jasdlm

From IRS FAQ on Stimulus Payments: Q. If an individual dies, what happens to his or her direct deposit or stimulus check? A. Stimulus payments will be issued in the name of the individual eligible for payment on a filed 2007 income tax return or to the account designated by the individual on that return. This includes situations where a person dies after filing a return or where the final 2007 income tax return was filed by a personal representative or surviving spouse. Any issues or concerns involving a decedent's filed return or the related stimulus payment should be addressed by the legal representative of the decedent's estate. See Publication 559 for more useful information for survivors and personal representatives. [updated 3/17/08] *** Looks to me like they're going to issue the check in the decedent's name, no matter what, and that at that point you can return the check along with 1310 to request reissuance in name of estate so Executrix can endorse. Sheesh . . . sounds like a real pain. Does anyone else have differing information? It sounds like all of us who have clients who died leaving spouses are going to have to go through this charade, also, as the checks will be issued jointly. Please somebody tell me I'm wrong.

From Publication 559: Form 1310. Generally, a person who is filing a return for a decedent and claiming a refund must file Form 1310 with the return. However, if the person claiming the refund is a surviving spouse filing a joint return with the decedent, or a court-appointed or certified personal representative filing an original return for the decedent, Form 1310 is not needed. The personal representative must attach to the return a copy of the court certificate showing that he or she was appointed the personal representative. If the personal representative is filing a claim for refund on Form 1040X, Amended U.S. Individual Income Tax Return, or Form 843, Claim for Refund and Request for Abatement, and the court certificate has already been filed with the IRS, attach Form 1310 and write “Certificate Previously Filed” at the bottom of the form. *** At the end of the pub, it does say the final return can be efiled by the executor; it doesn't say anything about how you get the Court appointment that is supposed to be attached to the return in that situation. I agree with JKL . . . efile it, and attached the Letters Testamentary to your 8879 for your records.

I don't think that you need the 1310. You need to attach a Court Certified copy of the Letters Testamentary to the return. Executrix signs the return.

Janitor Bob - Powers of Attorney are void at the death of the grantor (of the POA). Can she sign as personal representative? Does she have letters testamentary?

Do you mean box 20? If so, it's probably just a principal distribution; info needed for partner's basis, but not for 1040.

Client drops off tax information. Includes a $25 off coupon for Jackson Hewitt. (yes, it really does say 'get a refund faster than you can spend it'). What is this client trying to tell me? Sheesh

Thank you very much for your response. I couldn't figure out how this fit with the rules, but like I said, the previous preparer has much more experience, and I was afraid I was missing something.

Client is new to me. Previous tax preparer took HI premiums (paid by Wife through her employment at the University) on line 29. I did not think he was eligible for the deduction, since he was eligible (and in fact did participate) in wife's employer's subsidized plan. Previous prepare is a very well-respected CPA who has been practicing far longer than I have, so I am questioning my understanding of the rules. The employer plan is subsidized, but only to the extent of the employee's coverage. (University pays part of Employee's premium; allows family policies, but only pays same portion as if employee was single). Is my client's premium deductible because technically it is 'not subsidized', even though it is one plan for which client's spouse is subsidized? Any advice is appreciated.

I won't know how long it goes with no posts, because I can't log onto MY ATX and haven't been able to at all this year. (E-mailed but only got the standard 'we'll answer you within 48 hours' autoresponse) Those of you who can access it will have to let us know.

I never have been able to access MyAtx, I haven't received any of my 'hard copy' reference materials, and it's 27 March. It's midnight; I want to look something up and I have no book, and I'm really grouchy. Did anyone else NOT get what he/she ordered?

Client owns farm ground (and bought more in 2007) that is part of a family farm. Previous preparer did as follows: Pasture rent recorded on schedule E. Type of property - Farmland Approximately $3000 in Farm expenses on Schedule F. Only Farm income, $120 patronage dividend. New twist: For 2007, client has in addition to approximately $3,000 in 'farm expenses', a 1098 from Far Credit for $10,500 worth of interest on the additional land he bought. I can't get my head around taking almost $14,000 in deductions against $120 patronage dividend. Obviously, it would help my client, but it doesn't seem right. I'm at a loss with regard to what to do. Also, is it accurate to report the pasture rent on schedule E? Thanks for any guidance. I don't have many farm returns, and certainly none like this.

What work sheet are you using? I have an 11 page pdf that I received and used for my client. Is this the CNL worksheet you're talking about?

I have two of these. I have been entering full expenses and then entering personal use by number of days (i.e. 3 BR house, 2 renters, 1 child of taxpayers = 122 days of personal use). Does anyone see a problem with this method? Also, wouldn't it be true that no loss would be allowed given the personal use? Please let me know if I'm not thinking this through clearly.

