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Why can't people just use transfer on death deeds? I guess there are still some states that don't recognize them. It makes basis so much easier!

Honest to God have you ever seen a specific in any one's partnership agreement. Lawyers tend to have pages and pages of bunk, but very little specifics.

My old software sent an email after returns ack'd. I don't like the idea of emailing the 9325 due to the sensitive nature of the form, but an email with no attachments would be great.

https://www.irs.gov/payments/online-payment-agreement-application

I worked with a client very, very early in the PPP process. At that time, the application asked for employees and ICs paid. I think he applied on a Thursday. That Friday the SBA and BoA "clarified" that by employees and ICs, they meant employees only. (The SBA was opening PPP Loans to the self-employed, so they applied for their own loans instead of being included in the people paid by their clients' loans.) For my client, it was no problem as he had lots of eligible nonpayroll costs; and ultimately the 24 weeks instead of 8 meant his payroll costs alone got him total forgiveness. For that Chicago person, if she had no employees, only ICs, then it's a big problem. And, the PPP loan is not 1% for 30 years like the EIDL. It's only 2 years if before 5 June or 5 years if after; don't remember the interest rate. Payments were deferred for 6 months, but interest continued to accrue.

Does ATX have the option to generate and send form 9325 automatically? Drake will do this by simply entering the client's email and checking a box, and it auto-generates and sends that form when the IRS accepts the return. This all must be filled in before e-filing. I tested it on my own return but generally don't use it for clients because the email looked too generic, and with the form's attachment, I thought some clients would be suspicious that it was a scam or some virus-infected document. The email sender is noreply@drakesoftware dot com, and if the client responds to it, the system will route the email back to the preparer set up in Drake's Enterprise Office Manager. It's also possible to set up to have the software generate the 9325, not auto-send, and then the preparer may choose to print the form to paper or pdf to supply to the client.

But if all the income is treated as subject to SE tax on a partnership, then treating payments of like amounts between partners as distribution is equitable. I don't see any way around treating unlike payments as guaranteed payments, particularly when they are based on work done by the partner.

The "quarters" aren't calendar year quarters. Look at the forms and give her the exact dates you need.

I'm printing out this thread for further review & consideration. Very interesting discussion, and may be relevant to a client situation I know is coming up shortly. Many thanks for all the comments. (I love this forum)

@NECPA in NEBRASKA ignore the extensions. Ignore the clients. Ignore the tax returns (except as a distraction for you when you need it). Let it all sit there and rot. Really. Any clients who don't understand that you and your husband are both sick at once don't deserve your effort, your time, or your concern. Anyone who actually cares about YOU will deal with any missed extensions or anything else. Anyone who doesn't return next year - you don't want them as clients anyway. You can't help them at all if you don't take care of yourself and your husband. You are both on my prayer list.

You'll have to look at the partner's detailed instructions for each item, decide if it applies to your client or if your client needs to file the forms that these relate to, and enter each item directly on any of those forms' input pages.

I question that. The tax attributes of deceased spouse do not carry over to surviving spouse. For example capital losses and NOL attributable to deceased spouse can not be claimed by surviving spouse after the final joint return for year of death has been filed. If business or rental property is solely owned by deceased spouse, then surviving spouse gets a full step up in basis. Furthermore, at the time of transfer, the property has zero adjustments for tax attributes, it does not retain it's character for recapture. If surviving spouse elects to file a joint return, then the only income and expenses reported by deceased spouse would be those incurred up to his date of death. Therefore the sale of the property after DOD is 100% attributable to surviving spouse (under the scenario above) and offset by her basis which does not retain the recapture attributed to the holding period of her husband.

Once again we have proven two or more heads are better than one

Exactly right! If it was jointly owned, there is half step up basis. If the improvements were made prior to his death, his half of those is included in the step-up, but her half should be added to her basis. If you're really lucky, it was just in his name so you get full step-up and don't have to mess with any of this.

The IRS has announced that no one should file amendments claiming the Unemployment Benefits Exclusion or Recovery Rebate Credits for any children for which the taxpayer did not receive the $ 500 or $ 600 from EIP 3. The IRS will use the data from filed 2020 tax returns and send out payments mid summer this year. I am sure they were having nightmarish visions of being inundated with amendments. Oh the horror

Mom and son are both clients and mom thought she'd slip it by me to sign the e-file forms for her adult son. I guess she thought I wouldn't notice that the signatures are all in the same handwriting and that she returned them all together in the same envelope. She tried to lie and say it is his signature, but didn't have a response when I told her that the signature is vastly different than that of the prior two years. All of a sudden she remembered that he won't be able to sign until next week because he is on call for his job, so that is the real reason she tried to get this by me. What makes me even more angry besides the lying is that this person is a bank officer and definitely knows better. I may just fire her because of this. ETA - and when I say "adult son" this guy is 34 years old, not a child that recently reached the age of 18!

