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remember, @Eric gave us this one some years ago.

On t he theme of SALY - the Ceiling Numbers?

The quote below is from the 1040 instructions below the chart for most people and who must file. That being said, keep in mind that the IRS AUR system goes only by the gross proceeds received and so the taxpayer will receive a notice because it doesn't factor in the cost basis, so in this case I would file the return. Also, parents can't elect to report this on their return because Sch D cap gain transaction is involved. That election is only available if minor child has only interest and dividends.

I go by gross income, assuming the broken IRS doesn't have the basis or lost it or didn't add it to client's account yet or... It's faster to e-file a return now than to craft an answer to an IRS letter a couple years from now. Filing can also prevent (or uncover more quickly) ID theft.

Thank you, Eric, for your creativity, and thank you, Catherine, for reminding me of my favorite and most-descriptive-of-me-during-never-ending-tax-season emoji! And, it did pop up as Recently Used.

In Drake, to get the excess reported on form 1040 Line 4a, go to the income screen #3, put the excess amount on line 4a. Hope this helps.

Taxable. You can't rely on anything an IRS representative answering the phone tells a taxpayer, and especially if you were not privy to the conversation and know exactly what your client told the person or asked.

You know I re-wrote that post three times to get it to "Judy Acceptable" standards. Tom Longview, TX

Same as last year. Efile Rejects Tom Longview, TX

If it's been the 21 days and client calls me about their refund, I'm going to tell them to make phone calls to their Rep and both Senators.

Glad to be of assistance!

^^ what Terry said, and the earnings returned goes on line 4(b).

I don't think it goes to a different address. https://www.irs.gov/filing/where-to-file-addresses-for-taxpayers-and-tax-professionals-filing-form-1040-v

Excerpt from the form 8606 instructions: Return of IRA Contributions If, in 2024, you made traditional IRA contributions or Roth IRA contributions for 2024 and you had those contributions returned to you with any related earnings (or minus any loss) by the due date (including extensions) of your 2024 tax return, the returned contributions are treated as if they were never contributed. Don’t report the contribution or distribution on Form 8606 or take a deduction for the contribution. However, you must include the amount of the distribution of the returned contributions you made in 2024 and any related earnings on your 2024 Form 1040, 1040-SR, or 1040-NR, line 4a. Also include the related earnings on your 2024 Form 1040, 1040-SR, or 1040-NR, line 4b. Attach a statement explaining the distribution. Also, if you were under age 59½ at the time of a distribution with related earnings, you are generally subject to the additional 10% tax on early distributions (see Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, and its instructions).

I agree that the IRS staff answers incorrectly more often than correctly. The only thing I found on IRS.gov is from 2011: The money received is taxable and should be reported on Form 1040, line 21 as “other income.” https://www.irs.gov/pub/irs-utl/VTA_2011-08_Cash_for_Keys_Program.pdf I remember some changes during Covid. I don't remember specifics or whether any changes continued after Covid. Please post when you find a current answer.

March 2,2025 "The Treasury Department is announcing today that, with respect to the Corporate Transparency Act, not only will it not enforce any penalties or fines associated with the beneficial ownership information reporting rule under the existing regulatory deadlines, but it will further not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners after the forthcoming rule changes take effect either." "The Treasury Department will further be issuing a proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only." https://home.treasury.gov/news/press-releases/sb0038 These changes were like a leaky faucet, drip,drip, drip . . . . . . now it's gusher!!!

There's a Print Preference in ATX to add bookmarks to the PDF, but I whether the bookmarks show on opening a PDF, is a setting in whichever PDF viewer you're using (Adobe, Foxit, etc.).

R&D falls under the criteria of section 174. I doubt that your clients efforts for a credit would meet all 4 standards. If it is taken as an R&D expense it is amortized over 5 years. It could be a better choice to patent his modifications.

SALY is the best!

We named our dog SALY. Everyone thinks we mis-spell her name. My son, who was with us when we got Saly, actually named her. I was thinking .... Debit...Credit....Deduction....1040....Dependent My son blurts out "You should name her SALY". Kid listens very well to his parents. Tom Longview, TX

I don't think anyone should take a chance and push the limit. I have filed a few of this last fall and there is really nothing to it. I totally agree with the folks that say just be proactive and do it. I'm referring to smaller business entities. I have been following all of this closely because I am the Treasurer of our HOA and the rest of the board members have been holding out. I've told them let's do it and get it over with.

"WASHINGTON––Today, FinCEN announced that it will not issue any fines or penalties or take any other enforcement actions against any companies based on any failure to file or update beneficial ownership information (BOI) reports pursuant to the Corporate Transparency Act by the current deadlines. No fines or penalties will be issued, and no enforcement actions will be taken, until a forthcoming interim final rule becomes effective and the new relevant due dates in the interim final rule have passed." Well, that makes the March 21st deadline meaningless!

Yes, Tom, SALY

I don't know when it happened, but now the form is populating and you are 100% correct in the AMT having a bearing on this as well as he has a carry over of unused credit from solar from last year which also figures into this. So at least I see the whole form and can now explain to my client why he will not be receiving the credit. Thank You so much for running the scenerios for me, it is truly appreciated!

In the late 60's or early 70's there was a song called DOA by a band called BloodRock. Creepy song about a plane crash. Anyway how about "The Pencil Pushers" Not strictly Tax related but works.

Had she already paid ahead that it would be a refund?