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jklcpa

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About jklcpa

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  1. Some IRS mailing addresses were recently discontinued, but doesn't list the one for Cincinnati for 1040-ES. Here are the ones that were affected: https://www.irs.gov/filing/closing-of-business-po-box-addresses-could-affect-your-clients Here is the page to check mailing address for where the taxpayer lives or by form: https://www.irs.gov/filing/where-to-file-paper-tax-returns-with-or-without-a-payment
  2. 1120 due date was extended to July 15th as specified in IRS Notice 2020-23 here: https://www.irs.gov/pub/irs-drop/n-20-23.pdf Is the penalty actually the late filing penalty, or is it perhaps a late payment penalty?
  3. Margaret, other than the larger font, the other main difference on the 1040-SR is that the chart for the higher standard deduction is printed on the form itself instead of "see instructions," presumably to cut down on errors for those folks that are still preparing paper returns by hand. The 1040-X is the form used for amending all the 1040 series of returns including 1040-SR. It says so right in the form's instructions.
  4. Reciprocity with NJ is only for compensation. If she is operating a business in NJ even as a Sch C, she will have to file a nonresident NJ return as well as the resident PA return. She'll also have her professional licensing in NJ also since that is where she is operating. The LLC gives her liability protection but won't affect her income taxes if she is an SMLLC because it is disregarded. It will cause her to pay additional fees to incorporate and maintain that status though.
  5. Do you have a set of books for this partnership, or are you trying to prepare the returns without proper bookkeeping or without an income statement and balance sheet? Record each element as separate transactions within the set of books instead of trying to lump all this activity together and it should become clearer. If not, then it seems to me that this may all be beyond your current skills as a preparer.
  6. Uh, I'm no expert and there are those here with more expertise or knowledge here that will correct my errors. I just help where I'm able, when the post interests me, or when I see a post isn't getting any responses. And Ringers, ever since your "wow" comment I've had SNL's Wayne's World theme stuck in my head, although my version is more like Wayne's mom starting at about 50 sec mark in the clip below. Party On!
  7. Obviously, if this was money going out TO the officers and is shown as an asset, it can't be add'l pd in capital as Abby Normal suggested. Also, I know Abby has an adversion to debt basis in an S corp, but the transactions should be recorded based on the actual facts, clients' actions, and their intentions, not what we want them to be. Either way, this is a big mess! Clients have convenient memories when it comes to money they've taken out of their corporations or have used the company checkbook as their own, and those amounts can easily result in large sums if this has occurred over many years. It's also possible that the accountant didn't know how to handle distributions in excess of AAA and was creative. This reminds me to mention reasonable compensation, if the owners are on payroll, and the status of quarterly and year end payroll reporting.
  8. Some other suggestions and thoughts - What records were used to prepare these returns that the client can provide? Possible clues may be found there. Depending on #1, you may be looking at amended returns for all open years. Does the client have copies of any returns? Have client request copies of returns from IRS? Form 4562 should be included with any year that has asset additions. Use that to reconstruct the fixed asset schedule as best you can and see how close you are. Consider a plug for the remaining differences of cost and accumulated depreciation to tie in to the lastest balance sheet figures, but do NOT depreciate those "plugged" tie-in amounts since you really don't know what those are. I'd have to know what your clients can dig up before commenting further.
  9. #1 could be true if the S corp doesn't have anything that would flow to the Other Adjustments Account, usually tax-exempt income and related deductions. #2 - This is incorrect. S corp losses can result in AAA being a negative balance, but distributions can't reduce it below zero. Shareholder's basis that can't be reduced below zero. #3 - See #2 above. Well, ignoring the error related to #2 and that AAA can be negative, if this was an S corp since inception, always on the tax basis of reporting, no timing differences, and no other activity that would be in the OAA, it is a possibility that AAA and retained earnings could be the same.
  10. The individual reports the K-1 income in the year that the K-1's fiscal year ends, so in your client's case, the K-1 activity for fiscal year end 7/16/20 would be reported on the individual's 2020 tax return.
  11. I would book the journal entry entirely as dividends if your software will not allow an entry directly to retained earnings. If the company had reported the expenses properly in the prior periods, those expenses would have been closed to retained earnings and possibly created a deficit. This shareholder may, or may not, have to paid tax on the full $200K as cap gain. Remember that dividend taxation is controlled by E&P and accumulated E&P which is not always the same as retained earnings. The shareholder may have a nontaxable return of capital, and with the level of adjustment you are talking about, it may be well worth the time to do the calculations, if you are able. Here's a link to another discussion about this same topic here on this forum and this page that has comprehensive examples of how the calculations work: https://thismatter.com/money/tax/corporate-distributions.htm
