Leaderboard

I am assuming that the cancellation of debt took place prior to husband's passing so that would show up on his final 1040. Your proposed use of 982 seems to be that you are building a case that he was insolvent at the time. The fact that he owed $17,000 and only had $2,000 of asset should prove that. The community state issue is very important to this set of facts. MFS would probably be the best way to go (again, assuming lack of community property rules). Be sure you have your facts documented. It sounds like their was a stripping of assets out of the husband's name for some reason. Be sure there were no joint bank accounts or other money accounts that might end up queering the insolvency issue. Talk is cheap. Ask the administrator for a copy of the estate or inheritance tax return is one exists. Those are my rambling thoughts on this beautiful Friday morning!

I don't know the rules for community property states, but if I follow the sequence of events correctly, the wife could file as single since the husband passed on in November and therefore she was not married on the last day of the year. She and the executor could elect for her to file jointly with her deceased husband, and I think that he would have to file either MFJ or MFS, but she should have the option to file either MFJ or S.

Have you considered filing MFS to separate the husbamd's income and assets from the wife's? Are you in a community property state, which might complicate this tactic?

Depends on the level of service being offered. I work as a financial advisor, and some advisors charge more because they do more than just manage money. Don't be so quick to jump to conclusions based on the fee itself

The proposed grant of authority to the Internal Revenue Service to regulate all aspects of tax practice is overly broad, the AICPA said in a letter to the Senate Finance Committee on Tuesday. The AICPA made specific recommendations to tailor the proposal to more directly target incompetent and fraudulent tax return preparers. The bill would also give the IRS authority to regulate all aspects of federal tax practice. Specifically, it would amend Title 31 of the U.S. Code to encompass all tax practice, regardless of whether it includes representation before the Treasury Department. http://www.journalofaccountancy.com/news/2015/sep/tax-return-preparer-legislation-201513013.html

NOD. It is the more restrictive. 90 days and you are done. Tom Newark, CA

In recent years, it has been the last Friday before Thanksgiving for personal returns. For business returns it has been the week before Christmas

The IRS does not close the door with a Notice of Deficiency; they will still accept and consider additional information. They will issue a written response and refer to the date your letter was received by them. I would get a copy of the letter from the client before proceeding and find out exactly how the IRS responded. You should still be well within the 90 day window to petition the tax court.

Income retains the same character to the beneficiary as it would have been to the deceased. Worker's comp would not be taxable to the parent and therefore is not taxable to whomever receives it.

Was it not settled while the estate was still open? Was this a personal injury lawsuit? Is some of the money for back wages? If it's taxable, it will be at the child's rates. Kiddie tax is just for investment income.