Pacun

21 hours ago, Lion EA said:

In Pacun's example, he bought a coin with a coin. That would be a sale and a purchase, right?

Yes. This is a real life example. (OR should I say a virtual life example?)

If I purchased in Metamask $20K of LUNA coin and $10K of ETH coin.  My coins did well and LUNA is now $50K and my ETH is now $40K. I want to convert my LUNA to UFO.  By doing that I will sell my LUNA and I will sell part of my ETH because that's the gas that will push my shipment. In this case the cost the gas for my transaction is $2K. I need to recognize profit on both coins and part of that profit will be deducted as an expense. The basis on my UFO will be $60. 

Binance.us follows the same principal except that the gas comes from BNB coin or from a reduction of the coin being purchased if you don't have BNBs and it is called a "fee". 

There are also income for staking and for referring another client to the exchange.

Virtual coins are becoming a reality... embrace it!

The tax portion of crypto is and will be interesting in the near future.  

You have purchase a coin for $30K and then you need to purchase another coin for 10K to be use as gas.  Failure to have gas will mean that your "shipment" of the goods or the order will make it only halfway to its route and unless you put more gas, it will not complete. So, lets say that my coins have double. Now I have $60K and $20K.  From your $60K, you purchase another coin for $5K. The gas cost is 2K. The basis of your new coin should be $7K and you will have to pay taxes on $2.5K and 1K, correct?

What if I convert the same coin to fiat? will I pay taxes on the same amounts and have expenses for $1K?

If I get a hardware wallet, how will I depreciate that wallet?

Admin, we might need a new forum for Crypto because this will be nightmare sooner than later.

Crypto is like any stock except that currently there are no wash sales. 

The case of locking coins and receiving income is like having your money in a CD.  Technically it is interest and it will increase basis. This is a very interesting and common subject in the next couple of year.

I understand that if I use fiat to enter the crypto world, I don't have to report anything unless I "lock" my coins or tokens to earn income or sell them. But how about this: El Salvador uses bitcoin as its money along with the dollar. Less than a month ago, I activated my Chivo wallet and it came preloaded with $30. Right now it is about $42 or a bit more. If I don't sell this coin, should I report the $30 dollar? Is that a gift from the Salvadoran Government to its inhabitants? The idea was to give $30 to every body who register to force them to use bitcoin... which most people sold for dollars at a discounted price. What if I sell the coin, should I report the $42 dollars with the assertion that my basis was 0?

Upgrading from 7 to windows 10 was so easy and the license from windows 7 was good for windows 10.  I updated my computer and everything works properly, but it is slow. At first I thought it was not going to take the upgrade but it did and I am happy with my old computer being able to be online and refer back when I need to print 2015 returns. If you can put your hands on a Windows 10 upgrade CD, put the CD on your Windows 7 machine and you will have 5 more years on your OS.

What kind of judgment? Labor, Health, mental, medical negligence?

Chances are 100% that the IRS will duplicate the 1099misc and 1099NEC. Subcontractors will received a letter or bill from the IRS about the second form eventually.

Go to return manager, highlight the return without opening, you should see when it was filed and the refund amount.  Is that correct?

Open the return from efile manager and see if you still get the same results. 

Check if you have a setting moving the completed returns away from your managers.

Lion EA,

I think we still have to report it.  Let's say I filed my taxes and I paid taxes on $20K. I take $10 of my after taxes money and buy bitcoin. In December, my bitcoin value is $160K and I buy a Mercedes, buy a plane ticket, rent a hotel and purchase meals on my trip... all with bitcoins. I will have to report that $150K, correct?

Open Firefox, click on the three horizontal lines at the very top right corner, options, privacy & security, scroll down to "cookies and site data" and click "Clear Data".

Scroll down to "History", click on "Clear History", on the "Time range to clear" select "Everything" and make sure you check mark all 7 boxes and then click OK. Exit firefox and open it again.

I didn't know that a village (playa el Zonte) in El Salvador was a bitcoin location for a few years. They even have an ATM for bit coins. It is very interesting to see how people, who didn't know how to read or write, were using their cell phones to pay for pupusas and other daily purchases.  If I prepare the taxes for a person who has been buying these little items with bit coins, do I have to file Schedule D?