Thank you, gentlemen. I am not the bookkeeper/accountant for the company. The company has a large accounting firm in Kansas City that does its books. I just drove down to my office to pull the client's W2's back to 2003. 2006 was the first year client crossed the SS maximum. I will do as you suggest: prepare the return with the W2 as printed, point out the possible error to my client, and move on to another return. I feel like an idiot for not catching last year's possible 'mismatch' on this client's W2, but I'll forgive myself and work harder to not miss things. Thank you both for taking time to respond. I think now I will be able to wind down and get some sleep. Happy Easter to both of you.

Okay . . . now I'm really sweating. Just looked back and Client's 2006 Wage maximum shows as $87,000. Clients Box 1 income was $89,000. I just flat out missed it. Besides eating a bunch of penalties and interest for not catching this, what do I do next? To make myself feel better, it appears that possibly none of the preparers for the other 14 employees caught it, because the mistake was made in 2 years in a row. I'm scared to look, but it probably goes back to 2003. Yikes. I guess I'll go pull the 2005 W2 so I can really not sleep tonight.

Client has standard W2 from employer. (Employer is a small publishing company; perhaps 15 employees. S-Corp.) The W2 has $93,736.64 in Box 2 Wages and the same number in box 5 Wages. Box 3 has $87,000 listed in social security wages. There is nothing in box 12, box 14, or any other box on the W2 (other than state information). 1) Could there be some reason I'm not aware of why this would actually be correct? 2) Assuming it's not correct, what do I do now? Obviously, the Employer has underpaid and the Employee has under withheld. (Yes, Box 4 is calculated on the $87,000.) Please advise. Thanks so much. I've never come across this kind of situation with a W2.

Thanks to all of you! I am truly grateful. (Even though I feel stupid that KC had to figure out the math for me . . . sheesh.) I will keep my nose in the research material and figure this out. It seems that I should ignore the bit on the W2 summary that says 'nontaxable compensation'. I was very suspicious about it; I couldn't figure out why it wouldn't be taxable. Thanks again. I really appreciate thie guidance. Jainen, thanks for your honesty. I appreciate your knowledge. You remind me of my finance professor in graduate school. He was tough as nails, but I learned more from him than anyone else I studied with during my entire undergraduate, graduate, and law school tenure.

I am working on the same thing, as posted in an earlier thread. All the research I have done says to increase the number entered in Box 1 of the W2 for the amount of the qualifying dispositions. Also, my client's W2 indicates in a 'supplemental information' field (not the W2 itself, but an attachment) that the qualified dispositions are non-taxable??? I can't find anything to support this, and a year-end statement provided regarding the distributions indicated that they were W2 income. I'll be eager to see what you decide to do.

Did he contribute more than 1/2 the child's support? What did girlfriend claim when she filed?

Anyone? I'm developing a complex. No one has responded to my last 2 posts.

Hurts like h***. Eventually, if you do it enough times, your skin toughens a bit and it's not quite as bad. I'm glad I'm not a guy; I would never wax my enitre chest and back. Eeeuuuw!

Client formerly worked for Netopia. Has a W2 that was issued. A 2nd W2 was issued (although not marked corrected) that was the exact same as the 1st W2 except that box 14, which was blank in 1st issue, includes $12,246.62 ISOS. W2 Numbers are as follows: Box 1 $31,664.16; Box 3 $22,362.93; Box 5 $22,362.93; Box 12 - $15.72 life insurance, $2945.39 401(k) Issues: According to the 'Statement of Taxable Income Stock Purchase' client brought in, Disqualifying Dispositions that should have been taxable totalled $11,368.70 (value on purchase date minus purchase price). Qualifying Dispositions totalled $12,246.62. 1) The difference between Box 1 and Box 3 is $9,301.23. This doesn't seem to fully account for the $11,368.70 in NQ Dispositions. Do I need to add the difference to the amount I enter for the taxable portion of the Box 1? 2) The Qualifying Dispositions, which are coded in what I assume is the 'corrected' W2, are listed in the W2 summary (upper right hand corner of sheet also containing 4 detachable W2 copies) as Misc. Non Taxable Comp. I thought Qualified Dispositions were taxable compensation. What am I missing? If they are not taxable, then I assume my clients basis in the sale of the stock is $0? If it is taxable, do I add it to taxable income as in #1 above? The 'Statement of taxable Income Stock Purchase' lists the qualifying dispositions as taxable. Someone more knowledgable please help.

Bump.

Client sold all shares of Walgreen's stock this year. Client is an employee of Walgreens. The shares date back to the late 90s/early 00-01 and were purchased through an Employee Stock Purchase Plan. There was a loan component to this purchase plan. The statements show a starting balance (the cost of the # of shares) and then a payment every time the employee got paid. There is an interest charge identified for every transaction. Would I add the interest to the basis of the stock, or would it have been somehow deductible as investment interest in the year paid, which would require me, I assume, to request very old tax returns to see if the deduction was taken. Am I on the right track here? This is the first time I have seen something like this. (It's probably really common and I'm just uninformed.) Thanks very much.

Thanks so much, Pacun and Linda. I read the instructions for the 982 but still wasn't confident that I didn't need to report the debt cancellation on the 1040. I appreciate your confirmation.