Max W

You can get an inexpensive website here that comes with a portal. https://getnetset.com

Correction. It was form 398, not 399.

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.

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.

Drake software has a worksheet that does a nice job of figuring out the W-4 allowances.

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?

The tax and withholding tables are in Pub 15-T https://www.irs.gov/publications/p15t

Thanks, Judy. "Gross Federal" I missed that. As always you provided a very detailed reply.

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.

And just think, they won't have to shred the tax documents.

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.

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?

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 going to ask him to get a copy of 4797 from one of his siblings.

The initial contribution was $94,000. There were no entries on the K-1's that would require an adjustment. Most years the only entry was Rent received, but that was offset by an approximately equal distribution. It looks like the distributions were rounded off, so there was a slight difference between gain and a plus distribution of a total of $600 (approx $100/yr ). The business was very simple. It was the rental of an old warehouse.

UPDATE Client was able to provide all the K-1's for all years pertaining to the S-Corp. Each years showed Gains of about $5000 and cash distributions of about the same amount. Could the final K-1S, Box 16D be taken as the basis. There were no Basis worksheets.

I get plenty of those, too. It is almost always a robocall, but sometime it is a potential new client that I wouldn't want to miss. So, instead of answering, "Hello", or "Yes", which the robot recognizes, I say, "Good morning. How can I help you". If it is a live person needing tax services, they will ask an appropriate question. If it is a robot, it will wait for 3 seconds and disconnect. Then I block that number. Of course that doesn't always work as the robocallers will switch to another number, but at least it stops the less sophisticated ones, like those asking for a donation or to answer a survey.

Yes. The Wage & Income transcripts are available for 10 years; tax return transcripts for 3; Account Transcripts technically have no limit, but for my 2848 POA's I put a 20 year range - 2004-2023. If you have to get client transcripts, you should also get a CAF (Central Authorization File) number. Fill out form 8821, or if you are an EA, or CPA, form 2848 with your information and the clients info. The CAF unit will assign you a number That way you will be able to get transcripts on line, or over the phone the same day.

Most clients do not want to get a letter from the IRS. It creates anxiety in them even before they open it. Even if you tell them ahead of time and that you will handle the matter if it arises, they will find a way to blame you as the return preparer. Also, knowing that they may not get a letter for more than a year could create long term anxiety to such a degree that the client will call you and ask if the return can be changed so as not to claim the credit.

Isn't the IRS great on patting itself on the back. "Major milestone" CA has had efiling of amended returns for at least 4 years.

The amended return may not be processed yet, but it could be logged into the system, in which case an Efiled return would be rejected. If it were to be accepted, it could cause some problem, as Tom says. In normal times, it takes 4 months for an amended return to be processed, it would probably take, at least, an additional 2 or 3 months.

No matter which way you go, your client is going to receive a AUR letter when there is no 1098-T to match the claimed credit. The LLC should be relatively easy to defend with only proof of payment. So, you should be advising your client of the options and, if the claim is rejected, it will result in penalties and interest. However, the AOC will be more difficult. You would have to get a letter from the dean's office at Yale that the Dartmouth courses were accepted as part of the Yale program leading to a degree. The IRS could also argue that the summer course was not a full time course. Dartmouth Summer offer three hours and it looks like the son, from what was paid, took 2 hours (the Dartmouth website provides the tuition by hours). Without a 1098-T from Dartmouth, the return will have to be paper filed where it is more likely to be flagged for audit.

Since this was the final K-1, would the Box 16 D constitute the basis of the sale, or is more info needed?

Client was a passive S-corp member and received a final K-1S for 2017 when the corp was sold. It was a commercial rental warehouse. The final escrow statements shows selling price $230,000. Closing costs $14, 486. The K-1 has uncaptured 1250 gain $16821; Box 9 1231 gain $211,971; Box 16D items affecting basis $258,000 1. the 1231 gain carries from the K-1 directly to from 4797 (Drake). Since this doesn't match the escrow price, should I enter the difference between that and escrow on 4797. 2. Is the $258K, box 16D, the basis? TIA

These are the penalties that can be abated- Penalties eligible for penalty relief include: Failing to file a tax return (this is the late filing penalty) Failing to pay on time Failing to deposit certain taxes as required Other penalties as applicable. I've had to do this 3 times and the best and fastest way is to call PPL and they will check the taxpayers record looking back 3 years. If there are no penalties from those years, it will normally be granted, but even a small late payment penalty could sink it. If it is denied, it can be appealed. You will get a letter of denial and where to send the appeal. The reasonable clause standard is pretty hard to meet. Unless, one of the spouses died or became incapacitated, their house burned down, or the records got swept away in tornado, there is little chance. There is a fourth standard, but it only applies to businesses and it is one of those nebulous things that could be hard to prove. BTW, you don't need to file form 4868 to get an extension - IF the client makes an Electronic estimated tax payment in time for the extension. It's right in the instructions in the 1st paragraph on the upper right. https://www.irs.gov/pub/irs-pdf/f4868.pdf

I see that you are a night owl, almost 2:30 AM EDT. Thanks for your input.