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Sorry if that pdf isn't working. It has been an ongoing issue since the upgrade. Here's a photo that may work

Margaret, that 8824 definitely has problems and shouldn't be relied on, and I think you are going to have to rework the numbers to arrive at the proper deferral. In a general and simplified discussion, the deferred gain should be the difference between recognized gain and the realized gain. Maybe think of it as a reconciling exercise where that deferral reduces the basis of the new property back down to that of the old (new property as if purchased outright minus the deferred gain = basis of the new). It's not unlike the very old personal residence rules where the basis was reduced when gain was deferred. In a very simplified example, I've created an 8824 with your facts. I'm not sure where some of the former preparer's figures come from, and I don't have the selling expenses or other costs that you mentioned, so below is a very basic 8824 with your fact pattern to use as an example. You'll see that the deferral on line 24 is the difference between the recognized and realized gains (line 19 minus 23), and that amount is the exact reduction applied against the new property, and that brings you back to the basis of the old. Also, keep in mind that "cash received" on line 15 isn't the cash received at settlement of selling the old; it is the cash that the seller didn't reinvest, so my starting point was $679,900 - 212,000 reinvested. The use of $212K accounts for the $5K of fees. Maybe this will help you sort this out. And if I'm all wrong here, Dan will straighten me out. 8824.pdf

@Lion EA Is the client trying to use Direct Pay as a guest where it doesn't require log in? You said the client was able to log in to his IRS account and check his address. Did he try to make the payment while logged in there? Sorry if I'm missing something there. I have an EFTPS account for this so haven't personally gone through all of those steps on that page.

I know, it sounded ridiculous to me too but was passing on what worked for one person.

One suggestion I saw from someone that was also having difficulty, specifically with the address, was to type it in all caps. As you already suggested, he should try again on another day. The only other way other than what you've already mentioned is to pay by same-day wire transfer that the TP's bank initiates. Scroll to the bottom of this IRS payments page and you should see a link to another page. That next page has a link to a payment information worksheet in pdf form for the TP or business to fill out and present to the bank. Hope it isn't an identity theft issue. Sorry he is having troubles.

I had a thought on the land. Was this a condo where no amount was assigned to land? Other than that thought, concerning future sale and gain: as you know, the premise of the 1031 is that the basis of the new carries over from the old property given up so that any gain is deferred to the future, so -0- basis would be possible if every bit of the property given up has been depreciated, but there is still my question about the land. It is possible that the full amount of proceeds of a sale in future, net of exps of sale, would be the amount of gain from that future sale if the property truly has -0- basis. Then again, the TP will have additional basis for any capitalized costs incurred after the 1031 exchange occurred.

I've done 1031s, including with partial gain taxable, but never one where absolutely everything was fully depreciated. What about the land value from the original property sold?

Margaret is correct that client doesn't meet the eligibility test. He must use it 2 years out of the last five, 730 days. However, if a TP fails the eligibility test, it is still possible to take a partial exclusion IF certain other requirements are met. Those specifically allowed are: work-related move, health reasons, unforeseen circumstances, and other. You can find all of this general information in Pub 523 under the caption "Does Your Home Qualify for a Partial Exclusion of Gain? I don't think your client will qualify for the "unforeseen circumstances", but if you'd like to see the valid reasons IRS considers "unforeseen circumstances" you can read that in this older article from The Journal of Accountancy.

Back to your problem, maybe something changed in your system recently that is causing this. Do you know when the issue started? Maybe the topic below may help, and if you search the general chat forum for "freeze" "freezing" "crash" or "lockup" and sort by date, you will get more topics that may have something useful.

WK CCH doesn't care, and customer support has been awful ever since Glynn Willett sold the business. The reason this unofficial forum exists is because the company closed down the official forum on April 11, 2007 because some of the more outspoken users were complaining about the program, leaving users without any means of support or help. That is how little it cares about its customers.

