Max W

The client should contact Social Security and let them know that the parent is deceased.

All payments should have stopped after the parent died and if the client received anything he may have to repay it.

We have an employee who uses form 8821 to get information from the IRS.

Recently, the IRS has insisted that ACA be included on the form before they would talk to her.

Anyone else, run into this.

We haven't yet tried with 2848.

Well, that is exactly what I did and then someone in the office questioned it and I looked at the instructions.

That is interesting that the instructions do not mention it.  

BTW, there is a neat website for doing gross ups. 

http://www.benefitmall.com/Tools-and-Resources/Payroll/Payroll-Calculators

You just have to be careful that no state info is included by using a non-tax state - TX, FL, etc

It has been several years since I have done one of these.  At that time, as I recall, the wages paid were grossed up.

However, in reading the instructions, it says to just enter the cash paid.

So if the yearly amount was $15000, that is the figure to be entered and not a gross up amount.

Also, the employer pays both halves of the SS & Med.

Am I on the right track?

TIA

If the daughter provided more than 50% of her own support, she cannot be claimed as a dependent by the mother.

The rules on expat taxes, look pretty straightforward.

http://www.irs.gov/Individuals/International-Taxpayers/Expatriation-Tax

As for smoking, I can't imagine someone being so rude and inconsiderate to light up in someone's office without asking permission.

On the few occasions that someone asks, the reply is "I would appreciate it if you would refrain while you are in here". 

I think it does qualify for Equitable Relief.  

http://www.irs.gov/Individuals/Innocent-Spouse-Tax-Relief-Eligibility-Explorer-21

Sounds easy, Right?

Consider this - unless the client has the actual stock certificates that he can transfer to mom,  the gifted stock is going to show up on his 1099B from the broker at the end of the year as a taxable transaction to the client.  

Even if the Repair/Cap rule were to be used, there is little likelihood of any item being over $500, since they are hand tools.

I'll just add one thing I don't think anyone mentioned.  If you file it before the deadline, it is NOT an Amended return, it is a Superseding Return. A tax return filed subsequent to an original return during the filing period supersedes it as the return of record. The filer must indicate that the return supersedes the original return on the return.  A return filed after the expiration of the filing period is referred to as an amended return and does not supersede the original return. A Superseding Return REPLACES the original return, and is thus treated as 'the original'.

Just so that nobody gets confused, the Superceded Return designation only applies to forms 1041, 1120, 1120-F, 1120S, 1065 and 1065-B.

S/L 5 yr depreciation is 10% the first year and 10% the last year, which means it take 6 years.

08 -$4000

09 - $8000

10 $8000

11 $8000

12 $8000

13 $4000

Total - $40,000

Elrod, thanks for your help.

The regs, use a phrase, "inventoriable costs and expenditures". Is this just an IRS lawyer's way of saying cost basis?

If that is the case, then I think I understand the basic procedure.  Once that cost figure is reached, there are two additional years to report the advance payments as a sale.

This is a new client that hasn't filed 1120 for 4 years, 2010-2013.

The 2009 copy that I received has a statement re 1-451-5 (d).

The financials and 2009 return do not indicate how the advance payments are

arrived at.  The payments in the statement are broken into 3 categories; 1. Advance pmts rec'd in taxable year, $600K.; 2. Advance pmts rec'd in prior taxable years not included in income before current taxable year $100K; 3. Advance pmts rec'd in prior years included in inccome in current taxable year $25K.

The business is luxury yacht sales.

I would assume that a spread sheet or some cumulative record of each sale would be kept 

showing when the advance payments become taxable income.

I would appreciate any input on this.

There is a limit of $2,000 per year for cost of conventions, seminars, and meetings directly related to your business and only if the cruise ship is a vessel registered in the U.S. and all of its ports of call are within the U.S. and its territories.  

This is ruled out on two counts-1. cruise ship registry - There’s only one big sea cruise ship registered in USA – ms Pride of America, and the sole reason for that is she sails in Hawaii exclusively, the whole year round.

2. The planned cruise will certainly have ports of call outside the USA. 

For the 8% exemption, the taxpayer has to apply for an exemption. That Exemption number (ECN) would then go onto form 8965.  The 13 page application asks for financial information and substantiation. The Marketplace will determine if an exemption is granted. There are no calculations for the preparer to make. 

 

    • Unaffordable Coverage Options- People who would have to pay more than 8% of their household income (MAGI) for the lowest priced Marketplace Health Insurance after subsidies qualify for this exemption. or if employer insurance is unaffordable, costing more than 9.5% after employer contributions for self-only coverage, you will likely quality for this exemption. You must apply for this exemption. Remember that your MAGI is not your taxable income; it includes the amounts you invested into non-taxable savings accounts, income from Social Security, and educational expenses.

