jklcpa

See pub 525 concerning recoveries of amounts included in itemized deductions in a prior year. Maybe this part will help you: Negative taxable income. If your taxable income for the prior year ( Worksheet 2 , line 10) was a negative amount, the recovery you must include in income is reduced by that amount. You have a negative taxable income for 2013 if your: Form 1040, line 42 was more than line 41, Form 1040NR, line 40 was more than line 39, or Form 1040NR-EZ, line 13 was more than line 12. At the bottom of Worksheet 2 linked to above, in reference to entering taxable income for the prior year it states: 4 If taxable income is a negative amount, enter that amount in brackets. Do not enter zero unless your taxable income is exactly zero. See Negative taxable income . Taxable income will have to be adjusted for any net operating loss carryover. For more information, see Publication 536, Net Operating Losses for Individuals, Estates, and Trusts. The NOL was created in 2013 and wasn't from a carryforward from a previous year. Because you say that the tax didn't change with or without the Schedule A, there is no tax benefit to the state tax being included in the Sch A and therefore the state refund shouldn't be taxed. I'd just delete the entry from the return and move on. Is this question coming up because ATX included the state refund when you rolled the data forward, or did your client actually receive a 1099G for the refund?

If there was no activity at all and no returns ever filed, I don't believe there is any requirement to file a final return. There is nothing to report. If the LLC had an EIN that has gone unused, the IRS will eventually make it inactive and reuse the number at some point in the future. I am curious about what these LLC members were doing for the 11 months that you said they were active in the LLC. What exactly were they doing for the 11 months?

How I wish we could! We had sleet and freezing rain most of the day and everything is like an ice rink. My back yard has 1/2 inch of ice on top of snow that hasn't gone away, and tomorrow it will start to melt into small ponds and refreeze later as the temps drop down into the teens. There was the possibility of power outages, but the wind was light enough that we seemed to have dodged that one. I'll be cancelling more appts tomorrow morning until my sidewalk and office steps are safe. ~sigh~

If the college student is a dependent on the parents return, then the parents will be responsible for the penalty. Also, the student's MAGI will be included for purposes of calculating the penalty if the student was required to file a return. Don't include student's MAGI if student files only to receive a refund of taxes withheld or estimated taxes paid.

The year I switched away from ATX to Drake I had 2 companies come late and I missed filing the 1099s through ATX and was too late to get everything set up for the FIRE system to use Drake. It was only a few 1099s so I used efilemyforms. You can choose to print and mail the recipient copies or have them do that too. It was easy and worked well. There are several other sites for 1099 & W-2 filing that I saved into my favorites that I didn't use, so I can't comment on how easy or effective: http://www.bgtaxforms.com/e-file-s/7.htm https://efile4biz.efile1.com/Default.aspx http://tax-print.com/index.html FIRE isn't all that difficult, but one more place to learn, log in, create files, etc.

http://www.ssa.gov/ Click on Business & Government, then click Business Services from the list that appears. Scroll to the bottom and at lower left click Log In or Use Business Services Online. Upper right, select Register. From there you can set up your user account and will be assigned an 8-digit User ID that you'll use to log in each time. If you are using the ATX payroll program, you'll need to enter that for efiling those. Once you have that, you can upload your files directly to the site and check on their status by logging in to business services.

I had to increase the size of the display on my screen in the last year or so. I understand completely about the size of the fonts, and I think there should be a minimum set. I had someone fax me several forms that were missing and I was barely able to make out the numbers!

Oh, I do always enter it so I do have the info, but if the box is checked 'yes' for "Do you meet these requirements..." then in order for it to print on the return, the user must check a box to force its inclusion. Isn't ATX still this way?

I give only what is required, nothing more. I do check the box to force the balance sheet to make sure I'm in balance while I'm working on the return, and then I remove that before filing. What is your reason for wanting to include this?