From the perspective of the person buying something, paying a business expense, making a chartible donation, paying medical expenses, etc, the deduction is in the year that the charge occurs, as I've said for the 4th time now and with cites. This line of questioning reminds me of times when a non-tax pro sneaks through with a question and one of the reasons why we don't allow or answer questions from the general public on this forum. Also, one other post hidden that was off-topic.

Again, deduction is when the vendor, charity, medical provider, etc gets paid by the credit card company on behalf of the person who owes the money or is making a charitable contribution, etc. That person incurring the charge is using borrowed funds (on credit) to pay the bill. Like taking out a loan to pay the bill. Example: I purchase $15 of office supplies from Staples in Oct 2024 and charge that to my credit card, and it doesn't matter that I carry a balance on that credit card until after year end. I will deduct that expense in 2024 because Staples got paid in Oct 2024 by my credit card company on my behalf.

The deduction is taken in the year the payment to the payee occurs.

The purchaser has obligated him- or herself by paying the vendor with borrowed funds, so the deduction is when the charge occurs, not when the payment is made to the credit card company. Here are some references: Rev. Rul. 78-38 states that you may deduct a donation to a qualified charity via a charge to your bank credit card in the year the charge is made, regardless of when the bank is repaid Rev. Rul. 78-39 states the same rule for medical expenses. IRS Pub. 583, Starting a Business and Keeping Records (Rev. January 2007), p. 13, eludes to treatment of business expenses charged to a credit card using the transaction date for recording the deduction.

Yep, I know all about comebacks and warranty work. Husband is a now-retired mechanic, worked commission for most and then flat rate, and then worked as service manager too. On my end I've done the accounting and tax work for more than a few repair shops, quite a few gas stations, a couple of parts stores too, and a car dealer.

Just out of curiosity, are you trying to prepare a business return or Sch C using just the receipts, customer invoices, vendor invoices, and payroll records without having a complete set of books posted using double entry bookkeeping?

That is all correct.

You deduct whatever gross pay you pay the employees, no matter what job they are working on. It doesn't matter if it's warranty work or a first time repair.

I was just thinking about this today for when I eventually retire. If Drake is still offering PPR that includes some individual returns in the base price, that will be sufficient to prepare my return, siblings, and one or two friends.

Thank you! I haven't gone through all of my emails from this afternoon yet, but I do see it now.

IRS MeF operational status page: "Start-up for Business Returns will begin Wednesday, January 15, 2025, at 9:00 a.m. Eastern time." Date for individual returns: TBD

Client should check the contract for its surrender period. Typically the penalty lessens as the date gets closer to the end of that period. ETA: no tax consequence if the reinvested funds stay within the IRA.

If you are going to research this, the name is "Gillmore" and you may get more hits with the proper spelling. I have no personal experience with this, but found these interesting, for whatever they are worth: https://law.justia.com/cases/california/supreme-court/3d/29/418.html https://www.willicklawgroup.com/wp-content/uploads/2012/04/Gillmore-Gillmore-and-Trustee-Pay-over-Orders.pdf The second one is an older blog by an attorney that references the Dunkin case and that lays out different clauses that could have been employed but that Dunkin did not use that possibly could minimize tax impact, differences in tax brackets between the parties, and specific "tax intent" language. From reading all of this, it seems to me that you should look at the actual document that your client agreed to. I could be very wrong on this thought also, but it seems to me that this type of arrangement may fall under IRC sec 1041 that deals with transfers of property incident to divorce, and because the heart of the Gillmore decision is that one spouse can't take actions to deprive the other party to division of assets to which that other party is entitled to (by refusing to retire). That's a long-winded way of saying I don't know. Sorry & good luck! Maybe someone else has experience that will clarify, and hope you will post what you find out.

No, can't claim the EIC now. https://www.irs.gov/businesses/small-businesses-self-employed/filing-past-due-tax-returns From the above linked IRS page:

The firms I worked for kept time in 6 min 10ths of an hour because some things don't take 15 minutes, and when that quarter hr was tried the time charged to clients was more than actual. I still use 6 min 10ths of an hour, and so do a few others I know of.