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Christian

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Everything posted by Christian

  1. A minister for whom I have worked for a time brought me her list of amounts given back to her church during the course of 2022 in tithes and other cash gifts. She asked if these were not expenses of her ministry deductible against her social security tax. These are personal expenses deductible on Schedule A and deductible if along with other Schedule A deductions exceed the standard deduction. I can find no change that alters this but if anyone knows if this is incorrect please advise.
  2. Christian

    QBI

    I referenced box 20 and sure enough here is what I found in 20Z1 " Section 199A Publicly Traded Partnership (PTP) Income". This figure exactly matches the number in box 1 as ordinary business income which would appear now to be available for the deduction. The worst that could happen I guess is it would be disallowed.
  3. Christian

    QBI

    A client has come in bringing two K-1 1065s for an oil and gas pipeline and a coal mining company. Most of the items on them fall neatly into their assigned forms on the 1040. I am not as familiar on the Qualified Business Income deduction as I would like so I have been rereading the rules. The rules state that income from a publicly traded partnership qualifies for the QBI. The amounts reported in box 1 of both K-1s as ordinary business income on which he is taxed look to me as qualifying for the deduction. He is actually paying tax on income he did not receive. On making the computations the QBI is indicated on Form 8995-A page 2, part iv, line 28 and the 20% is duly calculated and posted to line 13 on form 1040 where it is subtracted. But on reading the QBI flow chart I run into this ." Is the item income (loss) from a qualified PTP? If “Yes,” it’s not QBI, but it’s included in the REIT/PTP component of the QBI computation. Include this item as a qualified item of income, gain, deduction, or loss from a PTP". Which pretty much negates the deduction or so it appears ?
  4. Microsoft has been sending me reminders to move to Windows 11 stating that my current HP is Ok for it's use. I thought I may go ahead and upgrade now that tax season is almost over but wanted to see if anyone has upgraded and experienced any problems.
  5. When placing Interest on Treasury obligations in Box 3b it produces a line entry on the Schedule B but none of the codes in Adjustment to box 3b produce what I expect so I quit. If my client asks about it I will simply point it's federal interest which is deducted from his Virginia return.
  6. A client has come in with a U S Treasury OID from one of his banks. Time was when you could denote OID next to the entry on Schedule B by a simple override but no more. ATX shows the OID as a negative figure. All I want to do is show it as an interest entry which reads Bank of America U S Treasury OID. It's how it is entered on his prior return from his now former taxman and I like to match what folks have. Does anyone know a way to accomplish this ?
  7. I wish to express my sincere appreciation to all of you who took the time to respond to this post and particularly to Danrvan who provided what turned out to be the final piece of this puzzle. I have just finished working on this at 12:15 AM and the client will save over $2,000 in taxes as a result of my persistence but I would never have achieved this result for him without yauall's kind help to me. This is why I appreciate this forum so much as youall's far greater experience in tax matters is always so generously shared with us of lesser wisdom.
  8. jklcpa has essentially answered my question. The sale of his old rental was the complete disposition of a passive activity and the loss produced by setting his inherited house in 2022 is also passive. So I will look at form 8582 to see if this helps my client. No the property was a house rental clearly 1250 property. I checked Form 8582 and see no way I can deduct the current 2022 passive loss from his new rental from the capital gain produced by the sale of his older rental in 2022.
  9. He set up a house he inherited from his mother last year and posted a loss from that but his income prohibits taking this passive loss against regular income sources he has W-2, interest, dividends, tax exempt interest and a pension inherited from his father. Could this loss be applied to the capital gain or rather part of it realized on the sale of his older rental and if so how is that reported ?
  10. The client's property was set up in 2011 and had a porch added a few years later. Both were set up using SL/GDS and were entered on the Form 4797. ATX used the Schedule D worksheet noted above noting the accumulated depreciation on line 19 of Schedule D. Essentially it adds back all the depreciation to his income for 2022 taxing it at his regular tax rate. Let me know if this is incorrect and if so what I can do to change it. I am holding the return to go over it more carefully there is a lot of tax involved. I cannot recall how long it's been since I last had one of these and am using extra caution to insure his return is correct. Both the house and porch were set up for 27.5 years.
  11. I renew by May 31st each season although I note others have posted receiving the same discount in November I believe. I have used ATX and their prior Saber program for many years and although running into a rough patch in 2012 it works for me.
