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I was responding to Abby's statement that he's "never" seen the purpose of AAA. I thought that was rather obvious since my post directly followed his and considering the title of the article itself. It was meant as food for thought for all of the readership, so in future I will state something much more obvious to that effect and make sure to quote the person I am responding to so that everyone is clear on why I post something. I wasn't suggesting anything more than that. Also, as to your comment about E&P not being a factor, well maybe and maybe not. I'll agree that it may be more likely than not, but you've been around long enough to have seen the many times posters here don't know what to ask and do not give all of the facts until badgered with questions from those more experienced asking for more information or clarification. You yourself suggested that this preparer may not have the experience needed for this engagement.

The Tax Advisor article "The importance of tracking AAA and E&P in transactions involving S corps" https://www.thetaxadviser.com/issues/2017/aug/tracking-aaa-ep-transactions-involving-s-corps.html

Agree with Lee, and the withholdings allowed by SSA are flat percentages, and iirc, that percentage is applied to the net benefit after subtracting the Medicare premiums. You can test that from last year's 1099. If you have last year's 1099 for the gross figure, it should be relatively easy to get to the current year's gross without the 1099. You know the COLA increase and the monthly medicare withheld, then look to last year's withholding % and apply that to the current year's figures. For FWT, the recipient may choose from the following %s to have withheld: 7, 10, 12 or 22%.

Per share-per day is the method you've always used. Splitting into 2 separate parts of the tax year is an election and requires signed consent of all parties. You should calculate the effects on the pass-through items and on each shareholder's basis under each of the methods and allow shareholders to decide. Does the shareholder agreement specify which method should be used in the event a shareholder leaves, dies, sells shares, etc? A couple of (older) articles: https://www.thetaxadviser.com/issues/2008/dec/allocatingpassthroughitemstoscorporationshareholders.html https://www.thetaxadviser.com/issues/2010/dec/clinic-dec2010-story-09.html

Tax Advisor article on COD income in pass through entities, effect on tax attributes, and basis adjustments. It does also have a subheading specific to S Corp handling, but read it all. https://www.thetaxadviser.com/issues/2015/may/tax-clinic-06.html

No, that is only for discussing the 6% tax on excess contribs. I agree that the 6% penalty does not apply. In my original post, I gave you the direct instructions from form 8606 that tells you to include on 1040, line 4a the total withdrawn to correct this (the total of the excess+earnings). Then, 1040 4b, include only the earnings. The earnings withdrawn will be taxable, but not the excess contrib itself. Also, remember that it also tells you to attach a statement of explanation to the return. In addition to the 8606 instructions I'd posted earlier, here is the snip from the instructions for 1040, lines 4a & b:

^^ what Terry said, and the earnings returned goes on line 4(b).

Excerpt from the form 8606 instructions: Return of IRA Contributions If, in 2024, you made traditional IRA contributions or Roth IRA contributions for 2024 and you had those contributions returned to you with any related earnings (or minus any loss) by the due date (including extensions) of your 2024 tax return, the returned contributions are treated as if they were never contributed. Don’t report the contribution or distribution on Form 8606 or take a deduction for the contribution. However, you must include the amount of the distribution of the returned contributions you made in 2024 and any related earnings on your 2024 Form 1040, 1040-SR, or 1040-NR, line 4a. Also include the related earnings on your 2024 Form 1040, 1040-SR, or 1040-NR, line 4b. Attach a statement explaining the distribution. Also, if you were under age 59½ at the time of a distribution with related earnings, you are generally subject to the additional 10% tax on early distributions (see Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, and its instructions).

The quote below is from the 1040 instructions below the chart for most people and who must file. That being said, keep in mind that the IRS AUR system goes only by the gross proceeds received and so the taxpayer will receive a notice because it doesn't factor in the cost basis, so in this case I would file the return. Also, parents can't elect to report this on their return because Sch D cap gain transaction is involved. That election is only available if minor child has only interest and dividends.

Instructions are included right on the form. See the section "When To File". Of course you are going to keep a copy of everything you give to the client.

Taxable. You can't rely on anything an IRS representative answering the phone tells a taxpayer, and especially if you were not privy to the conversation and know exactly what your client told the person or asked.

They can allocate it using any percentages they want as long as they are in agreement. They must use the same percentages for all of the months. Yes, you could give 100% to him and 0% to her. If they can't agree, then it is split 50-50 to each. The following is from the 8962 instructions.

