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Here's my first draft of an organizer question. Feedback appreciated. Using ETax847's suggestion of all caps. DID MAKE MAKE ONE OF THOSE $%&*# QCD DISTRIBUTIONS FROM YOUR IRA?! IF YOU DID, AND YOU DON'T TELL ME ALL THE DETAILS, YOU'RE FIRED! DO YOU HEAR ME?! I SAID FIRED!!! AND DON'T YOU DARE INCLUDE THE DONATION IN YOUR TOTAL DONATIONS OR I WILL HUNT YOU DOWN.

Does Rita have to wait until social distancing is over to hug people now? And is social distancing an actual word?

You need to tell them you will refer them to your friend RITA THE GOOD HUGGER. Tom Modesto, CA

How about an IRA rollover that is coded as a 7 normal distribution, the client doesn't mention it and when asked says yeah she got the money? You wait two days to efile because it doesn't feel right and 2 hours after it is transmitted they call to tell you their advisor says it was a rollover so non-taxable and says I should have been able to figure that out from the code. Why did it take your advisor 2 days to figure this out? Oh she's really busy. Had another client do a humdinger several years ago but oh she rolled her $150k IRA into a Roth IRA so she can pay the tax over two years instead of one to save a lot of money. When I said that if she had taken out $10,000 per year for the rest of her life she wouldn't have paid hardly any tax at all it amazingly became all my fault. I'm going to wager that next year her new tax preparer didn't include the other half of her rollover.

Why, in the interest of sanity (mine), did they not add a box to 1099Rs for the QCD amount!?!? If the client doesn't tell you, you have zero way of knowing! Guess I need to add a question to the organizer.

I'm not going to hold my breath waiting for that to happen; we'll probably all be retired by then. After all, how long did it take for brokers to be forced to report basis of stocks sold?

I added a question to the Tax Organizer in all caps. This has made life much easier.

I like the advisors that tell the client to put the money in traditional IRA and then convert it to Roth, no taxes and back door Roth contribution they otherwise would not qualify for. Wonderful plan, except they have $150,000 balance in their traditional IRA and have to include the biggest portion of the contribution they take out as income. And I get to try to explain that.

Well, my neighbor called as everyone in her office received their $1200 stimulus payment today and are "in their accounts ready to be spent".....all except my neighbor. She has been married for years and passed the income test with no problems of getting even close to going over the $150,000 limit. She got on the IRS website and got the information (from a computerized program) that IRS needed to find out more information on the 2019 return.....which by the way had been filed already 3 weeks ago as evidenced by IRS DEDUCTING THE $27 PAYMENT FROM HER CHECKING ACCOUNT TODAY. THIS PAYMENT WAS NOT DUE UNTIL 7-15-20 AS IT WAS A BALANCE DUE FROM THE 2019 RETURN. So, the moral of the story.....get ready for the phone to start ringing.

My bank's mobile and online banking is broken. The message says that it's form everyone checking for the payments.

I think that adding a question is the most immediate solution, but there is no reason (except for bureaucratic inertia) that the IRS could not add a box on the 1099R showing the QCD amount and add a secondary code, as well.

Morgan Stanley included behind their Forms 1099-R a list of amounts transferred via checks directly to other than me. They don't say nor do they know if they were actually charities. But, I've put the acknowledgment letters with that list. Several of my clients use MS, also. (My broker is a good source of referrals.) It will take a lot of client training! Maybe over time, we'll see more consistency in broker reporting, too.

The letter from the charities isn't going to indicate that it was a QCD. The client I'm working on now had letters from the IRA trustee for each donation she made as a QCD, and the client was kind enough to give all of those to me, but if the IRS form had a box on it for POTENTIAL QCD, then we'd at least know to take care of it. The, of course, the client lists all of the donations including the ones that were made with QCDs, so you have to back them out. They should have put a line on Sch A charitable showing a subtraction in the amount of the QCD. This isn't rocket surgery!

I have trouble with this, also. For some reason, clients think we are going to get this information via osmosis. The only clue I've figured out is if withholding is wonky (strange percentage because only part of the distribution was QCD) or nonexistence, prompting me to ask the client. Grrrr.

The payer is not obligated to check if the payee is an IRS qualified charity. That's on the taxpayer -- and, as you say, US. Like everything else! And, your client is supposed to keep his acknowledgement letters from the charities.

This is all from memory, so do your own research, but if you're trying to use less than 27.5, look into the following: Use the UNadjusted cost of the rental house to see if you can use other than 27.5. AFS are needed for $5,000, but any client can use $2,500 if he elects. Is the invoice detailed, does it list any/all line items at $2,500 or less? TCJA was modified by The CARES Act to put QIP back to 15 years retroactive to 1/1/2018. How's his income? Is it to his advantage to accelerate depreciation or to spread it out?

With fewer people itemizing, we're going to be seeing a lot more of these.

