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I haven't heard of this either. If there is excess sehi, it is usually because it exceeds the income from s.e. income, and then that excess goes into medical expenses on schedule A.

Employers can make contributions to an employee's HSA, and employees can make pre-tax contributions through a cafeteria plan. These are treated the same and both are reported as code W on Box 12 of the W-2 and will generally flow through automatically to the 8889 line 9 - no adjustment on the tax return can be taken for these. If the employee makes additional (post-tax) contributions, they are reported on line 2 of Form 8889 and an adjustment may be taken.

Under the FAFSA Simplification Act of 2020, which went into effect for the 2023-2024 school year, schools are required to compute a Cost of Attendance (COA) for each category of student (broken down into components), and must publish these on their website (it was optional before, though many did publish it). Note that schools may (but are not required to) adjust the published COA on a case-by-case basis for special or unusual circumstances, so the taxpayer may be able to obtain a different COA for their specific situation from the school (be sure to get it in writing). Also, under the new law, the "room and board" component was renamed to "living expenses", which may also be listed as "food and housing".

RR 89-51 involved a similar situation where the use of a vacation home was donated to a charity: "Neither A nor B is entitled to a charitable contribution deduction. The gift of the right to use property is not a deductible contribution"

Some courts have ruled that counting every individual wager that wins during a gambling session is unreasonable, as they are not really an accession to welath. The IRS has proposed, first through Chief Counsel Advice Memorandum 2008-011 Reporting of Wagering Gains and Losses (https://www.irs.gov/pub/irs-utl/am2008011.pdf) and later in Notice 2015-21, a safe harbor for netting certain winnings and losses on a "session" (or daily) basis. This is likely what the previous preparer is relying on. However, the proposals were never finalized or put into effect (and applied only to slot machines), so you use them at your own risk. I'm curious if anyone here is relying on them?

Yes, taxable scholarships count as unearned income for the kiddie tax, so if unearned income is more than $2,500 and they are otherwise subject to the kiddie tax, they have to file Form 8615 - but only if they are required to file. For example, a student who is a dependent (so they cannot claim AOC for themselves), and has only scholarship income, would not have to file unless the scholarship income is over $13,850. But once they hit the filing requirement, any amount over $2,500 would require Form 8615.

Perhaps you need an IT professional to do some maintenance

I have always taken the entire amount on the Sch A. This year though we have a client who is angry with us because he went to Nev and won a small jackpot. He came in here all gung ho to deduct his losses. However, there is no way in the world that they can itemize. Wife is furious that they are getting a penalty. Days like this I really want to quit. My husband wants to call and fire them.

My federal acks are coming back within seconds. I send the e-file, click again to process it into "pending" and click again for the final "accepted" ack. I am curious as to what process changed at IRS or within our software to make this possible. Anyone else notice this? My DE state acks that used to take 24 hrs are back in ~ 2-3 hrs now too.

What is this link? an endless loop?

I think that the amount on the form 3922 will be the basis if/when the client sells the stock. It is probably restricted stock or not publicly traded so they may only have limited opportunities to sell. I have a client who did not keep that form, and it was a long conversation with her trying to figure out when she acquired the stock and what the basis was. Tom Longview, TX

In case anyone else wants to see it: https://www.irs.gov/businesses/mef-filing-error-with-form-1065-schedule-k-1-line-20-code-zz#:~:text=The Partners Instructions to Schedule,of Box 20 the partner Q. I receive an error in Form 1065, Schedule K-1, Line 20, code ZZ, when I try to electronically file the partnership return. How can I fix the error? (added March 21, 2024) A. The Partners Instructions to Schedule K-1 of Form 1065 for 2023 provide that Code ZZ “Other” in Box 20 contains “Any other information you may need to file your return not shown elsewhere on Schedule K-1.” If a partner receives a 2023 Schedule K-1 from a partnership with information in Code ZZ of Box 20 the partner should follow the Partner’s Schedule K-1 instructions in reporting this information on their return. There was a programming error impacting e-filers of Form 1065 for 2023 that blocked e-filed partnership returns from using Code ZZ. The IRS encourages e-filers to extend the filing of their Form 1065 returns and defer until June 16, 2024, when we estimate that the Code ZZ issue will be fixed and Code ZZ can be properly e-filed in Box 20 of Schedules K and K-1. Page Last Reviewed or Updated: 21-Mar-2024

The first thing to suspect when that kind of activity is going on, is a virus or other malware. This is the antivirus supplier I've used forever. https://www.eset.com/us/download/tools-and-utilities/

I take off the gambling losses up to the amount won on Sch A - I had a prior return - line 21 - "same day sessions line 21"- and they took off the losses incurred from the day of the win?? fine for 1 day but 20 w2-g's? 20 days! Has anyone heard of this? Never mind - I just looked it up -Yes from the same day!! thx D

If a single stand alone, no one really does. Repair or fixes, sure, but first letting the updates run, after they are done manually checking, until no more are left, is good to self do. Same with blowing/vacuuming (depending on one's preference/belief) is a self project. The random computer "expert" is likely going to connect remotely, run some sort of script, and may or may not fix anything, and may or may not cause more problems. One (in)famous "expert" service is well known for causing more problems, as their default is to do some sort of backup on removable media, a clean wipe and reinstall of Windows, then send you on your way with only their faulty backup to work from (they do not back up everything, just the common things, and they rarely help restore).

