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Max W

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Everything posted by Max W

  1. So, does one qualify as "affected" by the sole condition of residing in, or having a business in the affected area. All the IRS statements are all the same, OR, CA, FL, TX, LA, etc
  2. The IRS is extending the filing deadline to Dec. 15, for residents in counties affected by the wildfires. Does this apply to all residents in those counties, or to only those affected by the fires. And what do they mean by "affected". Does it mean that they have had to have some loss, have made a claim with FEMA, or what? The last sentence says the IRS automatically identifies taxpayers in those areas and applies the filing relief. This makes it sound as if anyone living in those areas are eligible. From IRS "California — Victims of the California wildfires
  3. No, it is not wrong. The client never remitted the sales tax that had been collected to the state sales tax agency. So, he was audited for 3 years and they came up with the $80K.
  4. Yes, indeed. It is interesting. All the escrow items were repayment of taxes, loans, sales commission. creditors and escrow costs. No Assets. Some equipment was sold prior to escrow and the liquor license must have been a side deal, as well. The client will be able to deduct most of the taxes, except for some $30K of FTB income tax as that will be limited to $10K on Sch A and he won't be able to deduct about $20K in loans.
  5. Yes. The $85K shows up as the total in the debit column and the $85K shows up as a CR as Bal Due Escrow after the subtotal of $100K.
  6. I use enQ service which gets me through in less than 2 minutes. However, I pay them $50/m for the service which gives you 240 minutes. Unused minutes are rolled over. If you make 2 or more calls per month it is worthwhile.
  7. Client sold his convenience store business (Sch C) for $100,000. However, escrow had state sales tax lien of $80,000 and a creditor to whom $5000 was owed. Buyer paid the Sales tax and creditor through escrow in order to close escrow making a total of $185,000 paid. I take this to mean the seller (client) received the $185K as payment for the business. Any thoughts?
  8. Missing a payment will cause a default 30 days after the payment was due at which time a CP523 default notice will be issued. The notice says that the installment arrangement will be terminated if the missing payment(s) are not made within 30 days. I suggest calling the IRS number on the letter as they may be a reinstatement fee and then making these payments right away on irs.gov. The mail can be too slow. If the original payment was only late, sending the payment usually causes the default to be cancelled.
  9. Thanks for your comments.
  10. Just follow the sequence you suggest There is no way to request that the refund be applied to a different year than the following year. Frankly, if you do nothing, the IRS will take care of it, but I would want to double check.
  11. I have tried a few Efile software systems, but found them wanting, especially where 2 signatures are required. I have my clients print out the 8879 and sign it. Then they can email it back, fax it, USPS. https://www.irs.gov/e-file-providers/frequently-asked-questions-for-irs-efile-signature-authorization
  12. EIN's are valid forever. Once assigned they can't be changed to another person, or entity.
  13. You can get an inexpensive website here that comes with a portal. https://getnetset.com
  14. Correction. It was form 398, not 399.
  15. If an amended return is filed before the original is processed, the amended return will get held up as well, as there will not yet be any information from the original for the amended date to be applied to. Better to wait until the original is processed, otherwise the amended could be shunted off to electronic limbo and the changes never applied.
  16. I just want to be sure I am doing this right. Client purchased a car had bonus dep. of $25,000 which is the total for Col G, form 399. According to the instructions on form 399, the $1250 in col F is entered on IT-225 is entered code s-213 and the subtraction is $1250. The $25K is entered on IT-225 with code A-209 and there is no addition. Am I missing something here.
  17. Drake software has a worksheet that does a nice job of figuring out the W-4 allowances.
  18. In 2018 SE client made an excess contribution of $8000 to SEP-IRA. There are ways to fix this if it is an employee and return is not under audit, which it is not. Is there any way to correct this and avoid the 10% penalty?
  19. The tax and withholding tables are in Pub 15-T https://www.irs.gov/publications/p15t
  20. Thanks, Judy. "Gross Federal" I missed that. As always you provided a very detailed reply.
  21. Judy, Thank you very much for your help. You were especially helpful to go out of your way to locate the form and worksheet where the entries appear. It has been a learning experience for me, since it is the first time in 20 years of tax practice to encounter this dual feature of a sale. Thank you for your help in walking me through the procedure. It helps me to understand what I am doing. The closing statement had the full amount and the clients share was prorated accordingly.
  22. And just think, they won't have to shred the tax documents.
  23. CA client owns a rental house in N.C. The rental has a net loss of $10,000. The previous preparer had the client file a NC return. Is it necessary for a non-resident to do so if no income is derived from NC? From the NC instructions, I would think not.
  24. That's what I have. Two transactions on 4797; the 1231 Gain by itself; and a line with the sales price, 1250 Recap and the Cost basis to be filled in. Does this sound right?
  25. It was a real estate sale of the warehouse. No DIV's, no INT, nothing more than rental income. To add another twist, the initial $94K basis consisted of closely held stock inherited from the mother who had a business which included the warehouse. The mother had died many years before and the basis wasn't determined until the year after the property was sold, so it did not show up on any K-1's. It required an evaluation in 2018 by a CPA. Whether it was added to the final K-1, the client doesn't know. The client was one of 5 siblings. I hate to do this, but I am
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