Copied from the Journal of Accountancy: "The U.S. Small Business Administration issued a new interim final rule Tuesday that supplements the guidance for the Paycheck Protection Program (PPP) included in the first interim final rule for the PPP issued on April 2 and FAQs that are being updated periodically. The additional guidance provides specific information on calculating the maximum loan amount for individuals with self-employment income who file a Form 1040, Schedule C, Profit or Loss From Business. The 2019 Form 1040 Schedule C is required to be provided with the PPP loan application, according to the interim rule, which notes that detailed documentation guidelines are also required. Guidance is also provided on how PPP loans may be used and how loan forgiveness will be calculated. The SBA stated it will issue additional guidance for those individuals with self-employment income who: (1) were not in operation in 2019 but who were in operation on Feb. 15, 2020, and (2) will file a Form 1040 Schedule C for 2020. Additionally, the new guidance directs that the self-employment income of partners in a partnership may be reported as a payroll cost, up to $100,000 annualized, on a PPP loan application filed by or on behalf of the partnership (or LLC filing taxes as a partnership). Individual partners may not submit a separate PPP loan application as a self-employed individual. The guidance also addresses the eligibility issues of certain business concerns and requirements for certain pledges of PPP loans. Congress created the PPP as part of the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136. Under the PPP, Treasury and the SBA are offering $349 billion in forgivable loans that small businesses damaged by the COVID-19 pandemic can use to cover costs including payroll, rent, utilities, and mortgage interest. Businesses with no more than 500 employees began applying for the loans on April 3. The application window opened April 10 for those with self-employment income who file Schedule C with their Form 1040. This includes independent contractors, gig workers, and sole proprietors, including those who have other employees. As of the close of business on Monday, the SBA had approved $242 billion in PPP loans to 1.01 million small businesses through 4,662 approved SBA lenders, according to a tweet Tuesday from U.S. Sen. Marco Rubio, R-Fla., one of the biggest supporters of the program. The CARES Act established the PPP as a new 7(a) loan option overseen by Treasury and backed by the SBA, which is authorized to provide a 100% guarantee to lenders on loans issued under the program. The full principal amount of the loans and any accrued interest may qualify for loan forgiveness if the borrower meets requirements related to having employees on payroll."

I'm waiting to see what everyone else says because they are much smarter than I am. I always go 27.5 on HVAC and would not have even entertained the thought of anything else. You make me pause and study a little deeper everytime you ask a question *I think* I already know the answer to! LOL So, I say 27.5 and that's it, like you said, but wait... I'm sure there's more!

Ending inventory should be 0. COGS should be $30K. The Ending inventory of $12,000 is sold along with the rest of the business. When it is sold with the sale of the business at most it is being sold at cost, but usually with a discount which the seller can play with to close the deal. Inventory is Class IV form 8594.

That's a common trick of small employers. No vesting. Employer contributes. Employees don't stay that long. That employee's balance is distributed over the other accounts of which the employer has a huge percentage and receives most of it in his account.

For Catherine...Science and the mystery of POOF.

Yes, that is one line of thinking, but there is another that says it shouldn't be reported on the 4797 including the instructions to that form itself and Pub 544 that both say this: When is inventory not held for sale in the ordinary course of business? Also, I think it should be subject to S.E. tax because code sec 1402(a) defines net earnings from self-employment, and 1402(a)(3) says "(3) there shall be excluded any gain or loss… (C) from the sale, exchange, involuntary conversion, or other disposition of property if such property is neither (i) stock in trade or other property of a kind which would properly be includible in inventory if on hand at the close of the taxable year, nor (ii) property held primarily for sale to customers in the ordinary course of the trade or business.”

Sorry, I did not catch that part. I think there is a good case to put it on 4797 since it was not sold in the normal course of business. Might also save on SE Tax.

That rule where the rental is less than the greater of 14 days or 10% of days rented is supposed to apply only to rentals of a personal dwelling unit (second residence or vacation home), and in this case the timeshare wouldn't qualify as a second residence because the fact pattern says that the taxpayer wasn't able to use it at all last year.

I think it's the wages you report on Form 941 but NOT including wages you use for another benefit, such as PPP forgiveness. I don't think it kicks in until you're filing 2Q Forms 941, so we have lots of time to continue getting clarifications that are arriving almost daily. I'm sure you know as much as anyone else; but if you're unsure, you could find a good payroll company to work with your payroll clients. (I got rid of all my payroll clients to places like Paychex, so I don't have to learn the finer detail of this one!)

ILLMAS: I can say those words here. I would NOT be able to say them to a client. If I think of a polite-sounding way to say, "I told you so," I would. But, luckily my S-corp employee/shareholders DO take salaries, quite a lot of salary, in fact. So, their grumbles were about not being able to use the amounts over $100,000 in the calculations. And, they are all smart enough to realize that's a good problem to have, so tiny grumbles!

Net earnings from self-employment for 2019 divided by 12 x 2.5, plus retirement plans plus SEHI is what I've done. If they want to discard the health insurance because it's not group, then let them do that.

The 1120S owner should've listened to us when we told him to put himself on payroll.

If the floor and sub-floor were destroyed, I would expense that cost as a repair. Any part above and beyond restoring the floor to usable condition (how worn out was the floor previously?) would be capitalized as an improvement. But the restoration is repair; an apartment must have a sound floor. De minimis expense on the water heater. Fridge I'd either take bonus depreciation or just depreciate without the bonus; it might help more in future years to have the deduction then, in years without the huge repair costs. New roof not eligible for Section 179 expense on a rental. Amend 2018 (two years of incorrect usage to have to file 3115, so lucky to catch it in year two), continue on to 2019.

On the flip side, the Billion, Billion , Billion dollar hedge funds have succeeded in getting the SBA to reclassify them as small businesses, so that they can get sum o dat guvmint money