NOTE: If your employers coverage is considered affordable (less than 9.5% of your household income), you will not qualify for an exemption from the fee yourself, but your uninsured dependents will be. The fee is 1/12 the fee per month for each family member without coverage.

I researched this issue and could not find any way to calculate the 8% on the tax return.  There is no work sheet for it. There is however, the marketplace exemption which has to be applied for. A look at the application form (https://www.healthcare.gov/fees-exemptions/exemptions-from-the-fee/) requires an extensive amount of information and documentation.

Is there something I may have missed, or has the IRS not yet provided the guidance for taking the exemption on the tax return (or perish the thought, made a mistake); or has ATX not yet provided a worksheet for it.?  Conclusion: As of today, the marketplace is the only way to get the exemption.

Here is what I am looking for. Is there a form to calculate and prove the 8% of income exemption. Looking at form 8965, section II is the place to claim this. However, how do we prove that? A separate calculation in a statement with the return and form 8965? Been looking hard and hope someone can clear the mud for me.

For the 8% exemption, the taxpayer has to apply for an exemption. That Exemption number (ECN) would then go onto form 8965.  The 13 page application asks for financial information and substantiation. The Marketplace will determine if an exemption is granted. There are no calculations for the preparer to make. 

    • Unaffordable Coverage Options- People who would have to pay more than 8% of their household income (MAGI) for the lowest priced Marketplace Health Insurance after subsidies qualify for this exemption. or if employer insurance is unaffordable, costing more than 9.5% after employer contributions for self-only coverage, you will likely quality for this exemption. You must apply for this exemption. Remember that your MAGI is not your taxable income; it includes the amounts you invested into non-taxable savings accounts, income from Social Security, and educational expenses.

NOTE: If your employers coverage is considered affordable (less than 9.5% of your household income), you will not qualify for an exemption from the fee yourself, but your uninsured dependents will be. The fee is 1/12 the fee per month for each family member without coverage.

I will point any of my clients to where they can find/do these exemptions BUT in PA, insurance requires a license and I am a "tax practitioner" not an insurance agent -- my belief is I can point but cannot "do" fro them (outside of being their fingers on a keyboard). If they hire me to do the "paperwork"; I must bill accordingly as a "secretarial" type person --- of which my secretarial fee may start at $100.00 an hour).

 

It may be callous but taxes are one thing while the insurance (or exemptions) are a totally different matter.  (FULL disclosure --- all my current clients are done and ready as far as "ACA").

I fail to see where there is any conflict with helping someone apply for an exemption and state insurance sales requirements.  Each application form has an Appendix page where the client can appoint an authorized representative, akin to a POA.  

Charging for that service seems appropriate enough,especially for the hardship and unaffordability forms.  Most clients can probably navigate the other applications without help.  BTW, for Indian Tribes, the application only has to be made once and it is good for all future years.

If there was nothing at risk, there can be no loss.

To paraphrase -"Nothing risked, nothing lost".

There has been a lot of discussion about ACA, but there is barely any mention of the exemptions, either here or in the IRS info.  In order to properly fill in form 8965, an ECN (Exemption Certified Number) is required.  To obtain this number, one of 7 different application forms -depending on category -  has to be filed with the Health Insurance Marketplace in London, KY. They say that the response takes 10 to 14 days - assuming that the application is complete.

One application form - Unable to Afford Coverage - is about seven pages and requires much of the same information as a 433A. Documentation is also required.  If a client wants to claim an exemption, this will delay preparation of the return 2 or more weeks.

Margaret, this woman is a chiseler and manipulator. You can be sure that she does this with everyone she has dealings with.

Just write her a businesslike note -

"Thank you for the $150 partial payment of the $250  invoice.  When can I expect the balance of $100?

Wishing you and your family a Merry Xmas ( or whatever)

Margaret

Either she responds and you will never hear from her again.

She will also avoid you at the book club.

Interesting!.  They call it a fee and SCOTUS  ruled it a tax to legitimize ACA..

Thanks, Joan.  That was very thoughtful of you.  It will certainly help.

Anyone in CA familiar with this company?

http://lowpriceinsurance.com/bondapp.html

The $11K and $42 K are not taxable only IF they were not taken as a deduction. I would guess that the $42 K was taken as part of the CG calculation for the sale of the house.   That return could be amended to make the 2/3 part not taxable.

The 1/3 of the $11K can go on 3903 for the year of the move , or the following year.

The $23K could get messy.  Ideally the company should send a corrected W-2,.  Otherwise the repayment would have to go on Schedule A Miscellaneous.

BTW - 22 +23 + 42 = $74K. Was something left out?

The PMI is included in the House version of the extenders bill. Now, it is up to the Senate.

See 5th bullet point  https://www.congress.gov/bill/113th-congress/senate-bill/1859