Christian

A client couple has approximately $192,000 in modified AGI for 2023. They have a rental loss of some $6,500 for last year. ATX shows none of this loss as deductible even though I checked box 8 for active participation. In doing the math $192,000 - $150,000 = $42,000. $42,000 times 50% = $21,000 of the $25,000 loss allowed if their MAGI was less than $150,000. $25,000 - $21,000 = $4,000. ATX does not show the $4,000 as an allowed deductible loss on Form 8582 with the remaining $2,500 loss carried to next year. Have I missed a toggle or what ?

I always have them mail them in so no problem there and will advise that even though the estate bank number is provided they will likely get a check.

A daughter has been appointed executor of her late father's estate and has of course set up an estate checking account. Will the Service direct deposit his refund to this account or do they send a check only ? I see no reason why they would not the return is going in with the required Form 1310 and court certifications but I like to make sure.

Ah Abby such a treasure you are.

I was thinking it was in the 2% category which was formally used on Schedule A. Well trying to help a client never hurts. Many thanks.

Ac client has come in who is a highly skilled mechanic employed by a large truck sales dealership. She receives a W-2 each year as an employee but curiously must provide the tools she works with at her own expense. Her costs in 2023 for these tools is close to $4,000. The question here is are these tool expenses deductible for her and if so where on the return. She is not self employed so I am left wondering if these expenses are in fact deductible.

For the life of me I cannot find the toggle to suppress printing zeroes in the two year comparison report. I have checked preferences and all over and cannot find it.

Resolved. Upon recreation of the efile with the corrected info the system deletes the rejected efile and you simply transmit the corrected one.

A client has provided an incorrect SSN for her newborn child which has caused a rejection by the Service Center. If memory serves I simply return to the original return and correct the number. I then recreate the efile and resend. However, do I delete the rejected efile before or after I send the replacement. I hardly ever receive an efile rejection and want to make certain I am handling this correctly without a foul up.

Well I am going ahead and figure her return allowing both credits which I had thought rightly was correct. The manner in which the regs were written are less than clear. Much better to say a child born in a specific year who qualifies as a dependent qualifies for the respective credits regardless of their birthdate in that year.

I referenced this to the PPS and they came up with this from Pub 596 "Birth or death of child. A child who was born or died in 2023 is treated as having lived with you for more than half of 2023 if your home was the child's home for more than half the time the child was alive in 2023." The child was in mom's womb for nine months of 2023 but surely was living with her. Strangely they did not come out and say the child qualifies for the EIC advising I might consider filing a paper return. I am of the opinion I can enter 12 months in my ATX software in the dependent section and proceed from there. Their thought may have been that since entering 3 months in the software it would not allow the credit my solution was to have her file on paper which meant I could show him as 12 months of residence by penciling it in.

A single mother client just had her second child on October 7, 2023. He is of course a qualifying dependent but not having lived in the home for over six months can she get the EIC for him. If memory serves she gets both the EIC and the Child Credit for him but it never hurts to make certain. She already claims HOH as she has an earlier child already.

An unmarried couple who reside in the same home now have two children. They would like to each claim one of their children and file as HOH. Since they both will be reporting the same physical address on their returns I am none to anxious to file their returns this way. I feel sure many of you are running into this issue and would appreciate what solution you came up with.

He is out of employment for some time and needs the money. I was a bit skittish about using the "Where's My Refund" function to obtain refund info on a client.

I rarely have need to check the status of a client's refund after efiling their return. However, a client has come in down on his luck and badly needing his refund. I do not bother with credit accounts for well known reasons. I told him he can predate one of his checks on his checking account for like ten days down the road and when his refund hits his bank account I would cash it. I could check "Where's Your Refund" but likely not a good idea. Does ATX have a system in place that advises practitioners when their client refund hits their account ?

Yep sure does and of course the IRS has sent a list evidently provided by Ebay of each item and what she got for it. Needless to say it will not be yours truly sorting all that out.

A client's daughter sold a bunch of items on Ebay and now has received a listing which shows over $11,000 in items sold. In my tax education this year I read that the IRS had suspended tax on these earnings for 2023 much as was done in 2022 until congress could decide a more reasonable amount for these earnings to tax. Am I correct on this and does someone possess an article on this. I recall reading it in Kiplinger's and intended on saving that issue but health issues this year served to confound my usually good work habits.

The client called the Service at the number provided and advised the Service associate he had contacted the fiduciary and requested a change. I expect no change so will continue attaching the Form 5329.

His broker's back office advised his advisor that for legal liability reasons the code could not be changed. Go figure.

This very much parallels what a client of mine got as noted in my post today. they must be upgrading the system or something.

A client who takes a uniform payout from his IRA account has for two years gotten a Form 1099-R from his fiduciary showing Code 1 in box 7 of the form. When he set up his plan I contacted the brokerage he deals with asking that the code be changed to code 2 which is the correct code for his situation. They refused so each year since he started taking his payment I have attached a Form 5329 indicating the correct code. About two weeks ago he received a notice from the Service stating he may need to file an amended return for 2022 in which they showed a copy of his Form 1099-R for that year. They had made no changes or adjustments to his return and advised he may choose not to file an amended return adding it may mean a possible penalty down the road. The notice further advised that if he wanted to effect a change to the code on his Form 1099-R he needed to contact his fiduciary and request it. He contacted his broker receiving the same negative response. I advised him to call the provided IRS response number and inform the associate that he had called them and told they could not change the code. They did advise that if he received a penalty notice they would handle it. In the meantime I will continue to include the Form 5329 with his annual filing. I find this really strange as a simple call to the broker sending my Form 1099-Rs would have changed it promptly.

Well they all mostly have come in now. With the Service delaying filling until the last week in January it has become a moot point.

I understood that I would need to submit a Form 3115 with the return. It looks a bit complicated but I'll need to do some reading for sure.

I cannot recall our state tax forms being so slow to become available but maybe I am mistaken.

Not having ever had to deal with this let me say this. An allowance for formerly unused depreciation going back fifteen or so years would be a deduction for 2023 right ? Of course, it would also reduce his basis and he would pay a resulting larger capital gain tax. And yes Danrvan a receipt with no date is essentially worthless as I have no date to assign for depreciation.