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I see what you mean about the Option 1 worksheet, because I input enough in a practice return to force the NJ2210, and I also tried it in 2019 with the same issue you are having. I don't see any way to override this calculation or line 51 of the NJ-1040 in Drake, and it doesn't seem that this is a NJ error but IS a Drake error. You have only the options to print or suppress the NJ2210. I'm sorry. I think you should call in to Drake's support if you haven't done so already. From the instructions below that worksheet, Col E is clearly intended that it can be a negative (based on instructions for Col G that says "if Col E is negative") and Col B is also allowed to be negative (based on Col C instructions that says "if Col B is negative...."). ETA - I also posted this in response to your same question over in the Drake forum so that others may see what answer you've already been given and won't be starting over with saying the same thing or may refute my idea. I'd also like to see the resolution to this issue because I have some clients that work in NJ and may run into this in future.

What is in 1st qtr column A, line 13? Is that not carrying over to col B, line 7 and so forth? Was the 1st qtr estimate paid timely on or prior to 4/15/21, and is that entered correctly in the software? Is this ATX or other software?

Wow, interesting read. Thanks for sharing this.

Yes, I noticed this too. The worst was the when all the technical people assigned to the accounting program were helping with tax questions even though I'd called the phone # supposedly dedicated to the accounting support. Then the person proceeded to chastise me for expecting accounting support help saying "you know this is tax season, right?" and my answer of "yes, and you know this is 3 days before the Jan 31st filing deadline for all the information returns, payroll returns, and W-2s that I should be using your program for but am unable to do so." You know when I got the call back with help for their program that was stuck in an update loop and wouldn't load - it may have been around Feb 3rd after I'd used an online vendor for my filings, filed W-2s directly on SSA's site, and hand-prepared the 941s and 940s and mailed them in. At that point on Feb 3rd, I would never need to use the program again, ever. What a complete waste of time and money for that less-than-useless program. Tax support was fairly useless also.

Slower than usual. I had one submitted on the 15th and took 3 days to come back. I'd assume that the last couple of days of the filing season are even worse, and I wouldn't worry as long as you transmitted before the due date.

Yes

To answer Christian so that he may make sense of how this should be reported: Christian, because your client used MACRS SL deprec, you are correct that there is no recapture of excess depreciation like happens with sec 1245 tangible property. That would be where that portion of gain is split out and the recapture portion is taxed at ordinary rates. That is NOT what is happening in your case. What is happening - when real property is sold (sec 1250 property) that has been depreciated, that portion has the potential to be what is called "unrecaptured sec 1250 gain" and that portion of the gain equal to the depreciation taken is carved out and can be taxed at a special rate up to a maximum of 25%, and that rate depends on the taxpayer's tax bracket. Obviously with that carve out, it may be possible that the unrecaptured portion exceeds the total gain, but basically, carve it out and split the gain into its components that are taxed at different rates. As cap gains, both of these portions of gain are able to be offset by cap losses, again obviously within the cap gain/loss rules and mechanics of Sch D. Here is an example that may help: Real property purchased $150K, accum deprec $30K, adjusted basis $120K Sold for $185K, generates an overall gain of $65K Unrecaptured 1250 gain is $30K (the amount of depreciation) and is subject to the higher cap gain rate with max of 25%, and the remaining gain of $35K would use regular cap gain rate.

anyone?

You may want to have the client pay the 1Q'22 estimate now. Yes, it will be late, but will help minimize any 2210 penalty, if any, by paying that as close to the due date as is possible. Client's options now for paying the 2nd, 3rd & 4th estimates are by check, direct pay, or EFTPS.

So do I, and the current filing should update banking info in the states' and federal systems.

Catherine said this started as a state issue though.

Never seen it either. How did that happen?

It's 41 yrs for me and not thinking of retirement yet either.

https://www.irs.gov/taxtopics/tc206 https://www.irs.gov/payments/dishonored-check-penalty Must show reasonable cause and that the taxpayer had the expectation that the payment would have been honored.

Use federal form 5695 if it's the 26% Federal (ITC) solar credit you are asking about. It's not at the state level.

I am, maybe. I spent the morning waiting at my mom's house for Comcast to come fix her cable and am going to watch a White Sox game next.

Next section below that in same IRM under #3

From IRM here: https://www.irs.gov/irm/part3/irm_03-017-278#idm140034069386688

I've seen that IRS will try to w/d a payment on an installment agreement on the next scheduled date, but that is not what you asked. Not sure if it would try to resubmit in the case you described, but pretty sure it wouldn't take a different amount than was authorized. The IRS may eventually send Letter 608C Dishonored Check Penalty, but at this point I'm not even sure if this letter is one that the IRS included not sending in its recent effort to get caught up on the backlog and had recently stopped its computers from sending out repeated letters. The way to know for sure is for the client to verify with his/her bank. Sorry, not much help.

Ah, correct. I used c&p from another of my older posts. Will edit further once I get back to my desktop. Editing on a phone has some limitations and less functions for me for this site in particular.

Yes, a 709 is filed for the gifted portion. There is no gain that would qualify for exclusion because it was sold for less than basis and generated a loss, and the loss is disallowed because it was sold to a related party. More on that at the end.... **ignore this part, doesn't apply to you** ---> Sec 1015(a) of the tax code places a limitation on the gifted basis so that a loss cannot be transferred by gift from donor to donee, and no one can ever deduct that portion of a loss. If and when the recipient disposes of the property and does incur a loss using the lower basis under the dual basis rule, the loss is limited to the the amount of loss beyond the reduced (dual) basis for computing the loss. In other words, the recipient would never get the benefit of the decline in value from the original donor's cost to its lower FMV at the time of the gift, but CAN take loss beyond that once in his or her ownership. *** I am curious how parents have basis in the home for $520K, have lived there for 17 years, and now it has a decline in value when prices have done nothing but go up significantly, especially in the last couple of years. Is the property in such disrepair that there was no increase in value in those 17 years?

My unresearched opinion is that the installment note is still in place. Taxman said all terms are the same, funds were held in escrow and returned to purchaser with nothing actually touching taxpayer's bank accounts. Seems to me, all that really happened was to remove wife's name and rewrite deed of trust transferring the note and its security interest to the husband. I don't see how this turns into any sort of straightout promissory note where remaining gain is recognized no matter what the attorney says. He's not the one signing the return as preparer or taxpayer. If that is truly the case, the attorney should provide the documentation and tax code sec research that shows how this is possible. That's the CYA that I'd want in my file, because I'm the tax preparer, not a tax attorney.

Also wanted to add this is been a very interesting discussion. I've learned something from from these posts and topic. Thx.

Taxman's original post said that the deed of trust was rewritten, so I think that would provide a security interest.

A handful of extensions have been filed and 3 returns waiting on signatures in order to efile, and those will be in today. It's been a harrowing couple of weeks trying to get caught back up after losing days of time because of husband being hospitalized for a few days mid-March and then working day and night on about 3-4 hrs of sleep a night since then. I'll be around here to help where I'm able over these next few days, and of course the rest of the year. I want to express my sincere appreciation to every member that selflessly contributes to help others on here. I learn a lot from reading all the posts and seeing the ways that you all approach some issues differently than I would. You all are amazing and are what makes this such a great site! For me, it is also a needed distraction at times too. Thank you all for another great season.