Max W

Are you sure that two of the W-2G's weren't duplicated?

Client has a rental unit that needs lot of repairs.  He hasn' rented it 3 years.

What expenses, if any, is he able to deduct, such as mort. int., prop. tax, ins., dep.?

2 hours ago, BulldogTom said:

If the insurance company paid for the rebuild and the taxpayer did not kick anything in other than deductibles, then the basis is the same as before the fire (plus any out of pocket improvements after rebuild).

Tom
Longview, TX

Sounds good, Tom.

Thanks

Client's house burned down in a fire in 2017.   It has been rebuilt.  LY he rented out half his house.

What is the basis?  Is it original purchase basis, just before fire, after fire, or when?

The new house is slightly smaller than the one that burned, but it is essentially the same.

5 hours ago, Abby Normal said:

And you better prepare the IRS insolvency worksheet before you file because the IRS will ask for it. At least, they used to. I'm not sure if attaching the worksheet will avert a notice or not. And keep all the bank statements, etc. supporting the asset bases and liability amounts, on the day before the the debt was cancelled.

Was the 1099-C timely or several years later, like often happens.

Not insolvent.  Client has equity in 3 rental properties.  I made a mistake, he financed a business with the cards, not the rentals. He has about $350K in additional credit card debt, but only $40K cancelled this year.  Business is gone since 2017.

So with the $350K, he would be insolvent.

Maybe this is the extension my client got that I posted about recently.

I tried PPL this PM, but after 2 hour hold, hung up.  Will try again Monday.

Client rec'd $40K Credit Card COD.   

The C/card was used in purchase of rental property.  Can he avoid tax on $40K by reducing basis of propert?

2 hours ago, Lion EA said:

Wow! I have nearly a dozen I'm not going to complete by the 17th. (New tax laws added something new to almost every return, so it's taking me a bit longer preparing/proofing each return. Same number of clients, but I won't be done on time!) If it would gain me two weeks, I'd wait on hold to get a few clients extensions.

The client requested an extension, as well as the transcripts.  I don't know that the transcripts played a roll or not.

The client had already called back, before I requested him to do so, and confirmed it with a second personand he was told he had an extension until the end of the month.

33 minutes ago, ILLMAS said:

Have them call back to confirm and to get back to you.

Good Idea!  I'll also ask the client to get the persons name and ID number.

Client called the IRS to get transcripts and the IRS person also extended the filing deadline 2 weeks.

I know they can extend deadlines to file when it is related to installment agreements and the like, but for the actually filing deadline????

Anyone ever heard of this?

I speak fluent Spanish and was an translator/interpreter a long time ago.

File an amended return.  The IRS will send you a letter CP01H, with instructions.

https://www.irs.gov/individuals/understanding-your-cp01h-notice

9 minutes ago, cbslee said:

So the Partner and not your client reported all of the rental income and deducted the Mortgage Interest and the Property Taxes for 2011- 2014.

Does that mean that for 14 years no one deducted the property taxes and mortgage interest?

 

It's not clear. Client says she didn't pay and partner says client paid some??  Still trying to get this straight.  In any case if client paid anything it was to partner.

I'm going to assume, for now, that client did not pay anything.

3 hours ago, cbslee said:

So has this house remained investment property with no income for 18 years and no one deducted mortgage interest or property taxes?

Partner rented it for 4 years, 2011-14, but all that was on his returns.  He also paid mortgage int. and prop tax.

Client (C) invested with another person in a house, for investment purposes, but ......

1. Purchased 2004 under partner's (P) name  (Cost $720K) put down pmt $65K and took out mortgage in his name.

2. Right after purchase (C) paid $190K for improvements.  Partner put in $55K.

3. 2007 client added to title.

4.  2019-20 client paid for $900K remodel.

5. 2021 - sold for $2,050,000.   Proceeds allocate for client $1.3M, $750M for partner.

6. Each is filing 1040.

My question -

Does this arrangement sound equitable?

I also  think that it should have been set up as a partnership.

Thanks, Tom.  I just wanted to be sure before I give the client the bad news.

If a motorcycle is used for business, do mileage rate expenses apply?

Senator Warren should try doing her own tax returns this way and see what results she gets.

She wants the IRS to provide a government version of Turbotax without considering all the problems people have had with TT.

It is so bad that that TT has had to hire EA's and CPA's to help taxpayers prepare their returns.

Will the IRS be providig help as well with IRS employees that have had only a rudimentary course in taxes?

On 1/18/2018 at 3:17 PM, Catherine said:

Maybe you can send him to Roni Deutsch?

It would be hard to find RD in Brasil.

Four acres is a lot of land.  It's the size of about 3 football fields laid side to side.

He could rent spaces to other truckers,  or subdivide the land and sell of chcunks of it.

Can you input each 1095-A separately?

I had a client that had two 1095A's with two different insurers, each covering part of the year.

Each form was entered separately, otherwise the dates of coverage wouldnt match the policy numbers.

Usually, the IRS will only allow a late year S-corp election to go back two years.  

9 hours ago, cbslee said:

Is it an SMLLC, A 1065 OR A 1120S?

SMLLC

10 hours ago, DANRVAN said:

It appears you are referring to a single member LLC.  An LLC has no meaning for tax purposes, it is a creation of state law.  So for tax purposes it does not make any difference if the investments are held under the  client's LLC .

It can become a disadvantage in CA due to the way the annual LLC fees are calculated.  The fee is $800 up to $250,000 net income; then another $900 if it goes above that; an additional $1600 over $500K.

Is there any advantage or disadvantage to this?