is $170, and it is a simple 941 generator. It stores all the client detail, so each quarter you just call up the current quarter form and enter the numbers. It prepares Schedule B (if required) and will do penalty calculations if the client is late with a FTD. It also updates the form if/when there are changes, which there will be in the next quarter. It's very efficient and well worth the cost, IMO. https://www.timevalue.com/tax941

Did anyone give you this link? https://www.irs.gov/pub/irs-pdf/f941.pdf

Corporations are just shareholders and as tax professionals (if we want to call ourselves professionals), we should do everything we can to track basis both on the corporate return and any individual returns we do. Shrugging and saying it's not my job is a dereliction of responsibility, in my opinion, because we all know shareholder have zero clue how to track their basis or even what that means. Losing track of basis creates a lot of problems. The IRS made a huge mistake by not having a basis form as part of the K1 from the 1120S and as part of the 1040 Sch E page 2.

I misstated my previous post. I was thinking of a client I had several years ago and did not remember the details correctly. He was self-employed and used his own pick-up to make deliveries for a wholesaler. The company gave him a gas card and instead of taking the full mileage, we only took the depreciation portion.

His basis went up this year by the amount of income on the K1. If you enter it in ATX it will show basis increasing. Does the K1 show any distributions? When you say 'pay stub' was it a payroll check or just a regular check? If the corporation bought his stock (dumb move) then this is a capital gain, whether they did a 1099DIV or not. Recreate the basis as Judy suggested. Too many lazy (or ignorant) preparers have not tracked basis. I wish the IRS would just create a form for it to force everyone to comply.

Liquidating distribution for stock should have been reported on 1099-DIV. Was K-1 generated from a computer program? He could ask if that program generated the basis calculation. Otherwise, if he has all K-1s, recalculation basis starting from the beginning based on what he invested and adjustments for each year's activity shown on his K-1s

Self-rental of home office is fine as long as the rental shows a profit. Losses on self-rental are suspended as passive, but profits are not passive income, so if you have no other passive income, those losses are suspended until you sell the house.

>>>>>>It is the ex, who is the Non-Custodial parent that needs the 8332 to rightfully claim the dependents. However, with or without an 8332, if both parents are trying to claim, it comes down to who files first. <<<<<<<< I think what Max is saying here is who files first or gets to the tax office first generally gets the refund first. Doesn't insinuate the case is over and the person who has/had the right to claim the dependency just loses. I have personally seen this many times. In response, I would tell my client exactly that if he/she had the right to claim the dependent, then paper file the return. The IRS would determine who had the right to the dependency. I would also tell me client if they prevail over the spouse, then the IRS would require the spouse to repay the funds received from improperly claiming the dependent which could/would open up very ill feelings between the parents. To me it all depends on the level of refund to be obtained. Sometimes it is best to just let sleeping dogs lie. Now add EITC to this and another can of worms will be opened.

If regular home office is substantially more than simplified, it's well worth claiming because it saves SE tax and income tax. Paying tax on the depreciation later (if the house even sells for a gain) is a small price to pay for that. But I do use simplified on some, for various reasons.

Yes an extra bedroom can be deemed a home office - several of my neighbors do that. They can depreciate any office furniture or equipment they put in the office. Just my opinion but the safe harbor they instituted a few years ago is the best option only because you don't have to recapture the depreciation when you sell and you don't have to keep track of things each month. I've yet to meet anyone who didn't prefer that route when explained to them. A lot of the financial advisors I know who do this sort of thing actually end up signing up for an office sharing arrangement (like WeWork) just so they have a mailing address and a conference room to meet clients. For $200-300 per month they can be a good deal. CPA in my building just switched to that type of office. If you do the office sharing arrangement they lose the home office deduction.