Stick only to the above and I won't delete the topic. We aren't going to discuss Musk, his strategies, whether or not he can or can't be stopped, or anything else remotely related to his actions. Tom, thanks for trying to be diplomatic.

I haven't heard anything that specific, only that layoffs during the season are to take place and that services will be affected.

Well, it could also be one of these: The credit is limited to the regular tax, so if he had no tax, then no credit. Or if tax was less than the credit, then the credit is limited to the tax. Another thing that could be happening to some taxpayers is if the tentative minimum tax from 6251 is more than the regular tax on the 1040, then it appears that the personal portion of the credit is NOT allowed, and line 9 of the form 8911 says "do not file this form" unless there is also a credit on line 3, and line 3 would be the business portion of the credit. Would any of that be a reason that your form isn't being produced? ETA - I tested #2 above by entering enough AMT income to create that situation on one of Drake's test returns. Once tentative minimum tax on the 6251 exceeded the regular tax, Drake no longer produced the 8911 but the 8911 Sch A remained in the return and showed the credit on line 21 of that schedule, but it did not flow to the 1040 Sch 3, and no credit was allowed.

Did you have the little box checked to the right of either line 6b or 6d? And the check box filled in at the very bottom to indicate main home? Mine didn't work without those. It seemed that if any one little piece was missing, it wouldn't work.

I got it to fill in Sch 3, line 6j by entering all of this input: Go to screen 8911 and fill in T,S,J, line 2a needs an entry. I entered "taxpayer main home", then continue through with entries for actual home address and owner's TIN in the appropriate boxes Entries for lines # 4 and 5 - enter dates began and placed in service Either line 6b or 6d - I HAD to enter a census tract GEOID on one of these lines and check the box to the right that indicates which appendix that number is located. It would not calculate or populate the credit without this information. I think that is located in the the form 8911 instructions with a link there to those Appendices. Line 8 - enter the cost of the refueling property Line 9 - if this is entirely personal use, enter ZERO line 11 - I left this blank assuming if it was all personal use there would not be any sec 179 deduction Line 17 - be sure to check the box to indicate the property where this is installed is the taxpayer's main home With all of this entered, it created the form 8911 with Part II filled in and also created form 8911,Sch A with parts I and III completed and also the cost of refueling property on line 8 of part II. This is everything I had to enter for a credit to calculate and flow to the correct line on Sch 3 of the 1040. I haven't filed one of these for any client, so judge for yourself if these entries and results are appropriate for your client's situation. The 8911 will transmit, and appears that Sch A has to be attached as a pdf, but Drake has that completed and should create the pdf for you to attach in View/Print mode. Hope this helps.

What anti-virus software do you use?

I'll be surprised if this new user comes back or is an actual preparer. This topic was one where I moved the post after this person tried to revive a topic from 2009.

Those # of views include bots, webcrawlers, etc. so doesn't mean members that can actually post an answer. I'm very far from CA but took a brief look that the instructions, so don't take my word for this, and maybe a CA preparer will comment whether these entries would work: Indicate coverage for Jan, then use code "C" for a 3 month short coverage gap for the months of Feb through April, and finally use code "E" for the period from May 1 through Dec 31 as a nonresident. Technically, this person wouldn't qualify for the short coverage gap because it is actually more than 3 months, but at the point of May 1 the person is no longer within the state and definitely qualifies to use another code, but I don't know if it would work or not.

You should fill out the support worksheet, and remember that whoever took out that loan is the one that provided that $8500 of support, and the scholarship isn't used in the calc of support.

It isn't tracked separately by business because the regs say that the QBI loss carryforward is treated as if it is a separate business. reg sec 1.199A-1(c)(2)for computation when income doesn't exceed threshold and 1.199A-1(d)(2)(iii)(B) when income does exceed threshold. Regarding the loss carryfwd, both sections say the same thing:

Was there any net unused QBI loss on the 2023 joint return that is carrying forward to 2024?

Yes, we were typing at the same time.

Yes, the superseded return is similar to an 1040x but it replaces the original instead of changing it. The reason the parent's return was rejected is obviously because a return was already filed using that SSN. That's why I said to replace that kid's return by making it belong to the parents since the dad's SSN was used to file it. The IRS system actually thinks that is the dad's income on that return. Superseding that return with all of the parent info will correct that record filed under dad's SSN and will change the filing status from single to MFJ and whatever dependency was claimed, because if the kid should have checked that box for being claimed as a dependent, the IRS system thinks the dad is being claimed by someone.