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20 boxes of paper would last me about 10 years.

Facepalm Sunday

This thread is gaining a lot of circular momentum

For a $300 fee, sure.

Lol, good thing it’s Palm Sunday

But it was a quick question! The answer(s) aren't!

These family situations can go around in circles...

I've gone paperless with 75% of my clients. I upload everything to the portal and have them sign electronically. I then provide them with a completed copy of the approved eFiled return for their records. I hope to increase this number overtime but there will always be some clients who prefer paper copies.

I wondered about this too and checked and found that Drake actually has a spot to enter an IP PIN for a dependent.

In my opinion, since this was a new purchase and had to have significant 'things' done to prepare to place into service, the expenses should be capitalized. I look to the Tangible Property Regulations Reg. section 1.263(a)-3. The AICPA put out a Quick Summary of Final Tangible Property Regulations a few years ago and RSM Consulting has some nice decision trees to help. https://rsmus.com/what-we-do/services/tax/new-flowcharts-provide-clarity-on-the-final-tangible-property-re.html When I look at both of these given the OP's description, I come down on capitalization. YMMV. I did not look at the definition of Leasehold Improvements because the description did not say the property was leased, rather a purchase.

Anyone can get an IP PIN now. That will prevent e-filing with the dependent without the IP PIN.

The PPP Loan Expense Window begins the day the funds are deposited in your clients checking account. There is no delaying the starting date. You can pick your ending date by choosing your expense window of any number of weeks between 8 and 24. The best strategy is to maximize the $ amount of your PPP Loan Forgiveness, then if there are any payroll dollars left over use those dollars for the ERC.

Centrifugal force warning!

Yes but the other party probably wouldn't paper file because of the time. They need to get in there fast and first.

Turned out to be a good move to not have her name on anything so all of the land got a step up in basis, not just half of the land. It might be different in community property states.

It's interest.

I, too, have gone mostly paperless a few years ago. When clients bring or mail documents, I scan and return but have been fortunate that perhaps 60% have been able to navigate the portal and upload at least everything they have in pdf. And I upload the client copies of the returns and encourage them to print or save. But, with several folks of a certain age in years or technology education or equipment, I do still have some number that want that printed copy. Just so glad to have a lot less nowadays!

Yes, as in the example I linked to: (Only the portion of the distribution representing earnings is taxable.)

I was very fortunate to buy 20 boxes on a damaged pallet this past summer from a client that was purchasing pallets for resale. Most of the boxes are slightly damaged. The paper was fine. Worked out to be 20 bucks a box. Can't beat that!

It's not that new. You've been able to e-file with dependent IP PINs for quite a while. There is no place for the dependent pin on a paper return, so the other party could still paper file. I don't know if the IRS holds such paper returns or not.

going thru the estate.

If they were going to pay with an efile debit, efile the return and initiate the payment using Direct Pay.

Fully depreciated building, no major improvements in 40 years of ownership.

First question - What does this mean?

Does TP currently have any ownership in property? Not unless there is a legal and binding contact / note. Why do parent's have zero basis? Sounds like this transaction would be a partial sale / partial gift since the fmv is greater than the consideration given.

How do you plan to circumvent 162(a) in regards to disallowing deductions incurred before the activity became functional?

But the IP PIN is for the taxpayer and spouse. Since when can a dependent get one, and where would you enter it? Your clients need to file a paper return claiming the child. The IRS will send both parties who claimed that child letters and will sort it out.

I don't believe 195 would apply unless the rental activity rose to the level of a trade or business. That was not indicated here, OP mentioned passive loss offset by profit of other rentals.

I don't tell them what to put in an operating agreement. I tell them to work with a lawyer so they can have an operating agreement that meets CT state law. I don't think anyone mentioned an LLC except for your mention of an attorney and an LLC. Lawyers have a strong lobby in CT, so I suggest a legal advisor to every biz who isn't a sole proprietorship. I also suggest a biz develop a good relationship with a friendly, local banker. And, a broker or someone who can administer a retirement plan. And, an insurance agent(s) for health, liability, etc. And, a professional organization in their industry. But most importantly, to keep me in the loop!

One more thing - the 10% penalty doesn't apply in this case (for the portion of the expenses attributed to the AOTC)!!!

To answer your original question, yes, you can take the AOTC, reduce the amount of qualified expenses, and potentially pay the additional tax on the distribution, as described here: https://www.irs.gov/publications/p970#en_US_2020_publink1000178546 But as Randall said, it's best to try to find expenses that aren't qualified for the AOTC that are allowed for 529 plans to "use up" the distribution.

No they do not. Co ownership and rental of real estate property does not meet the definition of a partnership per case law, unless an attorney talks them into filling forming an LLC. Your role is to inform them of the cost and tax filing requirements, the decision is theirs.

Yes, his estate got stepped up basis.

I'm not sure if this applies to you. But 529 qualified expenses includes much more than the AOTC qualified expense. Room and board. Even if they're living at home, I think there's a chart for the school area you can use for 'room and board' expense.

I'll bet sooner or later we will have this conversation with someone: CLIENT: I've got $300 worth of receipts for masks & stuff we can take above the line. PREPARER: That won't help. You're confusing masks & stuff with contributions. CLIENT: But my hairstylist said... PREPARER: Sorry, your hairstylist is wrong. CLIENT: (S)he's pretty smart about this stuff. Can you look it up again, just to be sure?

Like telling teachers they can deduct PPE as their $250 above the line. I never met a teacher who didn't spent over $250 already, before PPE became a necessity. Politicians making their voters happy and leaving it up to us to explain how it doesn't benefit them at all.

For the unemployment, it is not doing a good job. Rita, I think you have to devide all income by 12 and use that amount (on month) as income received while a Virginia resident. Then pay attention to any subtraction for unemployment. That amount should be 100% of that 1/12 and no more than that.

I believe the IRS will just treat it as a math error (so no penalty) if they claim the RRC, but got the EIP. However, if they don't claim the RRC, they will have to amend the return to get it. So if you/they are unsure, and they don't mind waiting for the refund ("a slight delay"!!), might it not be best to claim it? https://www.irs.gov/newsroom/2020-recovery-rebate-credit-topic-g-correcting-issues-after-the-2020-tax-return-is-filed Q G2. I made a mistake when calculating the 2020 Recovery Rebate Credit on my return. How do I fix it? (added March 1, 2021) A2. DO NOT file an amended tax return with the IRS. If you entered an amount on line 30 but made a mistake in calculating the amount, the IRS will calculate the correct amount of the Recovery Rebate Credit, make the correction to your tax return and continue processing your return. If a correction is needed, there may be a slight delay in processing your return and the IRS will send you a notice explaining any change made.

Congress also stated that this PPP loan forgiveness will INCREASE a shareholders basis. If I just do a M-1 adjustment, it doesn't increase the shareholder's basis. That is why I thought of putting the forgiveness amount on line 16b "Other tax-exempt income". This will increase the shareholders basis and do an M-1 adjustment.

Look at the clergy worksheets in your software. Your client needs to provide you details of their housing costs. Does he have other unreimbursed expenses such as vestments, books, publications. Where does he prepare his sermons. Does he have a home office. Travel from the church to visit his parishioners. Do you have CFS Tax Tools? they have a clergy worksheet which I give yo my clergy clients. MAMalody will probably have more insights.