Max W

Please elaborate a little more on this. How were the use of funds lost?  Who issued the check?  Was it an insurancepayment?  Were the lost funds reported as a deduction?

If it is a recourse loan, then it is taxable; if non-recourse. not taxable.

3 hours ago, mcb39 said:

Married in October 2022; forced  to file MFJ and pay back all of ACA because income is too high.  We have tried every which way to resolve this, but instructions are sketchy.  MFJ puts them over the 400% and MFS is not allowed according to ACA.

This happened to a client of mine about 5 years ago.  They had closed out a small investment account they had and it put them about $300 over the 400% FPL. They ended up  with a $17,000 PTC penalty.    There has been no remedy for that up until this year when it goes into effect for TY's 2023-2025.

Those with incomes at 400% of the FPL and beyond will be able to obtain coverage for no more than 8.5% of their household income. 

Unless the spouse and child were included in the lawsuit, they expenses can't be deducted from the settlement, but they can still be taken on 

SCH A as long as the expenses were incurred by a licensed medical professional, and not paid by insurance.

17 hours ago, cbslee said:

After reading the instructions for Form 56, it's not clear to me which box you would check under "Section G Authority"

without waiting for the Court Appointment Documentation?   Just trying to reduce my level of confusion.

 

Line 1g.  

On 1/23/2023 at 10:53 PM, Lion EA said:

I launched into my "get an estate lawyer" speech, but they've already done that and he's filed whatever CT courts need to appoint the co-administrators and alerted them to the wait for the court to act. It sounds like the deceased did have a will plus beneficiaries listed on her retirement accounts and credit union.

I was going to ask if there is a will- and so there is.  The will should have named an executor and been notarized..    If you can find out who that is, then you can send them a form 56 which will allow the executor to signoff on a 2848.    When you have that you can then call PPL and fax them the forms along with the notarized will.   

The CT probate will have to confirm the person named in the will as executot unless there is some controversy involved.

On 1/24/2023 at 10:30 AM, cbslee said:

Yeah, the IRS has problems matching Direct Payments made in the spouse's name.

It shouldn't be a problem as long as spouse is the primary taxpayer, which it is in this case.

3 hours ago, BTS said:

Encyro.  Handles signatures and is a secure client portal.  Easy to use and not that expensive.  Pennies per signature.

Ditto!

There must be a record of the original return being e-filed.  If original was not e-file, then an amended return can not be e-filed.

8 hours ago, cbslee said:

I believe there is a backup withholding rule that applies.

Yes, 30%, I believe.

The best way to have gotten this resolved is with a Collection Due Process hearing  (CDP), form 12153.

However, there is a time limit on this of one year from a notice to levy, or a lien filing notice.  Since the penalty  assessment was in 2020, it may be too late.  (see the instruction pages of form 12153).

Thanks for the suggestions.  I got it figured out.

Goes to show, it's not what you say, it's how you say it.

2 hours ago, cbslee said:

Tom, would you tell a client that "crypto" isn't a "property of any kind"?

It's Virtual Property.  

Client has to pay tax on the mined bitcoins as ordinary income at FMV, which would be $16000 * 6.25 = $100,000

Items 2 and 4 STCG.  Item 3,  LTCG

Item 5, Other income.

Every time I try to reset the PTIN password, it says that it is not valid.

Anyone having similar problems?

On 12/19/2022 at 8:43 AM, ETax847 said:

It's definitely interesting given that he devotes 2-4 hours a day in research for his sports bets.  He is trying to make the argument it is no different than a part time job.  He keeps records detailing his bets, has a separate bank account for this activity and has a profit motive.

That's interesting as he admits his gambling acitivity is equivalent to a part time job.  A part time job doesn't cut it.  It has to be on a full time basis and be necessary for a livelyhood.

In Groetzinger, 480 U.S. 23 (1987), the Supreme Court established the professional gambler standard: "If one's gambling activity is pursued full time, in good faith, and with regularity, to the production of income for a livelihood, and is not a mere hobby, it is a trade or business.

In CA, probate takes about 9 months, or longer.  It is wise to have an inter vivos trust (also known as Revocable Living Trust, or Family Trust) as this will avoid probate.

5 hours ago, GLGACCT said:

From IRB 2012-11 

8. Retention of Records

Proposed §1.6695-2(b)(4)(ii) required that a tax return preparer must retain the records described in §1.6695-2(b)(4)(i) for the period ending three years after the later of the date the tax return or claim for refund was due or the date it was filed.

All tax returns for the LLC's should be kept by the company permanently, not by the preparer.  

You may not want to volunteer any additional information as others have mentioned.

 

§1.6695-2(b)(4)(ii) only refers to form 8867.

10 hours ago, Patrick Michael said:

Make sure to see if your state still allows employee expenses as an itemized deduction. NY decoupled from the TCJA rules and does allow the deduction.

The same goes for California.  

Before being called as a witness, you would either be deposed, or sent an interrogatory, or possibly both.  Since thery are looking for documents, the interrogatory is what is usually used.  It gives the person more time to dredge stuff up out of memory.

However, in your case you had nothing to do with the documents, are not required to keep copies of clients records and not even required to keep copies of their tax returns.  

So, get out your copy of Circular 230 and dog ear the pages pertaining to the keeping of records and returns and highlight the pertinent phrases.

This should be enough ammunition to send the attorneys looking elsewhere.

Hopefully, the anti-virus software programs will provide a means of detecting these pixels and what information they are sending.

Heirs inheriting the contract have to continue to pay income taxes on the principal and interest payments as they receive them. Once property is sold under an installment contract, that property is not eligible for a step-up in basis at the date of death.

"What you should do: In most instances, no further action is needed. Whether you filed electronically or by paper, we will contact you by mail if we need more information or if we made a change to your return. If you filed electronically and received an acknowledgement, you do not need to take any further action other than promptly responding to any requests for information. If you are due a refund, filed on paper more than six months ago, and Where’s My Refund? does not indicate we received your return, you should resubmit your tax return, electronically if possible."

This is only one of about 20 topics on this report concerning delays including 2848 processing, ID theft, forms that temporarily allow digital sigs, and more.

https://www.irs.gov/newsroom/irs-operations-during-covid-19-mission-critical-functions-continue#:~:text=As of November 4%2C 2022,to be reviewed and processed.

I just spoke to my client and he told me he had gotten another extension to Nov. 30.  ???