Christian

In Virginia he would have owned 50% of their home but he gave his half to her some years back. So she actually owned the home for a time. He also had some $1000 in a joint account. My fear was that the IRS might have some obscure rule which might require the inclusion of the $17000 in their return despite his having transferred his interest to his wife years back. Although it rarely has happened I have tripped over some obscure IRS rule from time to time..

A couple for whom I have worked for many years received a cancelled debt form from a bank credit card which was issued in the husband's name only. He passed on in November last year and in discussing the cancelled debt with the administrator I was told the husband had no substantial assets as he owned basically his personal clothing, items of personal furniture, and an old Lincoln automobile. The total value of these being perhaps $2,000. The couple's home was transferred into the wife's name some three or more years ago. The couple's home was sold with her being indicated as sole owner. I am considering filing their return using Form 982 attached which will eliminate any tax due from the debt cancellation. In thinking it over it occurred to me the IRS might regard the residence as still an asset allocatable in part to him thus requiring the addition of the cancelled debt to their mfj return even though the property was given to the wife some years back. The cancelled debt is some $17,000 and as this is one of those once in a blue moon tax problems for me I would appreciate any input form any of you who are more familiar with using Form 982.

That's pretty much my read on it as well Sarah. His is a regular IRA account. I am going to advise him to contact his fiduciary and get their input. They may offer a Simple or SEP plan he can set up. Otherwse, he cannot make further contributions.

A client who is a farmer has paid into a regular IRA account over a number of years. He has now in 2015 reached the age at which he will need to start taking mrd . As he is self employed as a farmer I am thinking he may be able to continue making contributions. I do myself through a simple plan connected to my tax business. This probably is a question for his IRA fiduciary but any input would be appreciated. As a regular IRA account I think it is prohibited but checking on it can't hurt.

Thanks for all of your input. As I said earlier I will explain the situation to the son with the clear understanding that the exclusion may be denied. If so, his mother will simply have to pay some additional tax. If he is not happy with this he can take it to someone else.

The son had the family home transferred into the client's wife's name. The credit card debt was in the husband's name only. My guess is his son got legal advice from an attorney since he could see what was coming. The home was sold but all proceeds were paid to the client's wife. The date of insolvency was 9/24/2014. The husband died in November last year. The son states his father basically owned only his personal clothing when he became insolvent. Apparently the credit card company could not fall back on the wife for payment of the debt and wrote it off. Whether the Service would require the widow to add the $17,000 to their income on review I simply don't know. It's pretty clear the son had joint assets moved into his mother's name to avoid payment of the credit card debt. My guess is the return would go through routinely but if subjected to review I am not certain that the exemption would be allowed being myself not familiar with this aspect of tax law. I plan on stressing this to the son so he clearly understands what is involved. If he is not comfortable with it then I will simply add the debt to the couple's income and go from there.

I am working on a client's return who became insolvent in 2014. His son was now has Power of Attorney and is handling the client's affairs. He received a notice from a credit card company indicating some $17,000 in cancelled debt. I am attempting to complete a Form 942 for the client trying to keep the $17,000 of cancelled debt from being included in his dad's income for 2014. I have completed parts 1 and part 2 of the form but am unsure of what to put in the explanation section of the form or for that matter which of the three sections to enter what info I have. His son has no detailed accounting of his father's assets and liabilities on the date of insolvency and can only advise his dad's assets on that date were about $150 and owed over $30,000. I am wondering if I indicate this in one of the three sections in the explanation part of the form if this will suffice. I am not familiar with this form having encountered this only once before and would appreciate any input from anyone who has dealt with this particular issue before.

I agree with all of y'all's comments. Still, it is obvious to me that the Service is letting a lot of things slip through the cracks. I suppose this is to be expected in light of the tons of information they receive each year. With the advent of the ACA the info dump will only become greater and with the Republicans hopping mad over the scandals involving their support groups the Service will likely not be getting any large budget increases for quite awhile.