Adding to Ron's post, consider deducting costumes, props, a portion of internet access, supplies. Treat this like any other business, explain to her about expenses needing to be ordinary and necessary, and have her give you a list of expenses that she can document. I'd treat her like any other client, and if I couldn't then I wouldn't have the person as a client.

Wasn't thinking would be more like it! Do you think it was to record the personal use of a company owned auto since the debit is to compensation, or do you think the CPA was trying to record business miles of a personal auto since the credit is to add'l pd in capital? lol Hard to guess what was going on there.

Dividing the loss carryforward IS a sticky situation and goes back to whether state law, the divorce agreement, and settlement interpret that carryforward to be property of the marital estate. Then, there's also the consideration whether state law preempts Federal law, the tax code, that says that the loss follows the legal title of the account and transactions that gave rise to the loss in the first place. It can be further muddled if separately owned assets generating losses are used to offset gains from jointly held assets, and that may have been claimed over years. At least this case involves only the wife's inheritance and one tax year. There have been cases about this that go both ways, so the answer isn't always clear at all. I don't know if these will help. The first one has some cases cited and a concluding section (that doesn't really reach a conclusion we want) that mentions valuing the loss carryforward by the future tax benefits that it will produce. That probably wasn't done in the case with Terry's client since the wife got $67K more because of the husband's mishandling, so not sure if the loss itself was considered a marital asset. It doesn't sound like it. http://www.divorcesource.com/research/edj/tax/05nov121.shtml The second link is about a particular case in MD where a divorcing couple had jointly held investments that generated cap losses. The wife relinquished any right to the jointly held account, and then used ~ 50% of loss c/f on her next return. Husband sued that she didn't have the right to the loss c/f and court held in his favor. Wife appealed and the appeals court reversed the decision in favor of the wife stating that the carryforward was not an interest in the investment account itself. http://www.marylanddivorcelawyer-blog.com/2015/02/12/maryland-court-interprets-settlement-agreement-dividing-marital-property/ That's a long-winded way to say "it depends."

You are correct. This qualifies as a gift of a present interest, the parents recognize the amount of the gift as payments received on the installment note and report their proportional share of the gain for the year on the 6252. It's as if the children paid on the note and the parents gifted that same amount of cash back to the child and child's spouse. Same next year when the note will be satisfied by the gift of the remaining principal forgiven and will be the final year of the installment sale. The children will have the full basis in the company according to the original agreement with no reduction for the amount of debt forgiven by the gifts. This is similar to self-cancelling installment notes, aka death-terminating installment notes, that allows transfers of a company or highly appreciated real estate to a child, bypasses the estate tax, and the child still receives a step up in basis.

Weird, almost this same question appeared over on the Drake forum recently. I had one years ago where a client was contributing to an IRA and not telling me because she was covered by a plan at her work, and the entire IRA was n/d so she thought no need to report anything. I wrote a letter that accompanied all 8606s for the prior years that should have been submitted to document the basis. From there I properly included an 8606 with each year's return after that. IRS didn't assess the $50 penalty for not filing those back years, and client never heard a word about basis not being allowed either. I totally agree with Tom's first paragraph about basis being created and calculating the deductible and nondeductible portions of each year's contributions. No to the 3115 also.

This is going off-topic pretty far and bringing politics into the discussion once again. I've had a request to lock the topic, but anyone that wants to discuss guns and shooting could start a new topic and leaving out the politics. My husband has several coworkers that have built their own guns. That is perfectly legal to do here and to own and shoot them, but not OK to sell them. Last time he was at the range with them he tried one out and I think he'd like one too. He's not too subtle about dropping hints about prezzies he'd like to have. lol

Here in DE, if person dies intestate the court would appoint also, but they would first consider any spouse, parents or siblings over an unrelated administrator. Also in my state, any estate assets would be used to satisfy debts of the decedent, and if debts exceed that when all is liquidated, then no one else would be responsible for the remaining debts unless there were things like someone had guaranteed the debt, co-signed a loan, was co-applicant on a credit card, etc.

