Max W

Client prepared his own 2018 and 2019 tax returns and took depreciation and expenses.

Now he finds out that taking the mileage expense would give him a much greater expense.

Can that return be amended?  Would he need to file a 3115?

Is there any remedy at all?

Decedents home was sold and the stepped up basis was equal to the sale price.  The closing cost produced a loss of $35,000.

What happens to this loss.?

I received my client S-corp basis worksheets from my client who has a 45% share in an S-corp that was formed last year.

Prior to 2020, it had been an LLC Partnership.

The worksheet started with "Beginning Year Stock Basis ($55,000)"  This must have been the carry over basis from the LLC.

Can this be done, or shouldn't this have been reported as a capital gain upon closing the LLC?

The only time you would need to use a worksheet with the old 1099-MISC, or the new 1099-NEC is if there was tax withheld, and you could probably work around that, too.

Just enter the amount paid on Sch C.

With only 10 days left to file the return, MFJ is a huge risk.  Everything could be lost of the IRS rejects the POA. MFS salvages something and it could be amended to MFJ if circumstances change.

On 5/5/2021 at 11:11 AM, TAXMAN said:

TP needs to file a return. Spouse went missing and a missing report was filed. Some 45 days later unable to find missing spouse.(80 years old). TP holds a GENERAL POA that does have the wording to sign "any deed, contract, court order, pleading, tax return, disability, or retirement election, or any other paper". Has a sizeable refund in it due to a carry over credit of estimated tax paid from a joint return. Would TP be better off to file a MFS return and ask for the refund? The tax year in question is a 2017 return about to die. Any ideas as time is very short.

I would be extremely wary of any general POA's, especially if it is purchased online, or from a stationery shop.   The IRS looks for certain wording and if that is not present, they will reject the return.   If it is drawn up by an attorney, it might have a better chance.   The POA has to be sent in with the tax return.

Filing MFS is a safe bet.  There is not enough time to refile if it gets rejected filing MFJ.  If hers is also filed MFS, and the IRS accepts the return, it can be amended later to MFJ, if necessary.

On 4/29/2021 at 2:38 PM, Catherine said:

There is a new PPS number that goes directly to the ACS unit people.  Just learned about it today.  800-829-7650.

That is not a new number.  It has been the collections number for non-business collections for at least 20 years.  

On 5/4/2021 at 1:55 PM, Lion EA said:

You do get a lower interest rate with an installment agreement, or maybe it has to include direct debit to get the lower rate.

You get a lower set up fee for having direct debit, not a lower interest rate.  It is always substantial difference and it keeps changing.  At one point it was $45  vs $225.  Also, if amount due over $25,000 , it has to be direct debit.

1 minute ago, jklcpa said:

I would put it on Sch E again. Unless it is more than a nominal amount of land basis to allocate, I probably wouldn't worry about that. 

I knew you weren't questioning it being taxable. That part of my reply was to grandmabee's "14-day" statement.

As someone pointed out last year, your client may lack adequate insurance coverage for people using the property as other than personal guests.

From somewhere I recall that if structures on land, such as a fence, are less than 10% of the value of the land, they can be expensed.

This property is in SF and the land for this $1 MM property is 70% of the basis.

It is the same client.  Except that last year, the income was only $1500 and it went on Sch E.

I am not questioning it as to it being taxable, but as to where to report it.  

There are a couple of small structures that were there for the tenants a gazebo and a toilet.

He does not advertise.  It started when one of the tenants wanted to use the back yard for a party and it just spread by word of mouth.

Client occasionally rents out his backyard for small groups, weddings, parties, etc.

He provides no services, nor helps in any way with activities and has no expenses involved.

The question - Is it Sch C, or Sch E.   I am inclined to just put it down as other income. 

What opine you all?

HUD has rules for making pre-payment.  If they are not followed the loan holder can refuse the payment.

The 2 main rules are; 1.) the mortgagor has to send a 30 day notice of the intention to prepay.; 2.) the pre-payment has to be made by the due date of the next payment and include any interest.

https://www.hud.gov/sites/documents/43301C5HSGH.PDF

Usually when a return gets held up it is for an identity issue, or a credit issue, such as EITC. 

This year, because of the changes made mid-stream,such as the UI exemption, those returns have to be processed by hand as the software hasn't been developed to process them electronically.

Without having any tax withheld and without any earned income, there is nothing to be claimed. No tax, no injury. The only exceptions are for PTC and community property states.

 With $27K income and a family of four he should be able to get a moratorium on his student loan payments.   With some of the statements coming out of DC, it may be that some of the student loans will be dismissed.

California, and there may be other states, does not conform to the treatment of HSA contributions and does not allow a reduction in taxable income.  Sometimes the W2 has will show the same income for federal and state, in which case an adjustment on the state side has to be made.

29 million returns that have to be processed by hand!!!  How many mistakes are going to be made by the IRS?  The system is broken.  And guess who the clients are going to blame?

21 hours ago, schirallicpa said:

Well - we found some paper work on this car.  It seems it was re-po'd.  

 

The  case of selective amnesia.  Case closed!  

I sure miss Joe Kenda. The best police detective program, ever.

I have had that happen on occasion with M/L, M/S and E Jones.  One is not aware of the problem until the page is printed, so a lot of toner gets wasted.

Thank you.

I think the way to do this is to file the return with a copy of the police report ( a report was filed, I hope)along with form 56 appointing client as fiduciary.  Check line 1 g  (Other) and refer to the missing person police report.  She can then sign a MFJ report as the fiduciary.

It would be better if she could petition the court to appoint her, but sometimes that can take a long time.  In small towns and rural areas you might be able to get it done in a short time.

I just posted under Missing EIP payments a pdf, but when it is clicked on it goes into my private files.

Webmaster please remove.

Thank you.

On 4/11/2021 at 8:37 PM, Lion EA said:

Thanx, Max. Just sent you a message.

On 4/12/2021 at 6:10 AM, Yardley CPA said:

Max...I'd appreciate it also.  Will send you a PM.  Thank you. 

 

Don't know where you sent messages, but here it is for everyone.

Due Diligence Questions 2020.pdf

Let me know if it works.  

On 4/10/2021 at 10:39 AM, Lion EA said:

Max, would you share your email attachment? Just let me know how, if you want an email from me so you just hit Reply and attach or... I still love you if you don't share!

No problem. What is your mail address?

I worked up a short question sheet re EIP's, foreign bank accts, Virtual currency and  some state issues.

It was sent as an email attachment.  I prefaced it in the email by saying that these were questions that the IRS required to be answered and would they please circle the Yes or No and to please sign and date it.  

It worked perfectly.  Now I have a written record in their file, so if they have reported the wrong EIP, there will be no argument.

There are a number of companies that provide software for tracking and calculating cryptos - Koinly, TaxBit, CoinTrack, Cryptotrader.