jklcpa

Thanks for the link to the bill. It passed the House and latest action in the Senate was in the fall of 2019.  I'm not going to worry until it passes, at least not at this time.

Not that it means anything, but I haven't heard about this. Do you have something authoritative to share on this?

The definition for responsible party is here at this IRS page, and is currently also found in the instructions to form SS-4.

3 hours ago, cbslee said:

I already know that my Win 10 desktop will not run Win 11.

Mine won't either. I believe it's an internal hardware issue.

Thank you.all. I did tell her to talk to the bank to see if the deposit could be rerouted. I haven't heard back if that is possible. 

4 hours ago, Christian said:

He set up a house he inherited from his mother last year and posted a loss from that but his income prohibits taking this passive loss against regular income sources he has W-2, interest, dividends, tax exempt interest and a pension inherited from his father. Could this loss be applied to the capital gain or rather part of it realized on the sale of his older rental and if so how is that reported ? 

The passive activity loss in the current year or the suspended passive losses from prior years CAN offset the gain on sale if it comes from a passive activity.  It must be a complete disposition that creates that gain, and it should all be handled through form 8582.  Sorry I can't help with your input as you know I do not use ATX any more.   

Affects PA state return only.
Client called and said her checking account was hacked into and recommended opening a new account to change account number.  Anyone know if it is possible to change the account for DD after the fact, or how long PA is taking to issue refunds?   Returns were filed on 4/11, so not long ago.

2 hours ago, giogis245 said:

Client bought 2 investment properties in 2022, they renovated them completely, between the 2 units they spent $50K in new furances, kitchens, floorings, lighting, paint, bathrooms in material and labor. Their contractor buys the materials and they just make a check out to the contractor for material and labor then send him a 1099. Just seems like such a big number, can they really write off all of it?

5 minutes ago, Margaret CPA in OH said:

And look into segregation of items that could have different lives but have to be identified.

Expenses for repairs and renovations prior to being placed in service must be capitalized and depreciated. IRS Reg. § 1.263(a)-2(d)(1)).   Repair expenses after being placed in service must follow the repair regs, and Abby Normal's second link takes you to the IRS page as a starting point.

I agree with Margaret that you should segregate as much as possible because there may be some items may have shorter lives (such as kitchen appliances) vs improvements or items considered part of the building that are depreciated over longer lives. 

2 hours ago, Catherine said:

Take it easy today.

Haha, I'm sitting in a line right now at motor vehicle waiting to get a car inspected. Not much fun!

I did something yesterday though that I'm very happy about. I made my final mortgage payment.

6

1 hour ago, Chowdahead said:

  I seem to remember a 24 hour rule....

That's the time frame in which the ERO has to notify the taxpayer if the rejection error cannot be rectified. That's from pub 1345.

This whole topic from April 2022 has a discussion that may help you make sense of the 1250 gain and how to best explain it to your client.  Edited - don't know why it started with my post from that earlier topic, maybe where I left my screen.  Interestingly, this one was also started by Christian.

I'm with Robbie about trying to finish by the April filing deadline.  My workload has diminished with clients' business retirements and a few moving away, and because I'd hardly been able to take on new work with the increasing demands of mom's care over the last 5 years.  I worked long and odd hours to complete all but one client. That one person is always late and involves a personal, 2 partnerships, and a fiscal year C corp that is now late beyond its expired extension.  *sigh* some are never able to be trained or changed.  

10 hours ago, Yrags said:

So, back to this topic. I have a question about proper reporting. I also have mucho sales of inherited stock. I created a spreadsheet showing the reported basis and the basis as of the DOD.

On Line (e) Basis, do I put the DOD value, or the reported (earlier) value, with a code in line (f) and an adjustment in (g)? If a code, which code? I can see using (B) Basis Shown is Incorrect, or (O) All Other Adjustments. I looked in the 8949 Instructions, and it's a little unclear, as it does mention doing either but does not mention specifically when inherited property.

Thanks!

If the basis was NOT reported to IRS, then you would enter the basis at DOD from your worksheet. No code or adjustment is needed in this case.

If the basis WAS reported to IRS, then enter the basis shown on the 1099B and enter code "B" in col (f) and enter the adjustment to basis in col (g).  Code "B" is for incorrect basis reported to IRS.

For either case, use "inherited" for date acquired and all of those sales will all be considered long-term.

30 minutes ago, Abby Normal said:

One of my customizations of the 4868 in ATX is to link the prior year tax from the Comparison form to the 4868. I figure last year's tax is better than a zero, especially if I have no documents from the client. Programmers should add an option to the 4868 to use last year's tax rounded up to the next thousand, to make our lives easier.

I am missing a few 1099s for the one I'm asking for, but if I used that method then and using the information I do have so far, the tax reported on 4868 would be substantially understated b/c the client took an additional ~ $133K out of his IRA in 2022 without notifying me and didn't pay any of the quarterly estimates I'd set up. He did withhold federal tax @ 20% but is in the highest bracket.

