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I did exactly as Abby described when I last had an LLC with this issue. In my client's case, the LLC made the payments, not an individual partner. The partners are also my clients, so in those years before the debt was paid off I attached a statement to the personal returns and the LLC returns each year with something like this: Interest expense in the amount of $___ reported on Form 1098 in the name of ___ and his SSN ____ is for a property that was legally transferred to ____LLC EIN# _____. Bank continues to report that interest using the partner's SSN, however, that interest expense is now a debt of the partnership and is properly reported on the partnership return.

My guess would be that it was originally purchased in her personal name and transferred to the LLC but the bank wouldn't change the name on the debt. Haven't we all seen that before? But why is she still paying it personally? Yes, a total mess!

I did a google search that showed one of the top selections as a KB article from Drake. It indicated that 1040V could be used for mailing in the payment if the 1040X is being e-filed and said to pay particular attention to the address that the 1040V should be mailed to. The instructions for 1040X don't mention this method and encourage people to use direct pay on the IRS site or EFTPS.

No, the 5-month rule is applied for the purpose of determining whether the person is considered a "student" for the age test. For the residency test, the person must live in the taxpayer's home for at least 1/2 of the year. The 5 months before graduation is a temporary absence from the taxpayer's home, but it isn't long enough to meet the "at least 1/2 year" of residency part of the dependency requirements.

Husband texted me that he was running late and I answered with what was supposed to be "ok, thanks for letting me know" that I sent as "ok, thanks for loving me now." Then I started to send "geez, I should proofread before sending" which started to convert to "Cheese Arthur profit..." which started me laughing so hard that I had tears running. It was at that exact moment that a representative from the state's division of revenue returned my call. All I can say is that poor woman must think I'm totally nuts, and that it's a good thing I don't text much with my clients.

For the year the employee turns 21, you use the entire plan year's compensation, not just the portion after attaining age 21. One of the requirements for SEP plans is that the employee must have at least $650 in compensation in 2021 ($600 in 2019 and 2020) BUT PLANS MAY BE WRITTEN WITH LESS RESTRICTIVE REQUIREMENTS, and that sounds like that is the case of your client's plan. Be sure to recheck the plan documents for this though. If the plan is less restrictive by not having a minimum compensation requirement, then this employee would be a participant for 2021.

Does it also appear on the screen as black? Have you tried printing to your pdf printer first, or straight to your hard copy printer?

Agree with Dan, except that Pacun said that the taxpayer is a general partner. Pacun, keep in mind that the guaranteed payment of the majority partner is an expense against income to arrive at ordinary trade or business income, so it could be that the other partner paid enough in the 2020 year to create the loss you are reporting. It is possible that in a future year this partner may not draw out enough as guaranteed payments so that the restaurant shows some trade/business income, and your client's share of that will be on the K-1 and would be available to offset the loss that is being carried forward from 2020.

First, he has to have basis and have at-risk, which you say he has. I have no idea how to remove that check mark in ATX, so someone else will have to answer that. What type of business is it? Is it trade or business loss, or does it have something to do with rental real estate? His lack of participation or no other passive income is why the loss isn't currently deductible. PALs can only offset other passive income. If he doesn't have passive income and this is rental real estate, then the only way the loss would be allowed is if he has active participation, or material participation as a real estate professional) in this activity and under $100K of modified AGI, and that is phased out once the MAGI reaches $150K.

Yes, I'm usually done by now and I have a few clients that haven't brought in the raw data, are very slow to respond to questions or supply missing information, or are not interested in filing until closer to the May 17th deadline. I can't convince a couple that the returns can be e-filed now and pay the balance owed within the next month, so I haven't received the signed authorization forms back yet. It's annoying.

Pub 590 has a complete chapter on Roth IRAs, and you will use form 8606. I'd suggest you review both the pub and the form's instructions.

I am curious if this was a blunder to cash out wife's half in settlement of their assets due to divorce that could have been easily handled with a QDRO that would have avoided this headache and saved tax dollars too!

