Patrick Michael

My wife "suggested" I get a hobby to get out of the house so I decided to take up golf again. I played almost every day 40 years ago, before getting married and the kids came along. First lesson is next week so I can correct my bad habits before I start up again. I agree with FDNY. I can't remember a tax season as bad as what we just went through.

Thanks

Client is working on Insolvency worksheet and asked if the debt he owes to the IRS for past years (he is on an installment plan) is considered other debt on the worksheet. I could not find anywhere in the instructions where it lists what debt can be included or is excluded from the calculation. Has anybody run into this before and know the answer? Thanks.

One of the reasons I love Drake. In the 9 years I have been with them I can't remember when I ever waited more than 5 rings before my call was answered. Only twice was the support person unable to answer my question and both times I received a call back within 24 hours with an answer.

I would expense it. Legal costs are a "ordinary and necessary" cost of rental property. The expense has nothing to do with acquiring or improving the property so no need to capitalize. No different from deducting the legal costs of evicting a tenet.

Wife sent a text to the kids that was supposed to say "Dad and I are going to Disney" but it auto corrected to "Dad and I are going to divorce". Needless to say she got a couple of frantic calls!

I have found those receiving the RRC are also seriously delayed. One filed second week of February is still pending. Simple return with no other refundable credits so that is the issue that I can think of that could be delaying it.

I was using Taxaroo at the beginning of the season and gave up on it after a couple of weeks. The video conferencing was awful. When it did connect the echo made it useless. Clients found the scheduler was difficult to use and, again after a calls to support, it would not sync with my Google calendar. I could not get the interview to customize correctly even after several calls to support. The the final straw was there was a problem with their server becoming corrupted and I could not access files clients sent to me and many clients had just disappeared from the client list. I called support everyday for four days and was told each time everything would be restored by the next day. On the fourth day I was told each preparer's clients had to be restored manually from the back up server and it could be another 10 days before they got to me. Needless to say I was done with them a switched back to Secure File Pro.

I had a similar situation where the child filed on their own, claiming themselves. I filed the 1040X for the child. It had been accepted when I checked an hour later and the next morning I filed the parents return claiming the child and it was accepted.

I purchased another practice this year, paying 35% of returning clients fees each year for three years. I estimate I got about 75% of their clients come over but expect that number to drop next year. The old preparer agreed to let clients drop off and pick up their paperwork at her home (they are about 30 minutes away from my office) but will not being so next year. I'm also planning on "firing" some of their PIA clients next year, not worth the time and stress.

Thanks Margaret. I saw that too. My question is more software related. Drake does not have a Locality named "Toljed" in their dropdown list, just "Toledo". I probably should have posted this in the Drake Forum . I forgot all about the separate forum. I'll repost there.

New client lives in NC but worked in Ohio. Their W-2 shows a Locality Name "TOLJED". I cannot find that name in the Locality list (using Drake). I do see Toledo and other cities with "JEDD" after the city name but no "Toledo JEDD" Any one in Ohio have any idea what I should use?

If the prior accountant is a CPA licensed by the state a call to the state licensing department (or threat to do same) might provide the push to provide the necessary information.

Clients daughter filed on her own and claimed herself in error (she is dependent of her parents). She had already received the $1,400 for EIP3 before the error was discovered. I have amended her return so her parents are now claiming her. Any idea's on what to do for the $1,400 for EIP 3.? Wait for the IRS to catch it? Is there anything that can be done proactively to return the money? Google search did not turn up anything. Thanks.

That's what I suspected. Thanks for the confirmation.

Never ran into this and after reading IRS pubs and searches still can not find an answer. Client had a home office but was unable to claim $2,505 in operating expenses and none of the depreciation due to profit limitations. She closed the business and sold the house in 2020. She is able to take the Sec 121 exclusion and from what I read she does not have to reduce the exclusion amount since she was never able to use the depreciation. What happens to the carryover amount? Does she loss it or can she use it in 2020? Thanks.

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?

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!

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?

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.

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.

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?

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 Testament". So it looks like this is a "intentionally defective" irrevocable trust as mentioned by Sara and the 1041 needs to be filed, with the K-1 to the mother. The 1099 INT is issued with the trusts EIN. And to add to the confusion, the trustee received a letter from the IRS yesterday looking for 1041's back to 2017, when the trust was created. So my next question for this very knowledgeable group is why is the IRS looking for returns if there was no income reported? I'm fairly confident there was no income since the only asset in the trust up to the father's death in 2020, is non-rental real estate. Thanks for all the replies and educating me on this subject.

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.

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 and the proceeds of a life insurance policy was paid to the trust. The trust received a 1099 from the insurance company for interest (over $600). From what I have read I believe this is a grantor trust. A 1041 should be filed which contains only the trust’s name, address, and tax identification number along with a statement letting the IRS know that the items of income or deductions are instead reportable by the “deemed owner.” Am I on the right track or is there something else I'm missing? As always, thanks for any and all help.