jklcpa

Right, HOH was never an option for this client. There are no children. I brought it up only because JB mentioned the length of separation and wanted to be clear that that was not a consideration in this case. The only consideration is the marital status at 12/31/14, by decree of divorce or separate maintenance.

The 1250 recapture should have been reported in the year of sale, and the GP% and installment gain to be reported over time relates only to the cap gain portion of the sale. The installment portion of the cap gain and the interest income received are reported each year until the note is collected in full.

I remember the story of this client too. The only status she can properly file is MFS and must itemize. At least she is now living apart now.

Maybe these will help some, defines what an eligible plan for PA purposes is: from the PICPA: http://www.picpa.org/ask/public/View.aspx?id=251&ReturnUrl=Search.aspx%3fi%3d9%26k%3d%26c%3d1 from the PA Dept of Revenue's site, the PA PIT Guide, see chapter 7, section XVI starting on page 92 (has the same criteria as the PICPA page): http://www.revenue.pa.gov/FormsandPublications/PAPersonalIncomeTaxGuide/Documents/pitguide_chapter_07.pdf

Please see pages 11 & 12 of the PA-40 instructions. The first is about how PA taxes pensions and if it is from an eligible plan, and the second page specifically addresses those early distributions that are taxable, and the requirements for when those are not taxable.

I agree with Rita. The only instance when the length of time living apart comes into play is if the person meets the definition of "unmarried" AND wants to file as HOH.

If they can claim this person as a qualifying relative, they will owe the penalty for the 29 year old without insurance coverage unless they meet one of the exceptions.

I have had clients call this week to make appts a couple of weeks out and saying they still don't have the 1099s from brokers!

Uh oh, two math teachers giving us lessons....

I'd be very careful about providing any information about this for the reasons already mentioned, plus there can be a wide range in a valuation for this kind of service business depending on its size. As Lion said, I'd point the roofer back to looking for that information through trade organizations that he can provide directly to the "requester" without involving you. Here's an interesting article about why these types of businesses have such low values, and at the end talks about how a roofer could increase the value of its business. You'll see from this that a roofer with a couple of trucks with signs on them and operating out of a small office will have a vastly different valuation than a larger one that has multiple levels of management, a sales team, a large number of roofers employed, etc. It is from roofingcontractor dot com. http://www.roofingcontractor.com/articles/84818-how-much-is-your-business-worth

ha, Pacun, I saw what you did there. It was clear to me, but I only included that part about the qualifying child because Yardley's snippet seemed to be only a portion of the criteria for that, and he didn't have any rules for being a qualifying relative.

No, your client can't take either son as a dependent. For being a qualifying child, they each fail the age test. For being a qualifying relative, they each fail the gross income test.

I see that but it could mislead some readers because of the way it was written. Your first sentence sounded like the law, and it was only made correct and complete by taking the example into consideration as law also.

I don't know the answer about entering zero. Do you want to do that to document that you've considered the income and reported "something"? I pulled out an old Master Tax Guide and was then reading Reg 1.183-1 through 1.183-4. Maybe the answer is in there somewhere. Are there any costs that might be moved out of COGS as more indirect costs, or any that should be considered withdrawn for personal use, or is this person really not able to get the prices she dreamed of? Is she making jewelry and wearing it or giving some of it as gifts? I had one of those clients that was doing all of that and had big dreams with tiny profits. lol

I would say 'no' since, in general, hobby losses cannot offset other types of income. If gross income from the hobby is less than zero, I don't think you can put a negative figure for hobby "income" on line 21 and have it reducing other income to arrive at total income or AGI on the 1040. I don't have a cite for this without looking though.

...or not entertainment, at least not in terms of how we describe it for tax purposes.

No, unless the instructions are wrong, I don't think what you are saying is true. Pacun, do you have a cite for this? From the instructions for Form 8965, under the definition for "tax household" it says: Tax household. For purposes of Form 8965, your tax household generally includes you, your spouse (if filing a joint return), and any individual you claim as a dependent on your tax return. It also generally includes each individual you can, but do not, claim as a dependent on your tax return. To find out if you can claim someone as your dependent, see Exemptions for Dependents in Pub. 501, Exemptions, Standard Deduction, and Filing Information, or Line 6c—Dependents in the instructions for Form 1040 or Form 1040A. However, an individual is included in your tax household in a month only if he or she is alive for the full month. Also, if you adopt a child during the year, the child is included in your tax household only for the full months that follow the month in which the adoption occurs. But then it goes on to say this: Dependents of more than one taxpayer. Your tax household does not include someone you can, but do not, claim as a dependent if the dependent is properly claimed on another taxpayer's return or can be claimed by a taxpayer with higher priority under the tie-breaker rules described in Pub. 501