  12. I worked through the worksheet and finally see what was done. It taxes the accumulated depreciation as ordinary income and taxes any capital gain above the depreciation at 15% along with his qualifying dividends by a convoluted roundabout method Rube Goldberg must have thought up. The client has now set up an inherited house for a rental and has incurred a loss on it which cannot be deducted. Is there an IRS form showing accumulated passive losses so he will not need to retain his own ? Or does the Form 8582 carry them forward as needed ?
  13. Oh great depreciation recapture what a great concept. Boy the client is going to love this ! I've not dealt with this in more years than I can recall and , of course, he did not call me to advise he was selling the property last year. I will likely be fired for no fault of my own.
  14. A client sold a much depreciated rental last year. I expected to use the Qualified Dividends and Capital Gains worksheet for the tax. Instead because there was a gain on line 19 and lines 15 and 16 of Schedule D I had to use the above named worksheet which produced a hugely higher tax. I worked through it and to say I am totally mystified is a gross understatement. Can anyone briefly explain what the objective of this worksheet is and is my reading correct for this particular situation that is to say a large capital gain produced by the sale of a largely depreciated rental house? Is this the worksheet used to compute the tax due instead of the more familiar Qualified Dividends and Capital Gains worksheet ? Of course ATX did this automatically but I went back and checked the calculations on the worksheet. The sale is reported on the Form 4797 and the depreciation expense was entirely straight line for a 27.5 year period.
  15. That's my reading as well. The next question will arise once she reaches 25 and is still in college but that is down the road.
  16. Man you can really tell it's the end of the season. My spelling is shot along with most of the rest of me.
  17. Well the sound tax advice came from none OTHER than an ATTORNEY who is assisting in closing the estate.
  18. A client's daughter entered college after completing high school at age 18. She quit not completing her freshman year and went to work. In 2022 she turned 20 and did not attend college for the entire year and earned over $17,000 in wages. She still lives at home but I told the mother they will lose her dependent exemption for 2022. She has now returned to college this year 2023 and I assume they can pick it back up for 2023. Is this a correct reading of this ?
  19. ATX required you to attach a pdf file which I simply did not want to bother with so she mailed the return. I was just wondering if any of my fellow ATXers have efiled a return with this attachment for 2022 returns.
  20. I have to agree. He died leaving an estate which will require the listing of those assets and creates the liability of his estate to pay his debts. He placed the funds in a savings account titled in his name so guess who they will sue if the estate does not pony up. His wife the appointed executrix.
  21. A client has this form attached to her Form 1040 again this year after attaching it for the last two years. This will be the final year having to use it. We have mailed this return for the last two years and I am just wondering if the Service has cleared a return using the form 8915F for efiling ?
  22. There is a follow on to this in that he died this year she intends on filing mfj for 2023 which would perhaps create a problem as well.
  23. An individual came in who has used one of the large franchise tax preparers for a long time. Her late husband cashed out a large balance from his 401K placing the cash in a savings account. He had taxes withheld as it turns out clearly not enough. He died unexpectedly in January of this year. An attorney who is assisting his wife settle his estate (he died intestate) advised that since a large state and federal tax were due on the distribution she could file as married filing separate and since he was no longer here to pay the tax she could not be held liable for them. Her preparer at the local franchise advised that this was not correct and prepared her return as married filing jointly with her liable for the unpaid tax on her husband's distribution. I backed away from this one as frankly I do not know the answer. What do y'all think ?
  24. He evidently forgot or was unaware of the limitation on rental loss that is to say the $25,000 limit. Apparently the software used and I did not inquire which company did not evidence any warning with respect to the limit. I'll see about the transcript and probably will end up amending his return explaining he will need to pay some additional tax and preserving the overage for a later year. He has other investments which he ought to be able to subtract the loss from. Many thanks. .
  25. I did not ask. He is going to bring me the return. I made a similar error some years back but caught it myself on reviewing the return. Sorry to say ATX did not signal that anything was incorrect. Of course he has two properties and I will need to check and see if the loss is applicable to each individual unit. I do very few rental returns and the ones I do primarily show small profits each year.
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