Hahn1040

I would appreciate suggestions for resources / references for reporting bond interest: including OID instruments i have just a couple of clients who invest in such bonds. For the most part, I can go through the 1099 and plug in the info on the 1099 worksheets and it flows to where it needs to be on the tax return. Still, it seems there are inevitably one or two items that i am unclear on.... (market discount, bond premium, OID accrual...) One of these clients with a large portfolio of stocks and bonds (both taxable and tax free) died last June. I encouraged the son to get the broker to transfer the securities into an estate account. That did not happen.... the 1099s for 2017 were issued in the deceased name and social security number. ($38,000 dividends; $12,000 tax exempt interest; $5,000 OID) All of the securities were sold in February 2018 to distribute the cash to the heirs. i am working on separating the income for the 1040 and the 1041. of course, the stocks are easy because i have the statement that shows when the dividends were paid. But some of the bond interest is killing me- with accrued interest etc. the broker did provide a listing of the value of the securities as of the date of death. again, it is straight forward for the stocks, but for the bonds, I am unclear about how the interest accrued and/or paid impact the cost basis... I have a general understanding of how these things work but I would like to have a resource to consult to gain a more in depth understanding. A textbook or article would be great to use to work my way through these. Something with examples would be great so that I could follow along to see how it all fits together. Thanks so much for your help! I do appreciate any guidance!!

BAH and BAS are not reported on the W-2 at all. They are not subject to FICA and Medicare. That is not the difference. If you want to know the reason there is a difference, ask to see the 12/31 LES (leave and earnings statement). That will show all of the various sources of pay and you can see what is included in taxable wages and what is not. You will see that there is one of the types of compensation I described above: bonus, flight pay, medical differential etc.

When taxable wages are greater than social security wages, it could be one of several types of pay: bonus such as a reenlistment bonus or medical specialties, or other bonuses flight pay incentive pay for doctors, submarines or other specialties with combat pay: taxable wages are lower than social security wages

... and the client should have some skin in this. He/she signed it as a complete and accurate return classic example of client signing without even giving it a look. With even a cursory exam, you'd think he would have noted: Hey! what about all of that investment activity???

no additional assets; no bonus depreciation just the house all those years. He used a paid preparer but went to a different place almost every year. He is military so some years he was in HI another in VA. He went to the same chain the first three years. Acting on Gail's suggestion to get the return from the previous preparer, i called an office of the chain and asked the logistics of getting the return. So, I have sent him an email with instructions to go to the former tax office and ask for his 2013 return. I will be curious to see if he takes the time to do it. Both he and the wife must sign the form for the request.... some would consider that too much trouble....we'll see... I told him that without the actual figure from the return, I would use the 2012 figure. He had gone to the same office of the chain both 2012 and 2013. I figure that they would have had his previous year's history there at the same office so there is some chance of consistency. Unfortunately, that was the highest of all of the figures. (Full purchase price land and all) whatever it was they took... i will add it all up and that is what gets recaptured. with the rental house sale , now he owes over $82,000... I didn't tell him that yet....

oh yes! they have taken too much! no additional assets added- house only the entire time 2012: used purchase price (including land) ; 2014 was the only year that looks like what it should be ; all of the other years has a cost basis (greater than purchase price) with nothing to back it up. He had not done any improvements; if anything the FMV, when he started renting it, was less than his purchase price. ... so i just guess???.... do i guess high or do i guess low...ugh! and... he already owes $70,000 before i put in the rental

How much detail is on a transcript from the IRS? Would it show that details of the Schedule E or just the net figure on line 17 of the 1040? I have a new client who sold his rental house. I had him bring me all of the tax returns from 2011 when he first rented it. The depreciation is different for every single year! The issue is that he does not have the Schedule E for 2013, so I don't know how much he took.... Generally that would not be a problem because it should have been the same as 2012 and 2014. His returns show 2012: $9,635; for 2014 $8,181...perhaps it was something in between 2015 $9,125! If a transcript would show the details, then it would be worth pursuing that route... thanks so much!

yes Use code L for nondeductible loss that will zero out the loss for you

ATX has a good worksheet for sales tax It automatically add in the things it knows: nontaxable part of social security and pensions, nontax combat pay (Q in box 12 of W-2); there are spaces to add in for other things such as VA disability, etc. then you have to adjust for the local rates. The ones I do all of the time, I know already. But for other places, I go to the IRS online worksheet and plug in the figures then I find what the local rate is and I can put that into the ATX worksheet to get it to match the IRS figure. If any of my income figures change later, the program adjusts for it because I have already put in the local rate etc. Be sure to add in for sales tax on a car boat etc. there is a box to check to take sales tax vs. state tax. This is very useful when you have someone with AMT and sometimes it saves on the state return to use sales tax when AMT has negated the state tax deduction on the federal. Of course, you have to look at it both ways- some times one is better other times not... depends upon how far they are into AMT... And of course, for some states there is no advantage.