Yes, that falls under "exception 1" as described in the instructions for the 8949. You aggregate the appropriate totals and report them directly on Sch D. No need to use the 8949, and you do not need to attach anything to the return either. This only applies if all are covered securities and you aren't making any adjustments to the amounts reported on the 1099B. It's on pg 3 here: http://www.irs.gov/pub/irs-pdf/i8949.pdf

The point of the article in the original post said that the IRS isn't going to pursue collecting additional amounts owed due to their error, so it won't be a wash that benefits their side of things because some of those affected will choose to amend for refunds due back to them, and yet others are waiting for the corrected form.

The IRS can't fix this for many taxpayers because even if the 1095-A had shown the 2014 SLCSP instead of using the 2015 amount, those aren't always the amounts that should be used on the form 8962 and need to be adjusted. Below are 3 examples of when the 1095-A figures might need to be adjusted because the taxpayer failed to notify the exchange of a change in their circumstances, especially if they contacted the insurance company directly and effected the change in that manner. When an infant was born during the year, if the parents contacted the insurance company directly to add the baby and didn't notify the exchange. In this case, the coverage family would have increased by one person but the 1095-A reporting of the SLCSP would still have been based on only two people. Another good example would be a married couple where one of the parties went on Medicare during the year and didn't notifying the exchange. The 1095-A would have reported the cost of the SLCSP for 2 people but should have decreased to one person starting with the month that Medicare coverage started. Third example is if someone moved and didn't notify the exchange and the cost of the SLCSP was different in the new location. In each of these scenarios, we would have to look up the cost of that SLCSP for the proper number of people or locale to properly complete the form 8962.

>goes to the VA for medical issues/prescriptions< So he just goes to the physical place, the VA hospital or clinic in your area, and he wasn't actually enrolled in the VA health care program?

This topic posted by last year is the same discussion and has some links about the rules and how to report it.

It sounds like you've been thorough in analyzing why this is happening on this return. The only thing I can think of is that the SLCSP reported on the 8962 must be only for the mother and not the mother plus child. The 1095-A shouldn't have the child included in that figure since the coverage purchased didn't include the child, but that is the only thing that came to mind since the child is part of the "tax family" but isn't part of the "coverage family". About the warning and line 61, there were several threads posted about this earlier. ATX only gives a warning about line 61 box not being checked when the return is totally "silent" as to the ACA, so as soon as the return includes either the form 8962 or 8965, that warning will disappear. I'm not going into the other hypotheticals here. Maybe someone else will take up that challenge.

Try the "Filers Info" tab of the 1040 form.

If the investment account was titled in the wife's name only, and if the activity was coded properly in your tax program as belonging to the wife, the MFJ return would have had a $3000 loss and then the next year in MFS the wife would have used another $1500 of loss. The now ex-husband shouldn't have been entitled to any of that loss on his return last year. This year wife files as single and is back to the $3000 loss limitation. It is her account, has nothing to do with him except that she was foolish enough to allow him to lose a very large sum of her inheritance. I think she should file appropriately, and if that means she is entitled to claim the son, then she should. If he files first then she would have to paper file, but you could try to e-file and see if it goes through. Why is she willing to give away an exemption that you think is legitimately hers? If you are satisfied that her documentation gives her the exemption, I think she should claim the child. What am I missing?

How are others here handling the scrubbing of the fixed asset schedule? Are you simply deleting the assets? I did that on one corporation and it was a company that was required to fill in the Sch L balance sheet, so the program reduced the fixed assets and accumulated depreciation by the amount of the deletions. If you intend to use the EOY figures from last year's return as the BOY this year, you'd need to reduce the retained earnings for the amount of the 481(a) adjustment to keep in balance. If you are going to pretend the assets were never capitalized or depreciated, you'll have to change your beginning retained earnings amount by the amount of the adjustment. The first corp I filed had a beginning balance sheet that did not balance because I deleted the assets from the fixed asset schedule and didn't notice that it was out of balance. I had all the documentation attached, so it will be easy to explain if the client gets a notice.