Gail in Virginia

If you find a really good, detailed reference material please post. I would be interested too. Like you, I don't do enough of these to feel really confident. Sometimes the problem is not knowing what you don't know so that you don't look up something you should have, however. I need to do CPE on this again soon. It has been too long.

I suggest filing a 1041 for the income, making your fee exactly equal to the amount of the income, and closing the books. Just kidding.

And I remember learning to flow chart as part of the programming process. Only part of it that I still find helpful, although I don't usually use the different shaped boxes. This thread is reminding me that I need to clean out and throw away somethings that have become useless over time -including old programming discs ( some 5.25, some 3.). I remember my first home computer had a hard drive with something measured in MB, and I thought it was huge and would never run out. Ha!

Terry, the example in Pub 17 specifically mentions a daughter who lived with and was supported by her parents the entire year, who filed jointly with her husband, cannot be claimed as a dependent by her parents. So I don't think you should check the box on the daughter that she can be claimed as a dependent on someone else's return. And i don't think that the AGI matters at all. That used to be used as part of the tiebreaker rules, but I think that as long as the child lived with a parent, the parent gets to claim the child no matter who in the household had the highest income. This is because the IRS simplified the rules several years ago and created qualifying children and qualifying relatives. Doesn't this seem simpler to you? (/s) Just remember, reality has nothing to do with how tax returns are filed and who can claim who as a dependent.

Judy, I think the couple can file MFJ if they choose to. The parents can only claim their daughter if she does NOT file a joint return unless the joint return is filed only to get a refund. I think that the filing status supersedes the exemption test, and that is the point that Pacun is trying to make.

Nothing like locking the door after the horse has been stolen. Also need to watch that these K-1s are not in their IRA account. I get two or three a year, with minuscule amounts, but they are in the IRA account so we just ignore them. If they had larger amounts, they could result in UBIT.

VA asks for DL info, but it is not required. However, if you put it on the return and make a mistake, they will kick the return out and require proof at that point.

I love that if you are considered about the legitimacy of an email you receive, you can email your state organization. Does any one see any irony here? Or maybe it's just me.....

I am just guessing here, but I bet most strippers have more nerve than I do!

Pub 970 says, and I quote" Don't report qualifying rollovers (those that meet the above criteria) anywhere on Form 1040 or 1040NR. These aren't taxable distributions. " I would think that if it is unnecessary to report a rollover, it would certainly be unnecessary to report a transfer.

Tom, if the mother had been the one hiring the child I would agree with you 100%. But the way i read the OP, the salon owner that the mother rented her booth from was the one that hired the child. Only the parent can hire the child without social security and medicare tax.

I don't think any of us like for someone to go away mad at us and feeling like we don't know how to do taxes. BUT I don't look good in an orange jumpsuit. You have to decide if you want a reputation as someone who can always get the most refund. or as someone who knows what they are doing but will only do it honestly. I think you made your choice, and it seems to me to be the one that will let you sleep well at night. There are firms in my area that I could refer that client to who would probably continue doing things the same way, or even worse. But I don't want to be one of the firms other people dump their crooks on.

Did the client issue 1099MISC for 2016 to the landowners for the rent that he paid them? It seems to me that would have encouraged them to either return the checks or cash them.

It sounds like this might be one of those facts and circuses things. She is a permanent resident of the United States, so if she lived with her daughter in the US except for temporary absences, then she was a US resident. But what constitutes temporary absences in this kind of case? I don't know. If she has permanent resident status, and lived with her daughter 330 days out of 365, which is roughly 90% of the year, I might be inclined to count her as a dependent. But where is the line? 75% of the year or more? Over 50%? I am glad I don't have to figure this out for one of my clients right now.

Happy birthday to her!

Elrod, you make me laugh out loud at work.

When he sends you that email, please let the rest of us in on this secret.

Jill, I think that most of us are looking at this as not that he is charging her rent, but that they are sharing expenses. If he had said I own the house, so you pay the electric and the cable bill as your share of the expenses, would you consider that as charging her rent? Basically, it seems to me that he is just saying you pay your part of the expenses by giving me a check, and I will write all of the checks to pay the bills since everything is in my name. But I agree with Pacun - you are closer to the situation than any of us, and if your feeling is that it is really a landlord/tenant situation then by all means report the income. But I think if I did that I would report it on line 21, and only deduct the expenses he can normally deduct on Schedule A.

Good point, Michael. If he figured the cost, and then assigned her half of the cost, there should be no profit. Therefore, there doesn't seem to be a profit motive in this case.

But married couples can "split" gifts so that if mom and dad give their child $20,000 it counts as $10,000 from each of them rather than as being over $14,000 from one of them. If they choose to make that election.

Every time i have had occasion to file a 982 for insolvency, I have done it with a return AND the IRS has later requested information in support of the insolvency (basically a balance sheet that shows more liabilities than assets.)

From IRS publication 559, p. 17: Sale of decedent's residence. If the estate is the legal owner of a decedent's residence and the personal representative sells it in the course of administration, the tax treatment of gain or loss depends on how the estate holds or uses the former residence. For example, if,as the personal representative, you intend to realize the value of the house through sale, the residence is a capital asset held for investment and gain or loss is capital gain or loss (which may be deductible). This is the case even though it was the decedent's personal residence and even if you did not rent it out. If, however, the house is not held for business or investment use (for example, if you intend to permit a beneficiary to live in the residence rent-free and then distribute it to the beneficiary to live in), and you later decide to sell the residence without first converting it to business or investment use, any gain is capital gain, but a loss is not deductible.

The problem with your solution, Pacun, is that a code G is for a direct rollover, what used to be called a trustee to trustee transfer. That is not what this was. This was a rollover, and that is what should be indicated on the return, IMHO.

So sorry to hear that Joan. This has to be especially difficult at this time of year.

That makes good sense to me, but I really doubt he will sell the property and close the business. It sounds like he will go down still trying to work, and his heirs will sell the property.