From ATX News Feed: It’s important to know when the ATX software will be updated based on IRS guidance due to the American Rescue Plan Act of 2021’s changes to unemployment taxability. By March 29, 2021, we will have the software updated to ensure these calculations are based on IRS e-filing guidance and are auto-calculated. The majority of tax returns filed using ATX are e-filed rather than paper filings. We want you to be aware the recently released IRS guidance for handling unemployment compensations due to the American Rescue Plan Act of 2021 changes are for paper filings, not those who choose to e-file. We have chosen not to provide you with workarounds and manual calculations to input the pertinent data into your tax preparation filing software. These workarounds would be drawn from recently released IRS guidance for paper filings and possibly cause rework at a later date. At Wolters Kluwer, we are here to support you during busy season and especially during the peak of your compression period. We believe taking the time to act deliberately and ensure accuracy is the best way to support you during busy season. We want you to be right the first time, not waste time and lose productivity because a workaround didn’t fully capture the information you need in current and future years. Make sure to check the Latest Impacts to 2021 Tax Season Filing Dates blog post for more information on State and Federal filing changes. Wolters Kluwer – when you have to be right.

It is my understanding that if a life estate was created, and the mother retained all the incidences and responsibilities of ownership until she passed away, the daughter would still get the step up in basis when the life estate ended and she received the property.

I don't believe ATX offers an option that generates an email notification to clients once their returns have been efiled and accepted. Is there any such animal??? It would be nice if the system generated an email or text based on the status of the efile. Maybe someday?

I like this better than Form 9325 with confidential information. Here's what CCH sends to me (or directly to client): From: [email protected] <[email protected]> Sent: Thursday, March 4, 2021 6:52 PM To: [email protected] Subject: 2020 Electronic Return Accepted by Connecticut Dear JANE DOE You are receiving this e-mail on behalf of DOLLARS & SENSE LLC. No action is required; this notification is for your tax records only. This email is to confirm your 2020 Connecticut State Individual return has been successfully e-filed with the respective taxing authorities. Your SubmissionID is 0632822021063044fj59. Your Client ID is FIORE . Thank you for the opportunity to serve you. Regards PLEASE DO NOT REPLY TO THIS E-MAIL. We generate this e-mail automatically from your request to be notified when your return or extension is accepted by the taxing authority. We do not monitor this e-mail address for incoming e-mail traffic. If you need assistance or have a question, please contact the firm preparing this return for you. Thank you.

I use ProSystem fx which generates a variety of acknowledgements. I like the email to clients; however, I don't have it sent directly. I have the emails set up to come to MY email address. Then, I forward with a personal message, maybe reminding them a payment will be direct debited or to make their first ES payment. For state email, I use this introduction: And, your CT acceptance 4 March 2021. For federal email, I write, for example: Jane (not a real client), Your 2020 federal income tax return was accepted by the IRS on 4 March 2021 as explained in the forward below. Prior to the pandemic, the IRS claimed it deposits 90% of refunds within 21 days. After 24 hours, you can check your refund status at https://www.irs.gov/refunds Please remember that you can contact me at any time with questions or concerns. Best, Rita Rita Lewis, MBA, EA Dollars & Sense, LLC voice: (203) 557-0909 fax: (203) 663-8383 text: (203) 451-3010 web site: www.DollarsSense.com Any advice or opinion is based on client-provided information If any information is either missing or inaccurate, then the opinion or advice may change accordingly.

For 1040 returns ATX does offer Versicom Toll Free Tax Infoline PLUS (TFTI+) (for a fee, of course) which is an 800 service that taxpayers can call to find out the status of their EF return and refund. It available only to tax preparers registered to offer it. When enrolled in versicom the return's info is automatically sent to the TFTI+ service; that taxpayer can receive status updates by text message and/or email. I have no idea what this service costs per return, as I have never investigated it. Look for it at the bottom of the Main Info screen for the 1040.

This is extremely strange, because I mailed an amended 2019 Form 1040 on the same day. My client received a refund check in late July about 4 months later. It's like playing a slot machine.

One of the problems I had with the whole process was that a business had to take the full amount it qualified to borrow according to the data in the application and didn't have the option to borrow a lesser amount. I had only one client call to ask what the monthly payment would be if borrowing the eligible amount. I'm sure many borrowers didn't consider that and assumed the forgiveness would be an easier process.

I don't know why you would say the wrong basis is a 'mathematical or posting error' when there is a specific section of the 3115 JUST for depreciation errors.

I thought 3115 was a fix all form. I guess you can argue that the improvement doesn't need form 3115 because they simply used 0 basis on the improvement.

