Max W

@Frog I like your dialogue. Sounds like the beginning of a short story. Perhaps, "Applachian Tax Cheat"

Don't Schwab and TDA issue pages detailing the date and amount of dividends paid? This would confirm that were two divs paid.

In CA, still accepts those deductions that were eliminated on the federal return. some other states may do the same.

I gave up on organizers long ago. However, if they are a Sch C, I send them a work sheet. This works out well most of the time. I did have one client that entered their Gross Sales to include his UI ($27K) and his wife's W-2 ($50K). I questioned him o how he came up with his numbers and that's when it came out. No harm done.

The clients have to be Green Card holders for at least 5 years, so they can't apply for citizenship until then. I would not be concerned about last year's return, but would be sure to file the MFS, or MFS from here forward. The citizenship process takes a long time, averaging 15 months. If they have only been here one year, then by the time they apply , they should have the last three years showing them as married.

Apparently, from the OP there are no records. I wonder if her phone was checked, if she had one. It could have a calendar and other info. all of this is for naught as the son is reluctant to cooperate.

@Christian It doesn't matter when the child was born as long as it lived with the parent for half the time it was alive. Even if born on Dec. 31, it is considered qualified for both credits. Enter 12 months in the software and forget about a paper return. How long it was in the womb counts for nothing as far as the credits. This is just overthinking.

I both parents file electronically, the first one in wins, as the second one will be rejected. The same ITIN can't be on more than return. If the return is paper filed it would most likely generate an audit letter. The best thing to do is to file right away, so the ex's return gets rejected. Then burden of proof will be on him.

The 2020 has to be filed by May 17 of this year to claim the credit.

I've been using it for 3 years and am very satisfied with it. It also offers KBA for electronic signatures at $1.16 for each document and not each sig. This means only $1.16 for MFJ 8879 with two sigs. This offers the advantage of having both signers sign the 8879 even though they are several thousand miles apart.

The client should just file the Turbotax return. Whatever she paid will be credited to her. It doesn't matter what is on the return. I have seen this with a few self-prepared returns where the estimated payment amount on the return was incorrect.

Also, bear in mind that the preparer should advise the client of "Reasonable Compensation". Failure to do so could result in a $5000 penalty for each year involved.

20 minutes is just too long for a survey.

And the IRS just hired him to write tax regs.

A copy can be gotten at ssa.gov. You will probably have to set up an account.

CPWROS (Community Property With Right Of Survivorship) is what is required in CA for for full stepped up basis. Prior to 2001, it was Joint Tenancy WROS.

Unfortunately, there is no debt basis provided on 7203, part 2. I can't imagine that there were no payments on credit cards and a LOC. There is also a SBA EIDL loan and a item simply marked loan payable. I will be doing some more digging. Yes, there may be a lot of problems here. As I said, I will be digging for more info that I do no have in my possession as yet. To confound things even more, the client's brother died suddenly and client has gone out of town for funeral.

But I don't suppose we will get a refund for the overcharged years.

The balance sheet shows Total assets $180K, Liabilities of $330K and Equity $-150K. The Liabilities are ALL Loans.

To confound the issue even more, Part 3 of 7203, shows the loss as a carryover (Line 36 Col e)

Distibution of $20,000 (line 6 form 7203 excludes dividend distributions).

This comes from Tax Advisor, Feb 1. 2022 Computing shareholder basis Under the normal computation rules, basis is computed by taking beginning basis and adding the items of income, reducing that by nondividend distributions; by nondeductible, noncapital expenses; and, finally, by any other loss and deduction items. Basis cannot be reduced below zero by nondividend distributions; nondeductible, noncapital expenses; and any other loss and deduction items. Distributions in excess of stock basis are treated as a gain from the sale or exchange of property and reported as a capital gain. The capital gain is long-term or short-term depending upon the shareholder's holding period in the stock. Loss and deduction items in excess of basis are suspended under Sec. 1366(d)(2) until the next tax year and are carried forward to each succeeding tax year until the shareholder has basis. If a shareholder completely disposes of the stock while loss and deduction items are suspended under Sec. 1366(d)(2), the loss and deduction items are permanently lost and may not be claimed. Any loss and deduction items suspended under Sec. 1366(d)(2) cannot be used to offset the gain on the sale of the stock. https://www.thetaxadviser.com/issues/2022/feb/s-corporation-shareholder-recomputation-basis.html If you read on. It seems that this is a murky area where the IRS hasn't given sufficient guidance.

well, I don't understand it either. The old CPA's worksheet from 2020 specifically showed the loss as a carry over. I'll have to get a copy of the B/S to see what is going on.

There were no loans or any other complications. The client had a similar situation a few years ago with a different accountant and the negative basis was carried forward to the next year where it was wiped out by a large gain.

Client rec'd K-1 with a $60K, Box 1 loss. Basis at BOY was $6K. So, client is entitled to a $6K loss. In the CPA's letter she states that the $60K loss should be reported as a CG. As I understand it, the Basis loss should be CFWD to the following years and only reported as CG on dissolution of the S-corp. Shouldn't the CPA amend the K-1 and the 7203?