If you have purchased bit coin or other crypto currency, do you suggest any potential crypto that could be a good investment?

I won't be surprised if they make it retroactive to stimulus 1 and 2.  Very interesting.

On ‎6‎/‎1‎/‎2021 at 11:40 AM, Chowdahead said:

I was thinking the same thing, but I assumed that if the reported amount doesn't match was was reported on the 1099-G, it may cause it to be flagged anyway.

The entry with less flags is adding 1K to the existing 1099G. 

I have not seen a bigger flag than paper filing these days.

TP has an ITIN and two US Citizen children. Will that person receive the $2800 2021 stimulus?

Two of my clients have called me and told me that their cousin, friend or co-worker with ITINs have gotten their stimulus for the children.

I know that ITIN holders don't get it only the mixed families but I want to double check.

Since the standard deduction is big... you could just enter 11,341 as unemployment and that will make room for the 10% withholding.  I think the IRS will appreciate that efile because paper filing is a pain for everybody... including the IRS.

On 5/29/2021 at 10:00 AM, KIfyhaM said:

 Any advice or suggestions?

Make sure you treat your work machine as such. Do not install anything that is not work related, don't have those cool screen savers, toolbars and other programs. Do not open multiple clients or don't open ATX for 2019 and 2020 at the same time. Close all unneeded programs while doing taxes.

I have not had any ATX issue except that when printing big returns, it freezes from time to time.  I had that happened about 4 times during this tax season. 

When purchasing ATX, let them know that you want to import your data.  They will ask you what software your are using to access the data to be imported and they will give you instructions and advice you of any incompatibilities. 

3 hours ago, Margaret CPA in OH said:

I had a situation whereby I had submitted the federal return and, as always, held the state return.  In the interim, client provided additional information so I chose Amend return on the by now accepted federal return.  Nothing actually changed on the state return so it was not amended.  I submitted the 1040X and after acceptance, submitted the state return.  Client has copies of everything as do I in pdf form.  That was in February or so.  I've heard nothing and do not expect to either.

So, you submitted an amended return to the State without filing a regular return?

I don't have step by step solution but this is what I did with one return.

make a copy of the return that you sent to the IRS. 

Go back to the original one and add the expenses and efile NY.

Go back to the newly created copy, select amend return. This will create a copy again of the return.  Go to the copy of this return and open 1040, add the expenses, then go to 1040X, make sure the changes are correct, add the explanation and create the efile for Federal. Transmit the efile to Federal only. 

Make sure your client has copy of the original filed 1040, the NY filed return and the 1040X return.  I am not sure how NY or the IRS operates but most likely the IRS will send a note to NY and say... "this guy amended in 2020". NY might wonder in a couple of years why you didn't amend NY.

Maybe the W-2 he brought was from his sibling and when his sibling paper filed, the IRS knew only one is legit.

I always insist for my new clients to show me their SS card, not only for situations like this, but also because I need to match my filing with what is listed on the SS card.

What kind of computer do you have? How much memory, Solid state drive, etc?

Wow... NICE post. 

I am glad this season is over for me. I also want so say thank those who post questions and thank those who take time to answer our questions. 

I have a client who has only the last paycheck stub.

In the past, I have mailed those returns but now I want to efile.  I need to fill out the W-2 and the substitute W2 in order for the amounts to be correct on line 7?

3 hours ago, jklcpa said:

For IRS, the tax forms (1040 series, 1065, and 1120 series) all have a "name change" box near the top.  Check that and it will change the IRS master file.  You could write to the address where the return is filed, but I've never bothered.

YMMV for the state(s) and their various depts.  My state DOR requires it in writing for a global change for all its separate depts (withholding, inc tax, gross receipts tax, unemployment) and DE Sec of State for franchise tax is completely separate from DOR and definitely requires notification along with a fee.

Thank you. 

I file client's ifta every three months. Ifta is asking for the IRS letter with the new name and same EIN in order to update the IFTA information. Ifta needs to match to the new name. 

Pacun.llc was cancelled by the state. 

State allowed the name to be Pacuns.llc because they sold pacun.llc

What should I do with the IRS, will the IRS allow my client to keep the same EIF and add the letter to the name?

Can you create a new client?

As you know, you can update the program or update the forms, have you done both?