Gail in Virginia

Personally, I would expense the water heater as de minimis (under $2500 or 2% of the cost of the property), depreciate the refrigerator as an appliance, with bonus depreciation or 179 available , and capitalize the flooring as a restoration. I would not have used 179 on a structural component like a roof. However i an not an expert on rental property and did not look up cites for any of this, so someone else may know more and give you a better answer.

That is correct - we are only discussing the treatment on the VA tax return.

I have always done it that way as well, Christian. The administrative code actually says. "A. Lottery prizes subject to taxation. Any lottery prize of $600 or more shall be subject to Virginia income tax. To the extent included in federal adjusted gross income, any lottery prize of less than $600 shall be subtracted from federal adjusted gross income in determining Virginia taxable income. No subtraction is allowed for the first $599 of a prize of $600 or more." The instructions for Virginia returns say "Virginia Lottery Prizes - Enter the sum of all prizes under $600 awarded to you by the Virginia Lottery Department to the extent that you included them in your federal adjusted gross income." So IMO the law says one thing but the department of taxation will most likely enforce another.

But does the tax program think that it is passive? The software that I use has a box on the K-1 that if i forget to check for active participation, the K-1 is treated as passive. It has been a long time since I used Tax Wise and I don;t remember how that worked and it might have been different then anyway.

The IRS first said yes, but just announced that if you are getting SS or Railroad Retirement, you don't need to to file anything - they will use that direct deposit information for the stimulus payments. https://home.treasury.gov/news/press-releases/sm967

And if is passed as a gift, even though it might be long term, the part of the gain that is recapture of depreciation is ordinary income. And it sounds like that will be almost all of it.

I seem to remember in some of the early information that I heard somewhere, that they would not use banking information that was used to pay taxes but only information for depositing refunds. That may have been an unreliable source, early in the game before any official information came out. Right now I am an unreliable source myself.

This is a rural area with not a lot of financial support. I don't intend to advise on what they should do,; I may in some cases direct them to websites that they can read to get up to speed themselves. I would like to know at least enough to warn them of any tax pitfalls since they do rely on me for that. Since I do the payroll for some of my clients, I will probably wind up more involved than I want to be.

There are all kinds of options during this crisis that are not normally available. I understand Tom's point, and would hope that the increased unemployment would enable most people to navigate this difficult time without going so far in debt that they will never see daylight again. On the other hand, trying to navigate what is available and how to apply for it is often EXTREMELY confusing, and the people who need the most helpful often lack the resources or education to be able to figure out what is available to them.

Thanks for the warning Catherine! I have been getting the summary email, but have not had time to really look at it to see if there was anything of interest there (I would rather spend my time on this board!) and now I won't bother.

You might try updating the program even if it doesn't appear to need an update. Just for luck.

When the itemized is close like that, I almost always wind up checking to see what forcing the itemized will do since VA only allows you to itemize for the state if you do for the federal. Sometimes it is better to pay a little more on the federal to save a whole lot on the state. But I have not had the situation that you describe show up.

I do but I use a different software so I can’t help.

I don't believe an amended return will accomplish that. You have to cancel the payment that is set up, and I believe the method for doing that is addressed in the FAQ at the site that Judy provided the link. Then you set up a new payment date on or before July 15. Personally, I would cancel the first payment date and wait until it had passed to make sure that the cancellation took before I set up a new payment date.

I only had one customer that bought bonds in the right time-frame and cashed them in for education purposes (okay, it was me for my son's college) and every time I found that it was better to use the amounts from AOTC or even tuition and fees deduction than to exclude the interest. But YMMV.

I don't think that they need to do the form showing the valuation that is required for vehicles over $500, but it would still be nice if they gave a receipt that just said he had donated cars for nothing in return. Even Goodwill gives that for bags of used clothing.

I think that self-employed people who would be eligible for paid sick leave if they were employees instead of self-employed are entitled to a refundable credit against income tax BUT i don't know how you get a refundable credit before the tax return is filed. I really haven't worried too much about this since I am more concerned about getting current taxes out the door before I have to completely close my doors.

It does raise some questions though. What happens to a couple that was MFJ in 2018, but has a restraining order now? I think they get one check made payable to both of them. The only thing I know for sure is I am not getting in the middle of that.

As it stands right now, I believe filing extensions is not out of line. Payment has been extended to July 15 for federal, and June 1 for Virginia but both have said the returns still need to be filed on time or extended. Since VA has automatic extension unless you owe I am not really sure what that means in terms of requiring return to be filed by May 1 even though taxes are net required to be paid until June 1. And if the April 15 estimate for the federal doesn't have to to be paid until July 15, but there is no change in the June 15 estimate due date, does this mean you pay estimate 2 before estimate 1? I hate changes done on the fly like this, and trying to get information that is coming out piecemeal with lots of speculation about proposed changes. And never sure if me or my staff is going to catch something and have to stay home. Argggh!

I am curious about the extra $500 per child. Is that based on children age 17 and under? Dependent child as defined for purposes of what used to be the dependent exemption, so that students under 24 qualify? Will they use the number of children claimed in 2018, even though they may have grown up and gotten off mom and dad's return by now? Or more children might have been added by now?

IF a home birth is an option for her, that is what I would do, especially now. Too many germs and sick people in hospitals!

Thanks, Catherine.

Thank you for your help, Max!

That looks like something that would have been handled at the closing since it has to be filed within 30 days of the transfer. So hopefully the attorney would have handled that. If not, it would have already been late when I got the information.

I have a client who sold a mobile home that had been lived in by various family members in New Hampshire. Client is a VA resident. I see that NH taxes interest and dividends but not wages. What about property sales? Are there any NH preparers (or NH Adjacent) who can help me out with this?