Hahn1040

look on the very top of the Schedule A page- where the blue writing is there is a field to put in Tax prep also for investment interest expense

unless it has changed recently: NO I know that I could not do it in the past. what I have done is: have one of them get the entire VA, then net the federal so that they each get their overall portion. Since she is the one "concerned" then, have her receive the VA refund. It generally arrives faster anyway. And then she gets a smaller federal refund because she received the entire VA.

Do any of you have recent experience with the turnaround time for the Adoption credit? My client is eager for the $11,000 refund. About half is from the Adoption credit. Will the IRS pull the return and scrutinize the adoption expenses before releasing the credit. I am considering suggesting that we file without the credit to get his regular refund and then amend for the Adoption credit. the adoption was final late in 2017. The child has an ATIN. the SS# was applied for as soon as the adoption was final. Would it make sense to wait for the SS#? They do not receive the Child Tax Credit or EIC. any personal experience will be greatly appreciated.

Several things to consider: AOTC can only be taken 4 times per student. Since this is community college with very little qualified expense, it may be beneficial to wait and take it later when tuition etc. are enough to get more of the credit. of course, part of this consideration is: Will the parent's income be too high to take it in another couple of years... in that case $900 now is better than zero later... You have to look at the actual payment history to see what was paid when. This could be a case that the scholarship was paid in 2017 but was for a course billed /paid in 2016 that had been reflected on the 2016 1098-T If scholarship is truly greater than tuition expense, then it is taxable to the student. (Don't rely on the 1098-T- look at the record of payments!) In many cases this is moot because it would not cause tax liability to the student. Scholarship goes on line 7 of the 1040. e.g. If student has $2,200 taxable scholarship and $3,000 W-2 wages and $10 bank interest. This is still below the standard deduction, so no tax liability for the student. I have a client who's daughter has 100% scholarship for college: tuition, room , board, even football tickets, plus another $10-$15,000 scholarships from other local places. I asked: Since her expenses are fully paid where does the rest of the scholarship $$ go: Dad's reply: "They give it to her in cash" She has quite the tax liability! He is happy to pay the tax. See Pub 970 starting on page 15: Coordination with Pell grants and other scholarships. for detailed explanation of taxing the scholarship for student in order to free up the tuition expense for the parent.

Thanks! I needed that! Huge help to save steps (and keep the dates consistent within the return)

Add image of signature to ATX forms: save your scanned signature on your computer go to "customize master forms" open form you want to add signature (1040, 1040A, 8879 etc.) from edit select "Insert Picture" click the area for preparer's signature find your scanned signature select it click the image to resize so that it fits into the block save custom form close custom form the image will cover your printed signature in the block. that way, you can keep the box checked to add your signature to forms and have this customized on your 1040 etc.. Not all forms will take it. Many states will not. For Virginia, I can do it on the 8879 but not on the regular form. I could not get it on the MD forms. I did not try other states. Now I have to remember how to insert the date on the 8879 by entering it one place ( I think on the 1040). Someone gave that tip previously.... Oh the challange of trying to remember things that you only do once a year....

I have done it in the past. Have not yet set it up for this year. When I "remember" I will post it.

are you using ATX? on the Schedule E look for the "loss limitation worksheet" tab. that gives you the field to enter the prior year carryover. if there are more than one property you must select property at the top of the page to enter for each property

do you use ATX? if so, check page 2 of the 6251. I have some returns that page 2 is not populating and thus AMT is calculated. Page 2 is where it adjusts for capital gains and qualified dividends. Once the figures from page 2 are entered, the there is no more AMT. This is not the case on all of my returns, but i have a handful with this issue. I figure that it will resolved eventually with a forms update. This may not be your issue, but it is worth giving it a look.

From your details, it appears that he is a qualifying relative and the parents are entitled to the dependency exemption and also the AOC. Pub 970 states : Who Can Claim the Credit? Generally, you can claim the American opportunity credit if all three of the following requirements are met. You pay qualified education expenses of higher education. You pay the education expenses for an eligible student. The eligible student is either yourself, your spouse, or a dependent for whom you claim an exemption on your tax return. Note. Qualified education expenses paid by a dependent for whom you claim an exemption, or by a third party for that dependent, are considered paid by you. It does not distinguish qualifying child vs. qualifying relative. If the parents' income is too high for them to receive the credit (over $180,000) then you could consider having the student file and claim the refundable portion, He can only do this if the parents do not claim him and he does not claim himself.

I just got a call and was told that: MY Social Security number is going to be suspended due to fraudulent activity in Texas. I should call 254-236-6149 to take care of it. This one is new to me. Have any of you experienced it?

thanks so much for your input. I can't help but think that FIL took the loss in 2003 when he "sold" it to the son-in-law. Why else would he have done it??? MY client had no use for a piece of raw land in a neighboring county. Truly, I would say that FIL told him "I'm giving you a piece of land; sign here" and Client said "yes sir." I am fairly certain that $20,000 did not change hands. Client would not have had that kind of cash. When I talked to Client last week, I had not yet looked up the county records, so i was approaching it as a gift since this is what client believed. I had told him to get FIL to get with his accountant to give us the cost basis. Eager to see what FIL accountant comes back with! County records show assessment in 2003: $158,200; 2017 it is $318,000 FIL set up the sale and arranged all of the details. sent the paperwork to son-in law to sign. what about the zero interest for five years? I would think that imputed interest comes into play??? and can the note be payable to three people who did not own the property? is it simply a gift from client to wife and siblings? for first 5 years, it is not an issue because each third will be less than the annual limit. At balloon time, though..... gift tax return... again, thanks for your thoughts!

