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A client's wife inherited a house which she and husband lived in for a number of years. They then bought another house and basically let family use the inherited one for a number of years. Last year she sold it and since the couple has not lived there in eight to ten years it cannot be sold as their residence. I will show it as an inherited house using the basis as of the date of her father's death and add any improvements made by them since he passed on. This seems correct to me but as usual any input is appreciated.

Several years ago I had a client who did the 60 day rollover in multiple pieces (Not trustee to trustee ) The rollovers were all done within 60 days, but the stock broker receiving the rollover funds dropped the ball on the paperwork. The IRS took the position that the rollovers didn't qualify. My client was very late getting the IRS letters to me After sending in all of the documentation 3 different times, the IRS agreed to most of the rollovers but insisted that about $ 2,000 didn't qualify and was taxable, Finally I told my client that I had done everything that I could do and advised him that it was up to him to either pay the tax or to call the IRS himself. A classic case of "how not to do rollovers!

Do they have other money he could put into an IRA? This is why IRA transfers should always be trustee-to-trustee.

If they are repairs in nature, they could be considered start up costs. If capital, then depreciation starts when the business is operating.

Many Government and Public Assistance grants are not taxable. See Quickfinders; Page 4-5. Also included are some Volunteer grants. If there was no 1099; I would certainly try to find out if it is indeed taxable.

See if the client qualifies for self reporting and penalty waiver see https://www.cpa-wfy.com/did-you-miss-the-60-day-deadline-for-your-ira-rollover/

Sometimes you can't rescue people from their errors.

Personally I'd claim the $396 as interest earned.

Please confirm (or correct me) my understanding of leasehold improvements. Homeowner has a barn on her property and plans to make improvements to barn to begin a small business. The plan is for the individual to form a Single Member LLC - Schedule C. After improvements are made to the barn she will start to conduct business within it. Am I correct that the improvements made to the barn increase it's basis and are not generally deductible as expense? I recognize this post is very basic in nature and not providing detailed information on the business or the types of improvements. For the time being, that's all the information I have and I will update as I learn more. With that said, generally speaking is my understanding correct? Improvements will add to basis of the barn and are not deductible until the business begins?

Sounds to me like they contributed to Roth in 2021 then realized they could not due to AGI. Since most markets were down in 2022, it's reasonable that if they had less than the 7K to withdraw. Entering codes JP does not make anything show as taxable, does it?

Box 2 reads 0 taxable. TP and spouse did not make roth contributions in 2021. Income 2 high. Will try to touch base with broker to determine why this was even done. J indicates roth and p indicates excess contributions which does not appear to be any.

We would have gone this route but the bank has told them 2x that they will NOT move the money into an IRA at this point. I was the one who asked him 2x to ask them and that was their response both times. Can't get a waiver if the money is still sitting outside an IRA. The bank will charge them a fee for early withdrawal of a CD and in their minds it is better to pay the tax than the fee. Not my problem anymore as he doesn't seem interested in me calling the bank for them. (Bank keeps says they'll only move their allowed contribution and the clients aren't even interested in that.)

I agree that the tax portion of the refund is nontaxable since they used the standard deduction, and also agree with mcbreck to report the $396 as interest income.

How many people will hold up sending in their documents to us after reading or hearing this. I already had 2 calls. I hope they come out with guidance soon. Tax practitioners don’t have time for this right now.