jklcpa

What was actually referenced in the settlement for the portion that relates the emotional and physical distress? I was trying to find something about the future medical expenses for you. I came up with a case of someone named Niles in Rev Ruling 79-427 where the future medical expenses weren't allowed as a deduction because the tax court said it would be excluding them more than once (implied that they were taxed when the settlement occurred). I am frustrated with the results of the searches in my research materials, must not have correct key works to get to the answer, but I found these on the internet that have references to some Rev Rulings that you could look into. http://www.lanepowell.com/wp-content/uploads/2012/07/Babener_Article_MedExpenseDed-Master-2012-v-6.pdf http://openjurist.org/710/f2d/1391/niles-niles-v-united-states

If the $5702 in direct medical expenses were deducted in a prior year and provided a tax benefit, those are taxable if the deduction produce a tax benefit, or if in 2013 then they would reduce the current deduction since she was reimbursed for them. The part of the settlement for her emotional and physical distress might be taxable too, unless you can tie that back to a physical illness or injury, so it seems the settlement would have to be because failed tubal ligation is a physical injury or physical illness. I don't think you can exclude the portion of the payment that relates to the future medical expenses because she hasn't incurred those expenses yet. IRS pub on settlements: http://www.irs.gov/pub/irs-pdf/p4345.pdf

I just filed NC and DE extensions online for 2 clients too. All were zero balances owed.

Short article from Pennsylvania Inst of CPAs website: http://www.picpa.org/ask/public/View.aspx?id=100&ReturnUrl=Search.aspx%3Fi%3D3%26k%3D%26c%3D2 Another from Investopedia, a nice summary & bottom section covers your situation, and talks of the 2 approaches: http://www.investopedia.com/articles/pf/05/annuitylosses.asp Not great sources to rely on, but both are saying and referencing the same thing and same Rev Ruling.

Not true. As JmovichEA said, investment interest expense is deductible to the extent of investment income on Form 4952. And you have to test whether it may be beneficial to elect to treat cap gain income as investment income.

I would stop trying to explain it to this client. I have one like this that will never understand. This is what I would tell him: "You won't get a deduction of any kind for that land until you sell it, and it doesn't matter if you paid for it fully by cash or financed its purchase through a loan. You will get to deduct that land at the time you sell it."

Happy Birthday to the KC & ATX Community (Eric). Thanks to you both for all the work you've put into this forum over the years. Happy Birthday to SCL too. Sorry for the belated greetings to you all.

KC is correct IF Rita meant there was actual blood on the return when she said, "But I had to reprint the bloody tax return." Replace "bloody" with "bleeping" or better yet "frikkin" since this is the ATX Community and you'll see what I mean. Thanks for the laughs RitaB. I'd "like" your posts, but I've run out already.

It's probably deducted as part of the guaranteed payments to the partner, and that's why it's subject to SE tax. If the premiums weren't paid out of the partnership, then the partner would have higher income flowing through as ordinary trade or business income, so the SE income and SE tax would be the same anyway.

I didn't want to read past your first sentence. If he doesn't have employees, he doesn't need an EIN for the Sch C. Did he file payroll tax returns for the business, and if so, what EIN was used on those?

I called support yesterday too. The call was answered on the 2nd ring, emailed a file with the input, and personnel couldn't get to the solution on my state input problem right away and said she'd call back. I solved it on my own a few minutes later and sent her another email saying I no longer needed assistance. She called me back anyway just to follow up because she said she would, and she thanked me for letting her know.

Agree with Elrod. If client misses the deadline for a payment, he's in default and the entire balance becomes payable.

Thanks, Eric, that was fascinating. Seeing the beauty of nature never gets old.

Really cool. The map in the link is updated every day too.

Tired, stiff from sitting so long, and in need of more coffee.

Nine, that is all, and all are bears. Of those, 1 is an extension that is really complete and 2 haven't bothered to come in yet. The other six, 3 will def go out, the other 3 aren't calling me back with missing data after repeated calls and emails from me. This season it's been like pulling teeth to get people to return calls and get the information I need to finish up. I still need to work on some 1st quarter estimates too.

I don't change anything either.

Terry, yes building on different land would qualify for the postponement as long as it is similar in service and use. Building another rental would qualify. Pub 547 has all the details and examples that will help you. In the meantime, here are 2 excerpts that should briefly answer your question: Postponement of Gain Do not report a gain if you receive reimbursement in the form of property similar or related in service or use to the destroyed or stolen property. Your basis in the new property is generally the same as your adjusted basis in the property it replaces. You must ordinarily report the gain on your stolen or destroyed property if you receive money or unlike property as reimbursement. However, you can choose to postpone reporting the gain if you purchase property that is similar or related in service or use to the stolen or destroyed property within a specified replacement period, discussed later. Replacement Property You must buy replacement property for the specific purpose of replacing your destroyed or stolen property. Property you acquire as a gift or inheritance does not qualify. You do not have to use the same funds you receive as reimbursement for your old property to acquire the replacement property. If you spend the money you receive from the insurance company for other purposes, and borrow money to buy replacement property, you can still postpone reporting the gain if you meet the other requirements. Similar or related in service or use. Replacement property must be similar or related in service or use to the property it replaces.

When I last posted a screen shot, I pasted it into a Word doc and that type of file is allowed here. The other thing you could do if you have a pdf converter is convert the file to a pdf to attach it here. That has also worked for me with some attachments.

Who's whimpering? I'm feeling like this today:

I've never had this error code, and the only times we've seen postings about this here have been when it was user error where the preparer inadvertantly had the boxes checked on the depedents' returns to claim themselves. Your only course of action is to paper file the returns. If somehow those boxes are checked on your parents' returns in the IRS system, then you will receive notices or if there is a change in tax. I'll apologize for anyone automatically assuming you were a nonprofessional. It was probably because your question involved your own return and those of your parents. Especially at this time of year, we do have regular people not in the profession post questions while attempting to prepare their own returns, and the members on this site are here to help other pros, not give out free advice to the public that might not understand the reason for our answers.

I'm with Lion and will go one step further. If she can't write off for medical because she doesn't have written order from the doctor or because there is no excess over the increase in value, then I wouldn't even consider this an increase in basis. If a house has mold, it certainly decreases the value because no one wants that, but I don't see it as anything other an remedial expense like other repairs that homeowners make. Now, if she dug up all around her foundation and had sealer put on and other extensive work done to divert water away so that her basement remained dry and mold-free going foward, then that I'd add to basis.

KC is correct, BUT the ATX program or any program will not know if the loss from the prior year was carried back and used in some preceding year, so you have to check the numbers, and if those losses were used, then they shouldn't be carried forward. You would have to make a manual entry to tell the program how much has been used, if any.

No, it isn't being deducted twice. Simple hypothetical example - a business income statement shows: Gross profit from operations $30 Guaranteed payments $20 Other deductible exps $18 Loss per books $ 8 1065 pg 1 will report the guar payts of $20 and will have an ordinary loss of $8 The income(loss) before any payments to the partner would be a profit of $12 and that's what partners will pay s.e. tax on (GP of $30 - other exps of $18), but it flows through from the 1065 in the pieces of guar pay't net of the ord loss. (20-8) Sch K and the totals of all K-1s will show: Ln 1 - Ordinary trade or business loss, line 1 ($ 8) Ln 4 - Guaranteed payments $20 Line 14 - (A) Self employment income $12 Line 14 - (C ) Gross nonfarm income $30

It might be picking up a figure for s.e. income from line 14, code A from the K-1. Did you prepare the partnership return? ATX calcs that automatically unless you override.