A couple with whom I worked with for years in my regular job came to me this year after their long time taxman passed on. I asked the wife to bring in their last year's return (2013) and their info for 2014 so I could match items. You may only imagine my astonishment when she set down and passed me a 2009 tax return ! They have not filed a return since then ! In a word they now need to file five years of unfilled returns. I asked about letters from the Service and was told she had not received one lately ! Further, she seems in no hurry to bring me info for the 2010 filling. Where is the IRS in all of this ? How is it a couple who are both gainfully employed not get a visit or some punitive action from the Service ? Have any of you experienced anything like this in your practice ? I once had a client who always owed money each year despite my efforts to change his ways. His wife showed up the next year after he died and informed me she got a letter from the Service he owed over $30,000 in tax from prior YEARS ! Along with the farm loss fiasco I wrote of earlier I am beginning to suspect that the Service is simply overwhelmed in not addressing these easily seen deficiencies.

This is the time of year I usually renew with ATX. I got the usual May discount email from them but am curious if any of you have been able to wangle any additional discount from your rep? I note a discount code block on their net renewal form but no code is provided. I've been with ATX since before there was an ATX and note they are raising their price with each passing year.

Alas no. She fired me and I suppose paid it despite my desire to send a letter and get it dropped. She came across as a nervous nelly and I was unable to get her to see reason. I originally reported it on the other income line 21 of Form 1040 thinking the Service could see she had never been an executor before.

Speaking of Form 1099-R. I have a pet peave. Many times the the taxable part of the pension is indicated but then the taxable amount not determined box is also checked. Anyone have a clue why this would be?

I once had a client who had a one time 1099-Misc caused by her service as the executor of an estate. Be darned if they did not come back on her for SE tax even though she was not regularly employed in administering estates !

Good grief Rita. And I thought I had clueless clients. Good grief ! I see I am listed as an advanced member. I am sure it must be my age.

As a factual matter I have never reported but two folks in 30+ years. This one is so egregious if he moves on I will report him. I do not usually identify myself so I really can't expect a call.

A new client came in this year having not filed his 2013 as well as 2014 return. He quit his former taxperson and I easily see why. He is twice married and divorced with two children each living with their mother. He has been receiving an EIC evidently for some time but, of course, has now run afoul of Form 8867 with no possibility of showing either child as resident with him. He will likely move on when I give him the bad news. When he does I plan on notifying the Service thinking they may flag his return but know of no fraud IRS number. Any of you have any info on this. Personally I am sick and tired of seeing my tax dollars paid out to these thieves.

Like easytax I find that fee for the discs largely a farce now when the entire program is downloadable from the internet. I'll wait to see how that one turns out. I too am and wondering where the discount is hidden.

Her father came in today and I asked him. Yes she makes maybe $300 a year baby sitting a family members child. My thought was if she made a few thousand dollars I would suggest he forego the three exemptions so she might receive the EIC. I have known him for ages and am now satisfied I have done my best for him. He and wife got refunded so all is well and I guess you might say I went the extra mile.

You are all of course quite correct. I learned she does a little baby sitting from a third party. I was not told by the grand father that she works. In fact quite the opposite. In any event gentlemen I am not a member auf die Geheime Staatspolizie for the federal government.

Leave it to CCH to send a renewal email which directs you to a renewal site which asks for a discount code which is NOT furnished !!

In my conversation with the grand mother I established the grand kids had not lived with them in years. I noted it in their file for 2014. The daughter works but it's all off the books. If there is another boyfriend I hope he is infertile.

For what its worth I dropped the EIC for the grand parents along with the child tax credit because of no residence in the grand parent's home.

I am glad you clarified the point with respect to age. I've never run into it but it's usefull info if I do and who knows maybe the grandkids will move back in at some point. I do very few EIC returns and am running into problems with folks trying to cheat.

Has anyone received their early renewal offer from ATX ? I got an email urging me to accept right away but did not see a price breakdown.

Judy, I have known the father since high school. When he asked if he could take his daughter and children as dependents I agreed he could. Daughter has no income children are on Medicaid the father(s) are missing in action. I asked him if they lived with him which he answered affirmatively. In having my hair trimmed last year I inquired how the grand kids were doing and asked concerning their living arraignments and only then found out they were NOT living with the couple. In any event it looks as if the EIC for them is gone. Both grandparents will be 65 and older this year (2015) which I read as ending their use of the credit in 2015 on the basis of age as well.