How about reporting wife's share of gain as a negative adjustment on Form 8949 with code N. This is from the 8949 instructions for code N: If you don't like that code, there's code "O" for any adjustments that don't fit any other codes listed, and you provide an explanation. Are you preparing the wife's return too?

Ed, clicking on the pdf within the post doesn't access your computer. You actually uploaded a copy of the pdf to the forum, so the pdf that people are accessing is stored there in your profile as an attachment. You are always able to delete the file from your list of attachments, but you can't alter the post. If you delete from your attachments it will just be shown in the post as a document that is no longer available.

We may know more about our clients than any other professional they interact with except maybe the hairdressers. The doctors, lawyers, and brokers know some pieces of the clients' puzzles, but we know just about all of it and then some - finances, employment problems, medical issues, education, debt troubles, relationship status and drama, all about their kids, vacations, family drama, you name it. Many subjects stem from the range of items that we deal with on the tax returns, and then they feel comfortable sharing all sorts of information! I guess they feel I'm a good listener and am nonjudgmental, and my home office may also allow them to relax and feel more comfortable compared to a more formal office setting. Some of my clients came from the firm I worked for and I've known them for over 40 years, so it's not hard to know a lot about their lives when the relationship spans many years. It's sad too, to see how some have declined in their old age or have died.

Yes, the software should attach the required copy if you are e-filing the returns. DE allows a part-year resident to choose to file either as PY or as full year resident return, so if you are choosing to file as full year resident, make sure to claim a credit for any tax paid to other states that is also being taxed in DE. Also, if you do claim other states' taxes as a credit, then don't take those as a deduction on the DE Sch A.

I have only 4 or 5 that I've never met, all referrals from existing clients. I have met in person with only five clients this year; the rest have dropped off or sent documents electronically. I've waved or talked briefly with a few from a distance when they showed up in my driveway though. Of course I did see a few last year before the shut down but none after mid-March, so I really haven't seen most of mine in two years.

You don't prorate the DE Sch A deductions, the form will do that for you. The Federal AGI and full DE schedule A from pg 2 of the DE return come over to page one and the tax is calculated on that, and then the tax is prorated for the % of DE income compared to the Federal. That is how the state gets someone into the higher brackets.

To be clear, I wasn't suggesting that as a course of action and was providing anecdotal story of how little is done here to close out. Obviously everyone should follow the laws of the state(s) in which the entity is formed +/or operates.

You know, this is somewhat similar to the other topic we currently have about the NC couple that's always filed MFJ and are in common-law marriage that is not recognized in the state. I bet that if the parents of your deceased client walked into a chain tax prep outfit or preparer that didn't know the family, that this young man's final 1040 would be filed with the full W-2 and claim the mortgage interest too. It wouldn't be correct, but it would never be questioned either. I'm not suggesting anything, just a statement on how much that is wrong escapes scrutiny by preparers and the IRS.

I don't know offhand, and this is why it would be important to have that W-2 corrected. If I had to guess, I'd say that it would be net of the IRD because that is the correct amount that should have been reported on the W-2. If you go the route of filing with the W-2 as is, are you going to also include form 4852, and do you have the last pay stub as proof that the last pay and vacation time was paid after the DOD?

Same as Lee. I've maybe seen one 966 in my entire career. Most lawyers around here advise to not even notify the Sec of State but to just not pay the franchise tax and the corp will go into inactive/certificate not in good standing, and after 3 years of that status it drops off the state's record.

Yes, if he meets all the requirements of claiming the EITC, the fact that he didn't live a full year doesn't matter. IRC sec 32(e) addresses this:

Did the client receive a NJK-1 from the partnership? If not, if you complete the Partner's Reconciling Worksheet A? NJ doesn't split the different types of partnership into its various components like the Federal return does. If you look at the reconciling worksheet, you'll see that basically all the items on the K-1 are kept in the category of partnership income or loss, so it would be wrong for you to enter that loss directly on D/8949. This pdf is from the NJ Dept of Revenue's site that should explain this more fully: git9p.pdf

Yes, it is, and the client does need to file the 709 for that gift.