A loud fan likely means dust has accumulated inside unit. Shut it down, remove the cover and vac or blow out dust. It can also mean something is hogging CPU or memory. Ctrl/alt/del to bring up task manager than then look at processes to see if something is using up resources.

I try to manually checks for updates every Wednesday. I do it just before lunch, and let it run if needed. If you do not keep relatively current, there can be many updates needed, and in some cases, they are done in specific order, with multiple reboots some of the time. Another goodie is to reboot your modem (or modem/router) at least once a month. I am also using a consumer/pro grade physical firewall box (to allow two internet connections to be live at the same time and) to block access to places other than the US, incoming or outgoing. (I did have to add an exception for a game SWMBO plays.) Make sure you are not sleeping/hibernating/power off until the updates are complete, or they may have to start over. When I notice a significant update, after it is done, I will manually check again in case the new update triggers another. I do not use the option to get the latest updates quicker (a quasi beta tester). I do not use any third party "security" software, as such software is often the cause of issues - the security built into Windows is great as is, better than you can get third party if you setup correctly. My new fav, now that I finally am using Pro Windows, is the brute force safe bit locker drive boot pin, and the walk away with my phone computer lock. For the fan, look online for hints how to clean your air paths and fan. They do need to be cleaned out on occasion. For me, I use portable computers, and I prop them up to improve air flow, versus sitting flat on a desk or my lap.

So we can use the school estimate for living expenses as opposed to actual costs when looking at a distribution from a 529 plan to see if it was used for living expenses when at school (like a safe harbor) ? I had not heard that. Tom Longview, TX

Taxable scholarships count as earned income for purposes of the filing requirement, but once the filing requirement is met, they do not count as earned income for other purposes (such as EIC) - unless they are reported on a W-2.

Are these revocable or irrevocable living trusts? I believe that living trusts can be irrevocable, but I've never personally had a client with one.

Interesting. So possibly they are just giving the REASON for the excess basis a name, but the crux of the information is excess basis limitations. That definitely makes more sense to me than a CF SEHI deduction. Thanks!

I don't like to make payments for clients. They're on their own. If they want direct deposit for refunds, ok. Some few want direct debit for payments and they give me the date to enter. But I don't think I'm going any further than that.

ALL of you should do this to your windows 10 or 11 computer. Run cmd as admin, type sfc /scannow and press enter. (any corrupted file will be replaced) I do this every time I remember maybe once a month. To the poster: Remove ALL your printers from Windows. Restart your computer, install ONLY the printer that you use. Do that for a couple of days and see if there is a different. If you need to install other printers, do one every other day. Also do this: 1. Press Windows Key + R then type services.msc and hit Enter to open the Services window. 2. Scroll down & look for Print Spooler service and then select it. 3. Right-click on Print Spooler service then select Stop. 4. Press Windows Key + E to open File Explorer then navigate to the following folder: C:\Windows\System32\spool\PRINTERS 5. Delete all the files in this folder and then close File Explorer. 6. Go back to the Services window and right-click on Print Spooler service then select Start.

Its either wait or file on paper. But I don't think you can file p'ships on paper anymore? If you don't need code ZZ then I guess its fine?

Interesting question, I had never heard of it either. According to the Form 7203 instructions: "Loss and deductions in excess of basis are suspended and carried forward indefinitely and the character of the loss and deduction items is retained. Part III shows the pro rata allocation and tracks any loss or deduction carryforward." I could be wrong but I interpret this to mean that it's not a carryforward of a useable SEHI deduction but a carryforward of a deduction in excess of basis which disappeared when the corporation closed.

Bloomberg article today about the status of the bill. Still very iffy to pass or even come to a vote. https://www.msn.com/en-us/news/politics/bipartisan-78-billion-tax-deal-hits-gop-roadblock-in-us-senate/ar-BB1l5LVE?ocid=hpmsn&cvid=4aec1985a28f47e68dda2a10d5257964&ei=41 You can search it on MSN if you don't want to click the link. Tom Longview, TX

Refer to Reg 1.170A-7 (a) for a transfer of less than entire interest in property.

Why is the the living trust filing a 1041 while the grantors are still alive?

A trust doesn't have itemized deductions for medical. That goes on the 1040. For a van to be deductible, you must have a letter from their doctor and then they only deduct the cost of modifications.

Sch. 1, line 8r is specifically for taxable scholarships and grants. It no longer goes on Form 1040 line 1 as that is for earned income only.