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Does the 1099R have the code P in box 7 indicating that it is a distribution in 2014 of excess contribution taxable in 2013? I think that if it is coded correctly, the IRS will match it to the correct year. (I hope I remember the code correctly - I don't have a 1099R in front of me, but I know there is a code for a distribution received in one year and taxable to the prior year.)

I'd file. If for no other reason, it at least starts the SOL running. That way, if it later turns out he forgot to tell you about some income, you're either filing an amendment to a timely-filed return or else the SOL has expired and there's no risk to anyone. This is even more important if the person has any sort of brokerage account. Personally, I never tell someone they should not file if I have a client relationship with them (except for those who have received a letter from IRS saying they don't need to file.. It isn't about collecting a fee - it's about limiting potential liability.

Calendar year can be a powerfull tool for timing expenses to income. Also keep in mind the option to elect accrual method of accounting.

Her attorney should work with his attorney on getting a corrected 1099 issued. You may still have to expense it out to get the 2014 return completed by 10/15. But longer term, the corrected 1099 will be best.

mrichman, you have a calculation nightmare on your hands. I can give you some insights into the basics, but the devil will be in the details. When the parent turned the home over to the siblings and retained a life estate, a gift tax return should have been filed. If you can get your hands on it, you're halfway there. Basically, the parent's basis in the home and its FMV enter into the equation. The value of the share of the basis s/he retained is calculated using actuarial tables the IRS publishes. Essentially you look up his or her birthdate and use the factor in the table to calculate the part she retained. The remainder is split between the three siblings. Your client's basis is that number, and gain or loss is calculated from there. A loss will probably not be allowed because your client's share was sold to a related party. There is a catch when it comes to gifted property. If the FMV at the time of the gift is less than the donor's basis, gain or loss is figured differently. Good luck!

Thank you , Judy. Everything worked out ok. It is the ATX 8824 work sheet that gave me fits. Now I see that I was overthinking it and making it more complicated than it is.

I would amend the returns. Although there will be no refund received from 2011, any time there is a change in income, deduction or credit, amendments should be filed. While this is a carryover that you say will not affect the outcome of other years, the c/o had the potential to reduce income. It will also give the IRS the proper paper trail and flow of the loss carryovers from year to year that you can point back to in the event it is ever questioned. Also, be sure to include the 8582s on an AMT basis too because the IRS has no way of knowing how much the 8582 calc'd on the AMT may differ, and I've had the personal experience of amended returns being held up in processing and questioned because the AMT calcs were not included.

To indicate full-year coverage, be sure to check the box on the 1040, pg 2, line 61. It's to the left of the column. jmdaviscpa's answer above is correct. She is not eligible for the PTC so all will be paid back without limitation. Fill in the 8962 monthly, no need for the 8965. ETA - I'll be moving this topic to the health care section later on, but leaving it here for now so Lion can easily find it.

Yes, it does have the Code P. OK; will leave it off of 2014, just amend the 2013, and see if there are any letters. Thank you!

Yes, she has to pay back all the PTC advanced payments. You do the 8962 monthly so the period she was covered by employer doesn't come into play for the PTC. It does come into play about being covered all year on the 8965, which probably doesn't need to be filed in this case.

Besides, do you really know you have "all" the paperwork? Sounds like a disorganized client.

See Reg 1.1014-5(a): (2) Except as provided in paragraph (b) of this section, the proper measure of gain or loss resulting from a sale or other disposition of an interest in property acquired from a decedent is so much of the increase or decrease in the value of the entire property as is reflected in such sale or other disposition. Hence, in ascertaining the basis of a life interest, remainder interest, or other interest which is sold or otherwise disposed of, the uniform basis rule contemplates that proper adjustments will be made to reflect the change in relative value of the interests on account of the passage of time. (3) The factors set forth in the tables contained in §20.2031-7 or, for certain prior periods, §20.2031-7A, of Part 20 of this chapter (Estate Tax Regulations) shall be used in the manner provided therein in determining the basis of the life interest, the remainder interest, or the term certain interest in the property on the date such interest is sold. The basis of the life interest, the remainder interest, or the term certain interest is computed by multiplying the uniform basis (adjusted to the time of the sale) by the appropriate factor. In the case of the sale of a life interest or a remainder interest, the factor used is the factor (adjusted where appropriate) which appears in the life interest or the remainder interest column of the table opposite the age (on the date of the sale) of the person at whose death the life interest will terminate. In the case of the sale of a term certain interest, the factor used is the factor (adjusted where appropriate) which appears in the term certain column of the table opposite the number of years remaining (on the date of sale) before the term certain interest will terminate

here is the link again. just tried it and it worked fine http://www.susanmooney.com/?page_id=530

Yes, withdrawals and non-business expenditures are most often distributions. Make sure to calculate basis on the K1.

That's not an error message but a footnote that's actually been required since the tax act of 1986 and fall within the scope of sec 263A interest cap rules and the related party rules. The article below gives an overview of when costs are required to be capitalized, possibly even some costs outside of the partnership. It also talks about when capitalizing might not necessary under deminimis rules depending on the level of ownership but that related party rules must be considered before making a final decision on that. http://www.gilaberttax.com/2013/03/26/avoided-cost-k-1-footnotes/

GREAT! That did it. Thank you.

Instructions for form 8962 say that if over 400% of FPL, complete only column F for either line 11 or lines 12-23. Perhaps that is the problem.