When reporting the sale, you use the ACTUAL Basis, regardless of what the depreciation schedule says. For determining the Adjusted Basis you do need to use the depreciation that SHOULD have been taken (including the depreciation on any improvements). Form 3115 does not apply. Using an incorrect Basis for depreciation is a "mathematical or posting error", not a "method of accounting", so Form 3115 does not apply. As was pointed out above, if the husband died before the property was sold, the Basis gets a 1/2 step-up if they were in a non-community property state, or a full step-up if in a Community Property state. As Dan mentioned, the step-up gets rid of the prior depreciation for the portion that is stepped up.

Seems like guaranteed payments would be the way to go since the concept is to pay them more if they work for the partnership more. But you will need to explain to them the new dynamic. The one who earns less is currently paying tax on income that is going to the one who works more, so they will definitely want to switch from draws to GP.

Their SE and taxable income is based on their share of the PTS Annual Income. Their monthly draws( distributions ) don't determine their taxable income.

If he CAN be someone else's dependent, then he IS a dependent. The only thing he'd get is the non-refundable part of the AOC, if his parents don't claim him. No EIP3. No RRC. No EIC.

I go with keeping it simple as asset sale with purchase info as basis, nice and neat. No hiding under desk, no time for this, you have work to do.

Yesterday, I spoke with the IRS about an amendment that was sent 3/23/2020. IT has finally been worked. I asked about the backlog. The IRS rep told me that they are working on amendments received in April 2020. She had no idea when they would get to the ones sent in June/July!

What about 2016,2017, and 2018. They must still be in the trucks.

I vote for whimpering under the desk. Holding head with aching brain.

Yup, fire away. It isn't worth it. I've never been audited but want absolutely clean records, to the best of my ability. And you are correct, how can you trust anything going forward?

i just went through a like situation and looked at the dependency criteria. The first question is whether the taxpayer (student) could be claimed on someone else's return. Then I looked at support. The student in my case still lives with parents and parents actually paid for all education having exhausted 529 plan as well as insurance, etc. Although the student earned about the same as your student, there was no way he was providing over half his own support. So I decided no. In my opinion if the student had scholarships or grants or student loans plus job, yes, probably provided in some way more than 50% of support but not in my case. Your mileage may vary, as they say.

I'd fire her, too. That response would be different if she's immediately said, "he's on call at work and asked me to sign for him - I guess that was dumb, huh?" because we all have oopsies especially regarding family. The lying immediately means I can't trust anything else she ever tells me, and I have enough irksome clients without that hanging over me. Good luck with them both, Judy.

Oh, but we get an extension of one month. One month to explain and hand hold 500 clients because of late changes. Perfect.

Ohhhhhhh @RitaB!!!

That is really not cool, especially given her job responsibilities. "Trust is earned not given"

Hi Bonnie, Sorry to hear you caught the bug. Get well. If you just want to tell the guy off, you could blame that on Covid. No one would fault you for chewing him out, making a video of it, and posting it on YouTube. Then charging him 3X in advance if he decides to stay. Just saying. Tom Modesto, CA

Yeah, these Drake entry screens and the k199 ( QBI ) entry screens drive me crazy!

I'd tell him buh-bye and I DON'T have COVID. Bonnie, you just worry about you, and get rested. This stress must be an immune suppressor at the very least. We are all praying for your healing, and that great health be restored. God bless you..... get some rest.....

You told him that you hadn't heard from him and didn't file an extension. He hasn't even paid! Tell him to go elsewhere, you have Covid.

retracted my post for further review.

There are too many possibilities and not enough concretes for us to get into this yet. The IRS commissioner said today he "thinks" the IRS can handle correcting returns that have unemployment. The software companies can't just update their systems without going through IRS system acceptance, so don't blame them. The states each have to decide how to handle these changes, and some of them will have to call special sessions if their legislatures aren't meeting at this time. Once the fed decides what to do we are not home yet because it may take awhile for the states. We just have to tell clients that nothing is settled yet and they have to wait. So don't even think about amendments yet. We too have a number of clients who haven't filed yet who are in a hold file while this gets sorted out. As much as we love our clients and want to help, there is nothing we can do right now but chill.

Looks like you have a 1/2 step up basis to start with. Sounds like a prior tax preparer was involved, can you contact them for any additional information they might have? As cbslee mentioned, the county should have information on the original purchase price and likely a valuation of the land vs structures.

I think ATX has an option to 'Amend' the return. Not just duplicate the return. I think you have to open the original, then there's the option to 'Amend'. It creates the 2nd return with the 1040X. Make sure you close the original and are working in the amended return.

Delaware's calculation has also been corrected as of last night.

I got the Drake update and checked on one return. All I'll say is BE CAREFUL WITH THE STATES. DE already decided to make the UI N/T, and DE generally piggybacks the Fed laws and starts with Fed AGI and makes just a few modifications. That would be fine if DE didn't make a special modification in Feb already to exclude all of the UI from state tax for 2020, but now that some or all is excluded from the Fed, Drake is still subtracting the entire amount again because they fixed the Fed but not so that the state calculates correctly.