Gail in Virginia

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.

In Virginia, Medicaid sends out the 1095 whatever. But every state is probably on their own as to whether they do or they don't. I'm with Jack. Check the box.

Many of the problems I see with self-prepared returns are because the taxpayer knows so little that they don't know what they don't know and therefore don't attempt to look it up.

Instead of filing a tax return, wouldn't the answer be to file a stand-alone 5329 for the kids to report the excess contributions since they never should have been made? They would have to pay the tax for making the contributions, but then no tax for pulling them out and correcting the situation. Or maybe I am looking at this wrong.

If the interest was $86,000 that means the total cashed in had to be at least $172,000, unless the bonds had not matured. But still, there would have been some principal.

According to their instruction book for the WV state income tax, non-residents do not pay tax on gambling winnings except the lottery. So I think they will only pay Federal and VA tax on their winnings.

Don't Virginia's reciprocal agreements only apply to compensation? I'm pretty sure if this were income from a Sub-S or partnership, reciprocity would not apply. I don't know about gambling income.

I don't think that the letters sent or the Sch B contributions are actually matched up to deductions taken by tax payers, although I could be wrong. But the contributor intended to contribute in 2016, and presumably mailed the check in 2016 so he deducted the check in 2016. The non-profit received the money in 2017, so they recorded the revenue in 2017. I would not worry too much about the matching issue. Although if it does turn out that somebody gets an CP2000 or equivalent asking about this contribution, I would love for you to follow up and tell us.