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Except for fuel cells, the 25D credit is not just for the main home. The solar credit is for any "property which uses solar energy to generate electricity for use in a dwelling unit located in the United States and used as a residence by the taxpayer." So vacation homes, etc. qualify. Only for fuel cells does it say "principal residence". The Form 5695 instructions say:

It's very difficult for a person to understand something when they recognize that understanding it is going to cost them money.

I'm glad I'm winding down.

I plan to retire next year, and the only thing I will keep is trusts and estates! To each his or her own. Jasdim did not make a mistake. The client did, but blames the preparer of course.

That means you will have more time to share your knowledge with us here!

My panels are on my 'extra' building. Holds my hubby's game stuff, tv & stereos. I look at it like if the panels were on land next to the house. The panels are for my 'main home'.

First question I have is how much money are you talking about? A couple thousand bucks of ladders and drop cloths and stirring blades? Or tens of thousands including scaffolding and compressors and sprayers? If the latter, and they honestly don't have invoices, send them to get you (1) a detailed & annotated list including item, who purchased from, for how much and when, and then (2) prices for new same-type items from Lowes or Harbor Freight or specialty suppliers, showing prices. If comparing those two shows a reasonable price paid for used - as opposed to new - equipment, then I would accept it. After reading them the riot act (in print - and get them to sign & date that, give them a copy and you keep the original) that they are never, ever, to buy substantial equipment again without at least a sales receipt showing date, amount, what, and from whom purchased. If the former, I'd still do the letter riot act, and have them bring price sheets for similar ladders etc., but not necessarily require as strict an itemized list. If that means they go on extension while they dredge this all up, that is not your problem, but theirs. Of course, if you think they're cheating, or that they stole the equipment, hand 'em back their docs and wave bye-bye.

How do you explain to an arrogant client who withdrew $68000 from his retirement account to purchase a new truck.; that if he had taken out a loan; it would have cost him a lot less than the $14,000 Federal tax withheld and the $3600 that he owes the state? His wife was furious when they picked up their return. She is the one who pays in the perfect quarterly estimates because she is self-employed. Again; they know that we are here all year long, but think they know better. I am so tired of certain people and his arrogant reply was "Well, you have to live life." I hope he enjoys "living life" when they retire and he has no retirement income left to draw on. (Rant over)

Per IRS (also supported by case law): Topic no. 414, Rental income and expenses Security deposits – Don't include a security deposit in your income if you may be required to return it to the tenant at the end of the lease. If you keep part or all of the security deposit because the tenant breaks the lease by vacating the property early, include the amount you keep in your income in that year. If you keep part or all of the security deposit because the tenant damaged the property and you must make repairs, include the amount you keep in that year if your practice is to deduct the cost of repairs as expenses. To the extent the security deposit reimburses those expenses, don't include the amount in income if your practice isn't to deduct the cost of repairs as expenses. If a security deposit amount is to be used as the tenant's final month's rent, it is advance rent that you include as income when you receive it, rather than when you apply it to the last month's rent.

Thanks for the reply, Tom. I've always understood that even with a cash-basis taxpayer, a security deposit is not treated as income at the time received provided it is intended to be returned to the renter (minus any damages) at the end of the term, but is treated as advance rental income if the contract calls for it to be applied to the last rent payment. But I'll be interested to hear what others might say about this as well. I suppose part of the answer depends upon the language in the rental agreement.

I'm such a dunder brain. Client withdrew $250,000 from an IRA and had no withholding, but there is no way he can possibly owe taxes because he withdrew it over several months and not all at one time. Absolutely no way. After a 30 minute conversation (30 minutes that I'll never get back) and haranguing my staff for another 30 minutes, unfortunately, we still do not understand. I wish I were better at my job. Do you think if I recommend one of the big box preparers they might have someone who could understand more easily? I would say Rita hugs all the way around, but I'm in no mood to be that close to him or his offspring, who came to join the 'this has to be wrong' chorus. Happy Wednesday.

Panels are next to the house, connected to the house, for the house. Lots of reasons - including structural and where the trees are - influence the location of the panels. I would not hesitate.

Not bad at all in this case. Calling about a CP 220. The issue, from what was shared by the person on the other end of the phone was not receiving a Q2/23 941, and two Q3/23 941. Whether or not I believe that is not material, they gave me a quick solution (file a copy of the Q2 form, and a Q3 941x. On the other hand, I don't believe the information was actually accurate, but I did not press (as I usually like to do for "fun"). I suspect they somehow read the Q2 form as for Q3, and the Q3 as a second form (which is absolutely allowed, mult forms for the same time from one FEIN). The phone rep did know about the lack of free 941 efile, and agreed with me folding 941 into IRIS or similar would be great. She actually listened when I told her what it takes to offer 941 efile (I have explored it several times), and understood why it is not currently free. Ironically, I will likely be paying someone else to efile these needed items, for expediency.

I remember taking payments to the bank with the voucher. Then it was the call in to the IRS and we had a "cheat sheet" that told you what you were supposed to enter at each of the prompts. Ahhhhhh......the good ol' days Tom Longview, TX

NECPA, that is a heavy load that you are carrying. I hope that you have family or close friends that can help you.

I could not do it - pay someone else. I mailed the form.

Remember when you would fax a number, and they would fax you back a form you needed?

Years ago, the IRS had an interactive phone system where I filed my 941s using the keypad on my desk phone

When there is a breach, they will tag everyone involved with a tax pin forevermore, whether their identity was stolen or not.

My approach on rental deposits has always been that the amounts received are income (because the IRS says it is for cash basis taxpayers) and the return of deposits to the tenant at the end of the lease is an expense. I put it on the other expense section of the Sch E as "refunded deposits". That looks like your second option. Tom Longview, TX

If the estate actually did not own the real estate, then those expenses are just distributions to the beneficiaries.

I don't see how $10,000 is going to go very far in reducing $200,000 of income. Although if $10,000 was paid after the transfer to heirs, then it might be considered a distribution in lieu of cash since it was to their personal benefit.

Did the estate distribute the house to the heirs? "took possession" is theft if it is owned by the estate. Who is named on the title of the real estate? If it is the estate, then the estate is the only one who can sell the property. If the estate distributed the real estate, then the heirs owe the estate for the repairs the estate paid for. I would put a timeline together of the transactions, because this sounds like a cluster in the making. Tom Longview, TX

My daughter gave me a placard for my desk that reads, "I can explain it to you, but I cannot understand it for you."

Someone told him about the 72(t) rule that can avoid the 10% early withdrawal penalty if the distributions are determined as a series of substantially equal periodic payments, and he heard it as "avoid tax" and never made it all the way to how the payments must be determined !! You can bang your head against the wall or give him a Rita hug, but he knows he will "avoid tax."

I used to teach taxes (first for Tax-Aide, then for HRB and local chapter of FSEA) but somewhere along the way I apparently lost the ability to explain taxes to anyone.

I'm glad that I'm heading out. One of my elderly clients wanted me to show her how to prepare hers online because she used to prepare hers by hand 40 years ago. She now has tons of investments and retirement income. I should have taken some of your advice and bowed out earlier, but the new medical bills are piling up. Hubby is back in the hospital again and can't come home until they can get home oxygen here. Now we have to take our puppy down to K State, for a possible liver shunt.