For those of you that file extensions with a taxes owed but no payment with the 4868,

• do you show the the actual projected figures and tax due not being paid, or
• do you show the tax and the total of withholding and estimates as the same amounts so that the math comes to the zero payment?

I do as BrewOne by using the 8878 only with electronic funds transfer.

12 minutes ago, BrewOne said:

The IRS would have to decide it was worth the effort to invalidate, it would not be a routine matter.  But they can certainly set the computer to assess an accuracy-related penalty if xx% or more of taxes owed had not been paid in by the deadline.

Per 4868 instructions, IRS considers that if at least 90% of tax is paid in by that extension date and if tax bal due is paid when return is filed, then that constitutes reasonable cause for not paying with the extension and late payment penalty won't be assessed. 

Sorry on my phone and having trouble going back and forth to the docs. 

I looked at ChatGPT's site for a few minutes and have been receiving emails from it ever since then... without giving it my addy. 

30 minutes ago, cbslee said:

I wonder if anyone has ever run in trouble by filing a zero estimate when there was tax due.

I don't have any clients now, but I certainly used to have clients where I filed a zero estimate.

I've done this many times over the years too and never had an extension deemed invalid either. Obviously anecdotal. 

Would any of them know the difference? 

Donated today!

4 minutes ago, cbslee said:

I prefer the Direct Pay option, because if the efile is rejected the Direct Debit will be late.

Direct pay also puts the responsibility for payment back on the taxpayer instead of the preparer.

40 minutes ago, JJStephens said:

Does anyone know if the instructions page included with Form 1040-V (payment voucher) can be modified? I'm not real happy with the line that reads: "To pay using your bank account (at no extra cost to you)..." It might sound dumb, but I'm afraid some of my clients will see that and think it's a painless way to 'pay'.

I'd like to modify it to say, "You can pay your balance due directly from your bank account (with no additional processing fee) at irs.gov/payment or by credit/debit card (processing fees apply) at 1040paytax.com." Can that be done? I've looked everywhere I can think but haven't found a way to do it.

Yes, from the "Setup" drop down menu:

Choose Communications Editor,then

• on the left side, click the + to the left of Federal Return Paragraphs that will open up all the available places  you are able to modify.
• Double click on Federal Balance Due paragraph, and more options will appear to the right side,
• On the right side, click the + next to Federal Results Section if it isn't already expanded
• Doubleclick the selection that says "Federal Balance Due Paragraph" and the editor will open the editor where you will be able to modify any of the payment option paragraphs that Drake uses.

Done! Thanks for the reminder.

Similar topic and discussion from late last month:

Horrible year personally but the work was OK. Everything is worked on and out.  I try to aim for around the 10th or 12th to get most done and give myself a cushion of time. I have one client meeting today for pickup, and then I'm waiting on signature forms for the rest. I will have only 3 extensions, all for one client for his personal and 2 little partnerships.  I took yesterday off!

I've been taking care of mom full-time for the last 5 years with increasing demands the last year or so.  Now at 96+ yrs old, early dementia and was still living at home until a fall in late March. She was unhurt, but it landed her in rehab.  Three days in she, I, and my husband all got a nasty GI virus circulating in that facility. I was completely down for a few days and feeling sick most of a week. Then a second hospital trip with her last weekend and another night with no sleep because rehab made a bad call on when in actuality she had lower rib and hip pain radiating. After all night in the ER told me to give her some extra strength Tylenol and that transport would be another 6-7 wait.  No way! I drove home for her van and took her back to rehab myself at 4-something in the morning!  In the next few weeks I have to find permanent placement for her somewhere and begin to clean out the family home that she has lived in for more than 70 years.

Because of mom's needs, I haven't taken any new clients in these last 5 years and most of my business clients got old, retired, and/or sold their businesses. My workload is much lighter than it should be now when I should have been building my practice and couldn't.  That is some of the reason I've had some extra time in the past few years to answer lots of questions here, away from the office and the internet to fill up time.

Husband is doing well with fighting the bladder cancer, the prostate cancer is treated and gone, and other issues were fixed in '21 that were heart ablation and AAA repair.

When a SIL passed suddenly last June, I started walking with my brother in the very early morning and have gotten more fit again.  I'd walk anywhere from 3-5 miles every morning until the time changed and everything fell apart with mom.  I wanted to walk last week but in the turmoil I ended up with a twisted or sprained ankle that I'm babying at the moment. I don't know how that happened but it's getting better.

Also thanks to two brothers, my husband and I have taken up shooting sporting clays, or some may still call them clay pigeons. They are all excellent marksmen, so I have lots to learn and catch up on. I love the outdoors and all kinds of activities, and this is the latest and one I never dreamed of trying. I bought a shotgun of my own.  We took advantage of yesterday's beautiful weather, went shooting, and got away from all the pressure for the afternoon. I'm slowly improving and was pleased with my progress on a more difficult and new-to-us course.

If you made it through all of that, thanks for reading!