Daughter did not own it only son-in-law was on title I'm sure he never set foot on it. I'll bet that if he drove by there, he would not know what was "his".

I think that some of you will have some fun with this one: Client and WIFE call Friday to tell me some info that they wanted to share ahead of tax season since they feel it will impact their taxes. Father-in-law (FIL) had sent them the closing paperwork for some property (raw land) that he had sold. Client tells me that FIL had given it to him several years ago. He doesn't know any of the details; just that FIL had given it to him and yes he had signed some paperwork. We discussed cost basis; he had no idea. So... last month FIL sells the land $265,000 it is an Installment sale no interest payable for 5 years then a balloon it is payable to WIFE and her two siblings (none of them had owned the property) I looked up the county records for the land: FIL had purchased it 1992 for $298,300; "sold" to Client 2003 $20,000 for the record: Client and WIFE are happily married, so no issues there; FIL will give them the money for any taxes due. He is not trying to take advantage of them. AND I am NOT FIL's accountant! What fun!

Those were my exact sentiments for this client I am working on! The SSA and the OPM 1099Rs.... at least with the 1099s, there are several copies ... so when they have ripped off half of the figures , at least there are other copies that may have the figures intact

I love it when they take the stuff out of the envelopes (that they had opened with the yard shears) and then staple the one piece of paper that we need to the envelope along with all of the other contents of the envelope.... and then they make notes on the paper and the envelopes.... so you don't dare toss the stuff!

if it weren't for the fact that it skewed the mort int and re tax deductions, you might could attribute it to the the philosophy of it being easier to just put it in than to explain why you didn't. the preparer had to do the math to see if it saved any... might as well leave it in. How many of us always put the tax prep fee on line 22 even though for most people it has no tax savings. heaven forbid we leave off the safe deposit box. THEN You get the call: "You left off my safety deposit box for $25". (That is where they keep the quick claim deeds and the physical year reports)

yes the 8829 is the problem. It is not used when going to the 2106. seems odd to manipulate the program to get it to do something not in the best interest of the taxpayer.. Can't help but wonder if the preparer did not know or was inflating billable forms.

for a Home Office on the 2106, the Mort Int and RE tax are not allocated to the business expense. they remain on lines 6 and 10 respectively. When using the form 8829 that goes to Schedule C, then yes the Mort Int and RE tax are reduced on the Schedule A. On the ATX worksheet for the Home Office input there is a note at the top that says: Per Pub 587, mort Int and RE tax for employee activities are deducted in full as personal items on Sched A. These amounts will not allocate to an employee activity. Still, even if it is not reducing these deduction on the Schedule A, I agree that it doesn't make much sense to deduct them if the total is not greater than the 2% of AGI. Perhaps it is a case that the income fluctuates from year to year so they just calculate them every year to see if they help. Certainly the AMT is also a consideration for federal. But in some cases even if there is no benefit for fed because of AMT there is for state, Of course, if the total is not over the 2% then no savings anyway.... but some people will do it because they can charge for the form... .

the key is that they are receiving a series of substantially equal payments over their life expectancy or if joint beneficiaries over the joint life expediencies. Lots of people retire before age 59 1/2. when paid as an annuity it is not premature; a one-time distribution is premature (unless there is an exception)

I had one of those. Like you, I knew it was qualified (he is 68 and contributed to the ROTH 100 years ago... well in 1998 anyway) I know his cost basis, so i put that on line 22 so that there is no taxable. Now... if the cost basis is less than the distribution, then that won't be a fix. of course, the real fix is to get a corrected 1099-R.... but we all know how well that will go...

Longtime client has a disabled son, so she was advised to set up a trust for him. She asked me if the legal fee she paid to set up the trust in 2014 is deductible. She did not ask me in 2014. She paid another $3,500 in fees in 2016 because it was not done properly in 2014 when she had paid $6,000. I asked her, "What is in the trust?" She has no investments. The only asset she had was her house which she sold in 2016. Her income is a government pension and Social Security. She told me she has a life insurance policy for $400,000 that is for the disabled son. She gave the not disabled son $200,000 from the sale of her house for him to buy a house. So she has about $10,000 in cash remaining. For this she paid $9,500 in legal fees!

Thank you yes, I have been researching that aspect of the gain. However, I still can't see the value of spending $20,000 to improve a house that is to be torn down.

I wanted to take the opportunity to thank the people who, last year, had suggested using Nuance to convert our ATX pdf organizers to fiillable forms. I bought it for last tax season and really appreciated having this tool. Now, after a year of experience, I am so pleased to have this capability. It helps make a useful and professional looking organizer to send to my clients. thanks so much! The information that people share is so valuable!

Client sold a piece of land with a house and a store to the state of TN for a new road. she had been in negotiation with the state for almost three years for the price. During that time, she spent over $20,000 on the house to "Increase the market value, so they would pay more" They finally settled in 2016. They did not pay any more than first offered. so during that time, she put on a new roof, new carpeting, $7,000 carpentry... all for a house that will be torn down? She and her brother had inherited the property from Daddy in 1984. Of course, she has no records of value of any of it back then. (she is working on it) Brother gave her his half some years back when he was going through a divorce. So now she gets to pay tax on the entire gain (she is already in the 35% tax bracket before this) and then she will gift him his half of the proceeds. Family had lived in the house off an on over the years. No one was living in it at the time, so no real need to keep the house inhabitable... Yikes! Why didn't she just sell it to TN when they first asked instead of putting all of that money and time into it!!! Rant over....