  12. Years ago I had a similar experience with AAA, although I was not left stranded 50 miles out on a mountain. A girlfriend and I were en route to an entertainment show in Philadelphia when my fuel pump died on I-95 miles south of the Philly airport where there is nothing, no phones, and fencing along the road. AAA towed my truck to a local garage and left my friend and I at shopping center where every store was closed because it was a Sunday evening. Later on we found out this was a very bad section of Chester, PA. This was before the days of cell phones and I guess we were lucky that the shopping center had a phone booth. I called a local taxi company to come get us and take us to the Spectrum (now the Wells Fargo Center) so that we could meet up with friends and get back home. It took multiple calls to convince the taxi dispatch that I was not pulling a hoax on them, and we finally got to our destination about 15 minutes before the show ended. Luckily, our friends didn't leave the show early and gave us rides back home! The next day I had to track down my truck and have it towed back to Wilmington to a repair garage I trusted. After hearing the story, AAA did agree it tow it back for nothing. I guess we were lucky to not be harmed in some way and my truck wasn't stripped and was retrieved without much trouble.
  13. Yes, firsthand I know of 3 friends that had it for sure and others suspected. The first is in her early 80s and is a cancer survivor. She is in independent living and is sure the communal living was the source. She started on a Thurs with nondescript symptoms of being unwell that progressed over the weekend, and then had to call 911 on Monday. Spent a week in the hospital on large doses of oxygen, steroids, and antibiotics. She ended up with some sort of heart complications that will require medication for the remainder of her life. She considers herself very lucky to not have ended up on a ventilator at her age or worse. Next is a friend and former coworker of my husband, age 60 and otherwise healthy. His job is inventory control and delivery of Rx meds to one nursing home. He was there the day of their first positive case and said they didn't show much concern. He was incredibly sick for weeks with the coughing, high fevers, very shallow and difficult breathing. He should have gone to the hospital to at least be checked out but was too terrified because of the stories of patients on ventilators. We were incredibly worried because he wouldn't go and knew that he probably should have been on oxygen and steroids at a minimum. He has recovered and is extremely angry over how that nursing home had no procedures in place and were lacking in their response. He should not have been allowed in there at all! To put it in perspective, the facility that my mom was in went immediately on lockdown the day Delaware had its first positive, and that was the day she was released, and I feel lucky that I got her out in time! Facility that friend does meds for had about 450 residents at the time of their first positive case and, within a short amount of time, 125 of them had died because of the virus. An otherwise healthy friend from Los Angeles also had it early on and it left her with tinnutis and vertigo so bad she's had to give up driving and is even fearful of activities like walking her dogs for fear of falling and injuring herself. Some of the lingering after effects weren't known at the time she was sick, so doctors don't know for sure if her current issues were caused by the inflammation from the virus, but I suspect that is the case because it started right after she was so sick. We have some mutual friends from the same area that have said they believe they had it in early February before it was believed to be there, and they'd tested negative for flu, and so they say that whatever it was, it was horrible and like nothing they'd had before. I think the virus was in our area earlier than was first thought too because my brother and wife had something horrible about a week before Delaware announced its first case, but they didn't go get checked because they didn't think it was here yet and assumed it was flu. Who knows?! They've said the exact same thing that other online friends have said about it, that the coughing is like nothing they've ever had before, and haven't ever been sick like that. I can say that if my brother said he was laid up on the sofa being sick for more than two weeks, it must have been really bad. He was still sick but got back to some level of activity. Husband was tested prior to his last biopsy and was negative. His followup was this week and his nurse said 2 of her neighbors, an older couple, both died from it. I'm still only going to the grocery once every 2-3 weeks, and other than that, the only people I have contact with are husband and my mom.
  14. jklcpa

    NT - mom

    I'm so very sorry to hear of your mom's passing, Darlene. I hope that, in time, your lifetime of memories will outweigh the grief you are now feeling. Please know that we are here for you any time you need to talk.
  15. Correct. No filing requirement if no business in DE.
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