Right! Is that something specific to the medical professions? I took my dog to the vet and was told she'd lost weight and was 7.12 lbs so I'm thinking the tech meant 7 1/8 lbs. Nope, the .12 was 12 oz or 3/4 lb. So I'm standing there asking the vet about the entries and she's looking at me like I'm the crazy one. It seems some techs do this and others don't so there was no consistency in the entries to tell what was really going on with the weight because some entries were 7.50 lbs. That was enough to aggravate this bean counter!

I googled out on the web and looked for any that were to the irs site. I have better luck than searching directly on the IRS site itself.

Service options. The IRS is providing information in several ways ranging from a special section on IRS.gov devoted to identity theft to a special phone number available for victims to obtain assistance and resource information for resolving tax issues. The IRS Identity Protection Specialized Unit is available at 1-800-908-4490. Margaret, the above came from this page on the IRS site: http://www.irs.gov/uac/Newsroom/IRS-Combats-Identity-Theft-and-Refund-Fraud-on-Many-Fronts-2014 More, this page says that # is for those that have already contacted IRS and have not reached a resolution. I might be inclined to call that # though because I've heard some horror stories about hold times when calling in on the main numbers any more: http://www.irs.gov/Individuals/Identity-Theft-Information-for-Tax-Preparers

You're welcome.

I think it depends on the type of business before you can say for sure. If the business is somehow related to firearms, shooting, hunting, etc, then the range fee might be considered directly related to the business. If not, then you need to decide if the entertainment meets the "associated" test. The range would have significant distractions and would preclude conducting any sort of business meeting or discussion while actively participating on the range, but if a meeting is documented either before or after, then it might be possible to claim a deduction. Also, if some of this does turn out to be deductible, if he paid for someone else to attend the meeting that wasn't necessary to conducting of business, that portion is not deductible. Check out Pub 463 for the "directly related" and "associated" rules. The owner's personal firearms and ammo would not be deductible as an entertainment expense. That would fall under the same rules that say a person's yacht can't be deducted for such purposes. I doubt this person has any deduction. It sounds like he's scratching around for deductions of expenses that aren't really deductible.

Reporting the entire sale IS the election, and don't use 6252 at all. Use the other appropriate forms of 8949 and 4797.

Yes, the portion that is nonrefundable is considered prepaid medical expense, and this is an exception to the rule that says payments for medical that are substantially beyond a year aren't deductible in that year. You need to look at the policy though. Here is the section from pub 502 - Lifetime Care—Advance Payments You can include in medical expenses a part of a life-care fee or “founder's fee” you pay either monthly or as a lump sum under an agreement with a retirement home. The part of the payment you include is the amount properly allocable to medical care. The agreement must require that you pay a specific fee as a condition for the home's promise to provide lifetime care that includes medical care. You can use a statement from the retirement home to prove the amount properly allocable to medical care. The statement must be based either on the home's prior experience or on information from a comparable home. Dependents with disabilities. You can include in medical expenses advance payments to a private institution for lifetime care, treatment, and training of your physically or mentally impaired child upon your death or when you become unable to provide care. The payments must be a condition for the institution's future acceptance of your child and must not be refundable. Payments for future medical care. Generally, you cannot include in medical expenses current payments for medical care (including medical insurance) to be provided substantially beyond the end of the year. This rule does not apply in situations where the future care is purchased in connection with obtaining lifetime care of the type described earlier. If any of the cost was paid with tax-free funds, then that portion wouldn't be deductible. Here is an article that popped up in my search that discusses the types of contracts and their levels of service. You should look at the contract to see if it covers other services besides medical such as bill paying, housekeeping, running errands, etc, that aren't medically-related. The article states that these can be deducted under sec 213, and talks about the actuarial and percentage methods of allocating when policies cover more than just medical expenses.

Marilyn, I know that's how ATX works, and so do many other tax programs, including the one I'm now using. I was asking the OP since she's concerned about it being taxable or not, and how to get rid of the refund off the return. The refund isn't taxable since the income on the return was negative, and even the AGI was negative, so the OP should simply delete the entry from the input screens. Really, I was anticipating her next question of "will that generate a notice if the client received a 1099G?" and that is why I put that in there.