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I will defer to the experts: "How to report NFTs on taxes For creators, NFT-related income is reported on Schedule C (Profit or Loss From Business) or on the applicable business tax return (Form 1120, 1120S, or Form 1065). Under Section 162, creators can deduct any ordinary and necessary business expenses from the income recognized. Common expenses include auction fees, transaction fees, subscription fees, or any other expenses incurred in connection to NFT sales income. Investors can use Form 8949 (Sales and Other Dispositions of Capital Assets) and Schedule D (Capital Gains and Losses) to report dispositions of cryptocurrency to purchase NFTs and the subsequent sale of NFTs. Make sure to enter code “C” on Form 8949 column (f) to indicate a sale of collectible. There is no robust information reporting mechanism in place in the cryptocurrency space. In other words, participants do not generally get 1099 forms with cost basis information from NFT platforms. Therefore, it is extremely important to keep detailed records of cost basis and market value information of the cryptocurrency used to purchase NFTs and the NFTs themselves. This information is required to correctly calculate your capital gains and related taxes. Trading NFTs generally requires receiving, sending, or selling a cryptocurrency. Therefore, if your client dealt with NFTs during 2020, make sure to check “Yes” on the virtual currency question on the front of Form 1040—“At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency. https://news.bloombergtax.com/daily-tax-report/how-are-non-fungible-tokens-nfts-taxed

Baby granddaughter at just over 8 months old, has her first little toofie. So exciting!

Katherine, we're glad you're here. You've been more helpful than you know. Thank you for chatting with us. I tell my clients that I may be a sole proprietor, but I have my virtual water cooler!

I used to use eServices. Then at some point, the IRS said there is "something in my file" that prevents me from holding an eServices account. I really miss it. I have a small clientele, so didn't need transcripts often. But when I did back when I had an eServices account, I could go online pull the transcripts, and see them immediately -- when I had a 2848 on file. (Way, way back, I could enter the 2848 on eServices and pull right then; but probably too many entered 2848s that didn't have the signed hard copy and lost that privilege for all of us -- IRS claimed they dropped that because not many used it. Now there's the "new" online 2848 method, but I can't do that either.) Someday when IRS Service Centers are open again (although, the nearest one is several towns away) I'll go in person to see what can be done. No one can tell me "what" is on my account that prevents me from identifying myself. I unfreeze my credit reports for them. They say my cell is not in my name; AT&T says it's been in my name since the 80s. But real live human beings (back when you could get one on the phone) couldn't adjust my "account" so I can use it. Register for an eServices account right now before you get too busy. And send in 2848s or 8821s as soon as you suspect you might need them (because it still takes time to process them). Try it; you'll like it. It's faster than if you have to talk each client through the process of opening their own accounts and downloading their own transcripts to give you.

If MN starts with AGI, then no. On 2020 federal returns the deduction was before AGI. On 2021 it's after AGI.

Thank you! Really appreciate you and other friends here bring us up by giving all your kindness advice. I wish I would do the same to others too. I am starting to build my methods fit me.

Wait. You've never pulled a transcript?! We do it all the time. Transcripts are instant on eservices but you need a POA on file to get them. The whole 'it's too big so we sent it to your mailbox' is just stupid. When you go to your mailbox you download it just the same as if it downloaded the first time.

And of course, it could all blow up in your face if the person you confide in repeats what you said to your client. Some people with dementia get frustrated easily and are quick to get angry.

You don't have to disclose any financial info to let someone know. If you have a relationship with children or someone else close to them, it can be as simple as saying something like "I noticed your Mom isn't as organized with her information as she used to be."

OK...Catherine... there goes the Groceries...

Gulp! I replied to the totally wrong thread! This was supposed to go with the 2 family to single family issue. I just glanced at the reply without noticing the issue. I will now crawl back into my hole and bury my red face....

You need a Section 7216 Disclosure Authorization to talk to anyone else about their taxes. It's actually a pretty fine line to tread with our elderly clients. I try to have them come in (or meet me with) a family member - use an excuse, such as "making sure someone understands new technology" or something they'll accept. Once the client has freely spoken to you with that family member present, you can also ask about "should there be trouble in the future, may I speak to X?" to start the discussion.

Well, that's a loaded question. Most of my clients are families, so it would be easy for me to talk to one of their family members. But, what if you honestly don't know that person or their family very well? I'd say no, because it might be that family member who takes advantage.

JUST PLAIN CRAZY......My client just received a Letter 525-M, a 14 page Notice of audit for 2019. The end result is that the 2019 refund has been frozen until and if they agree to the findings that the IRS owes them an additional $4.00! Yes, you read that right $4! Of course our letter of response to their inquiry is lying in the 5 million pieces of unanswered correspondence. I have a terrible headache and am getting more depressed and unhappy by the hour.