And they all want a BIG return... you know ..a BIG tax return where they get a big check! Oh you mean your tax refund...

my new response when I ask for interest income and I get "those answers": it's hardly anything I didn't get a form it is less than $10 the bank says I don't have to report it of course, I have already gone through the spiel: "If it is less than $10, then the bank does not have to report it to you; but you have to report it to the IRS. You have to look at your year-end bank statement to get the figure". ...so, you didn't get a form... it is less than $10... so $10 per account will cover it that has gotten a few people to look. And yes, sometimes it is .12; and sometime $2.37 and makes no difference (but it goes on the return!) but sometimes it is $37.12 and they "didn't get a form" because it is online and they didn't look . As we all know..sometimes $2.37 does make a difference. Ugh! knocked them out of Tuition deduction of $2,000 for that $2. But it has to go on the return!

The point is: the child is no longer a dependent. At age 24, she is no longer a qualifying child. As a qualifying relative, she cannot have income over $4,050. The credit or deduction goes with the exemption. The parent cannot claim the daughter, thus they cannot take the credit. She claims herself and take the credit or deduction that she qualifies and saves her the most.

the husband is active duty military. He is a FL resident. He remains a FL resident unless/until he changes his state residency or he separates from the military. The spouse could possibly come under the Military Spouse Residency Relief Act of 2009(MSRRA ). If she were also a resident of FL and she lived with him under military orders. However, we don't know if she is (was) a FL resident, but from the post, I think that we do know that she was not living in the same place as the active duty husband, so the MSRRA does not apply to her and she is just like any other civilian: She is a resident of the state where she lives and works. My understanding is that she worked in PA all year, so PA would tax her earnings whether she lived there or not. It is PA source income. Those of you who know PA and NJ well will know the process for those that live in NJ but work in PA.

Generally For military retirement divorce, the spouse pays the ex for a few months and then the payment is made directly from DFAS (Defense Finance Accounting Service). You will want to look at the Retiree Account statement. This will show an amount deducted as FORMER SPOUSE DED. it is on the right hand side of the page. How long have they been divorced? I have people who have been divorced for over 20 years and they are all paid directly from DFAS. It would be very unusual for him to still be paying her directly after the first few months. I'm not saying it can't happen, but it is not the norm.

I have a family member who owns a condo in downtown Chicago. His two parking spaces each receive a separate tax bill. I should ask him if there is a breakdown of land vs, improvements. The parking garage is in the lower levels of a high-rise building, Certainly there is much more to it than just a piece of land: the structure of the parking garage. For your condo owner, it is probably similar. Ask what the tax bill shows.

(h) is over $500- that is why I put in e f and g e and f are on the form..... g was always on the form in the past.....

When I fill our the worksheet for 8283, the entry in (g) (donor's cost) does not appear on the form. all of the other sections flow to the form correctly but not (g) . I know that you only need (e), (f), and (g) when f is over $500. I have been editing the pdf to add in the figure before I send it to my client. So far, I have not filed any. I am concerned that the IRS won't receive the figure. I have had this issue with several clients. anyone else experiencing this?

from Pub 17 Qualifying Relative Four tests must be met for a person to be your qualifying relative. The four tests are: 1.Not a qualifying child test, 2.Member of household or relationship test 3.Gross income test , and 4.Support test . Age. Unlike a qualifying child, a qualifying relative can be any age. There is no age test for a qualifying relative. Gross Income Test To meet this test, a person's gross income for the year must be less than $4,050. Gross income defined. Gross income is all income in the form of money, property, and services that isn't exempt from tax. In a manufacturing, merchandising, or mining business, gross income is the total net sales minus the cost of goods sold, plus any miscellaneous income from the business. Gross receipts from rental property are gross income. Don’t deduct taxes, repairs, or other expenses to determine the gross income OF course all of this changes for 2018 when there are no more exemptions....Has anyone seen what they will use starting in 2018?

$4,050

the reasoning is that when faced with an RMD, the t/p can designate the charitable donation rather than taking the taxable distribution. for the 65 year old, the distribution is not required. That person can just leave it i the retirement account and not have a taxable event.

The W-2 indicates FL. Thus, the service member has changed his state of residence to FL. He no longer has a filing requirement for PA. Active duty military can maintain residency in home state unless they take the steps to change it. MANY military become residents of FL and TX while stationed in those states so that they do not pay state tax. Of course, there are other states with no state tax (WA, NV, NH) and those that don't tax active duty when they are not stationed in the state. PA does not tax the military pay but it would tax all other income. FL has no tax, so no state tax at all. If spouse is also a FL resident, then both would not be taxed by any state that they are stationed.

they could certainly claim a loss!

while looking through Pub 525 for something unrelated, I read this: Stolen property. If you steal property, you must report its fair market value in your income in the year you steal it unless in the same year, you return it to its rightful owner. I would live to know if anyone here has ever had occasion to include this on a return!

First check the actual financial transcripts from the college to see what was actually paid when and when the scholarship was applied. In many cases the timing of the scholarships and tuition do not coincide with the 1098-T. If the records show that, in fact, the scholarship exceeds qualified tuition, then it is reported on the Child's return. It goes on line 7. The standard deduction will take care of most of it. For $8,000+ there will be some taxable. at 10% tax- not bad for "free money"

just downloaded updated forms did not look for all of them but you can now enter PMI