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Patrick Michael

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About Patrick Michael

  • Rank
    Advanced Member

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  • State
    NY
  • Gender
    Male
  • Interests
    Woodworking, DIY Projects

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  1. And it gets better. Client now tells me he was told by the national brokerage firm that holds the 401K that they could avoid the penalty and repay the distribution under the CARES Act. The problem is client never had COVID, was never quarantined, and did not suffer any any financial consequences from being unable to work. He did put half of the distribution back into the 401K, using post tax funds, within 60 60 days. The brokerage firm listed the deposit as "Rollover Deposit". Any chance the repayment can be used to reduce the taxable amount of the distribution?
  2. Thanks everyone. Another case where if he had called first I would have had him take a loan instead. Client is not going to be happy!
  3. Client took a distribution from his 401K for down payment on first home. He is under 59 1/2. He received a 1099 K for the disbursement coded "1", so I'm sure it wasn't a loan. The mortgage broker told him he would not have to pay the 10% penalty but I believe that is just for distributions from IRA's and a quick google search did not say one way or another. Can anyone give me a quick sanity check?
  4. Anybody else contemplating waiting until the 13th or 14th to submit their efiles? Maybe I'm a bit paranoid or just shell shocked by everything already going on with this tax season but I can see the IRS and/or state networks getting over whelmed when all the Turbo Tax, HRB and all the other prepares hit the button on February 12th.
  5. I also believe it starts the clock for the statute of limitations in case there are issues down the road. Leave it off and the return is not complete so no running clock.
  6. I signed up for Taxaroo after a promising webinar and have run into a number of bugs (hard to read font's, customized interviews not working, issues with clients being able to sign in, video conferencing not working). They are responsive to the issues I have been having and have fixed some of them but many are still waiting to be fixed. I think this is their first year so some problems are to expected. Have you had any issues with them Lion?
  7. Finally received the docs. One paragraph states that a "Irrevocable Trust is created by this instrument" and that "during their lifetime trustee shall pay to grantors all the net income from the trust.". Next paragraph states that upon death of surviving grantor the trust will terminate and the children will receive the principal and any undistributed income. But then the next paragraph states that grantor "shall have limited power to to appoint the remainder of the trust to any other person or charitable organization...exercising such power by the surviving Grantors Last Will and Testamen
  8. I'm waiting on the actual trust documents. Trustee supplied me with this info. Forgot to mention that the lawyer who wrote up the trust told the mother that no 1041 was necessary and the mother should just include the interest on her 1040.
  9. Don't do many trust returns and had a question from a client. Client's Mom and Dad creating an irrevocable trust, naming my client as trustee. They put their home into the trust, but retained exclusive right to occupy the property and the right to all property tax exemptions, and are responsible for paying all expenses for upkeep of the property. Mom and Dad also manage any other assets placed in the trust. Mom and Dad are the beneficiaries of any income and their children get the principal and undistributed income upon Mom and Dad's death. Dad passed away in September this year
  10. Attended a tax update seminar last week and they said the new $600 stimulus payments are included in reconciliation on the 2020 return. So if a client did not receive the payment it will be included in the refund. I asked what happens if they get the $600 after they have filed and he did not have any answer. Makes sense now if payments are cut of on January 15th. And got mine in the bank account this morning!
  11. Happy Thanksgiving to everyone. I am very thankful for all the great people on this forum.
  12. It's a done deal! After some back and forth we settled on 35% for three years. Thanks to everyone and have a Happy Thanksgiving.
  13. It's mainly 1040 clients with a couple 1120's, one 1065, and one 990EZ. Her fees are comparable to what I charge and most of her clients have been with her for many years. The payment would be a % of the fees from her customers that stay with me each year. For example, if revenue from her clients was $30K the first year and $20K the next, the % would be on $30K and $20K. She is also offering to present this to her clients as a "merger" between our firms for the first year with me taking over next year, thinking that more clients would be likely to stay if she was still involved in the firs
  14. I am considering buying a book of business from a retiring tax preparer. They are asking for 40% of the gross revenue from their clients for four years. I think this is a little steep, but never having purchased a book of business before, I'm not sure if it is reasonable. There will no purchase of assets, just the client list and they will be available to help out with any questions for the first two years. Any advice would be appreciated. Thanks.
  15. Thanks Margaret. I do know most of my clients and would be sending them an email before uploading the files. I guess am a little paranoid even though in 20+ years I have never had the IRS or NY ask for the authorization.
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