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I agree. Advanced age and forgetfulness is a condition that should qualify. The sense I get from the IRS is they really don't want to assess this penalty if the taxpayer has already fixed the problem. Compliance is more important than punishment on this issue (besides the optics of taking senior's retirement savings - even if it is justified under the law). Tom Longview, TX

I would prepare the 5329 and request the waiver. You don't need a note from the Dr. Just indicate that it was an oversight and that both the 2021 and 2022 have been removed from the account. I've had several of these over the years and never once did they access the penalty.

The correct way to do this is "unreimbursed partnership expenses" deducted of Page 2 of Schedule E, assuming that that the required language is present in the Partnership Operating Agreement.

That will be me next week but in a Speedo

As we are doing, it is a good idea to review your personal estate plan, to make sure your wishes are known, and to try to make it as easy as possible for those who survive.

Christian, If it was my client, I would file 2021 with the 50% penalty. Then file 2022 with the combined 2021 & 2022 RMD, which will match the 2022 1099 R. I would still try for the waiver, assuming you can assemble enough supporting documentation without the Doctors Letter, the worst they can do is say no!

In 87 when wife inherited the property, wife essentially gave husband a gift of half of the property's value at that time, so his basis is the value at the time of wife's inheritance. Then when wife dies in 2014, husband gets a step up of the other half of the property that was titled in the wife's name that passed to him. Summary: For husband's purpose of this sale, half of the property is at the 1987 inherited value, and the other half is at the 2014 value.

I have a couple in my small practice that are selling properties in various ways. Spouse's dad has a partnership that sold a building, so my client's K-1 will reflect that. That kind of thing. And, they all need ES calculated. I'm still preparing 2021 returns and don't have enough hours in the day to recalculate 3Q and 4Q 2022 ES, especially when their % of ownership in that partnership that sold the building changed as dad gives more to his grown kids each year. Even more time-consuming if they became my clients without basis info for dad's 1065 and 1120S K-1s, and I'm waiting on all their prior returns/K-1s to compute basis, too! I am seriously going to fire some clients in October.

Will happen more often in CA, estate sales, because of our Prop 19... Sold my grandparents home recently. Bought in '69. Had a $70 lien on it for treatment at a county hospital in '71. No interest was charged! Had there not been a requirement for one of the heirs to reside there, we would have likely kept it. It was one of the last in it's development still a residence. The property was split by Hwy99 decades ago, and on both sides of the freeway, it became commercial usage. The new owners have done what the neighbors did, gut, then remodel for a construction office (electricians in this case). I suspect, now that CA has such a rule in place, those who benefit will try to repeat in other states.

Is it just me, or are a lot of people selling old properties this year? Inherited, gifted, purchased; I have already had several inquiries on what the CG tax is going to be. We just figured one out yesterday based on 2021 return so that he could send in an estimate payment. Talk about making your head hurt! And then there are the LE estate properties being sold before the death of the Remainder owner!!!!

I have had a couple of cases with the NY sales tax people. One, the agent was very helpful, listened to us and even waived the penalty. The other two, the agents were real jerks and impossible to deal with. Didn't want to hear anything except when they could expect payment. It seemed like they were working on commission, getting a cut of every case they closed. If your client was on file as a "responsible person" it's hard to argue that he didn't know what was going on.

My understanding is that he must withdraw the amount of the missed 2021 RMD plus the the 2022 RMD.

The Internal Revenue Service has released a draft version of the Form 1040 for next tax season, with an expanded question about virtual currencies, now referred to as digital assets, along with other changes on drafts of that form and related forms and schedules. https://www.accountingtoday.com/news/irs-expands-crypto-question-on-draft-version-of-1040

Charge your clients at least double what the ERC mills charged them to amend their Forms 941, and upfront, also!

Heads up. NYS is giving eligible employees a bonus. Catch? it goes through payroll, but is not subject to NYS or NY local taxes. <Vent> I can see employers handling it incorrectly, and including the amount in taxable wages for NYS and NY locals, and maybe even withholding on the bonus, with employees and preparers having to fix. Employers have to apply for the money, then pay it out when received from NY. Hard to imagine something more complicated. To me, would have been more sensible to give a tax credit, but then again, their method relies on employers doing the verification, payments, paperwork, for free. Just like the Covid PTO was "no cost" to employers (ha)... </Vent>

Turnaround time by end of February is two weeks. Becomes three weeks from March 25 on. I'm the entire staff. I worked about 72 hours most weeks, about 84 hours the last two weeks before April 15. I'm just not capable of crushing it like you did! My one suggestion: When I sat there in the carnage on April whatever it was, I told myself, "Next time, start the season with laser focus and efficiency so you're not sitting in the carnage at the end." Ok, two suggestions. I tried the drop off without looking at what they brought, and that turned out to be less efficient for me. I am better off spending a few minutes looking thru the documents with the client there, seeing what's missing, telling them, "Your mortgage payoff is not their gain, your net check is not your gain, and here's what I need," right at drop off. I do try to explain very thoroughly so something clicks, and they learn something. I memorialize what I told them, place the note on top of their documents so I don't start on it before I have everything. I thought it'd be great and efficient to scurry them outta here at drop off. Not my clients.

AICPA demands IRS pick up the phone faster for tax pros "The American Institute of CPAs wants the Internal Revenue Service to pick up the phone faster on its so-called Practitioner Priority Service for tax professionals and make other fixes, pointing to a "plummeting" level of service in recent years. Taxpayers and tax pros alike have long complained about the difficulty of reaching the IRS over the phone and those complaints have mounted during the COVID-19 pandemic. Despite recent efforts by the IRS to ease the burden that the backlog has caused for taxpayers and practitioners, the AICPA notes that service levels for the practitioner priority service phone line had been in continuous decline for several years. The National Taxpayer Advocate's annual report to Congress found that the percentage of calls answered on the PPS line declined from 78.3% in fiscal year 2019 to 28.0% in FY 2021, with the average speed of answering the phone nearly doubling from 8.8 minutes to 16.1 minutes over that same period. Still, that was better than the level of service for regular taxpayers, where the percentage of calls answered by IRS employees declined from 28.7% in FY 2019 to 11.4% in FY 2021 and the average speed of answer went from 16.2 minutes in FY 2019 to 22.8 minutes in FY 2021. Many taxpayers have complained they were unable to get through at all. "We are hearing from tax practitioners everyday regarding their significant PPS line challenges and the impact those challenges have on their interactions with IRS on behalf of taxpayers," said the AICPA letter."