Abby Normal

505 is the nonresident individual return and yes it needs to be filed. MD should withhold tax at sale for being nonresident, but, if you file the right forms timely, you can convince MD to not withhold any taxes, since the MD property will generate a loss. I would still file the zero tax due MD return though.

Here are the pertinent forms and instructions: https://www.marylandtaxes.gov/individual/income/forms/2022_Withholding_Forms.php

Tell the taxpayer that whenever you see a 1099-NEC, you always ask about additional self-employment income that is not reported on a 1099, because most self-employed people have that. If they lie and say no, I'd recommend that they go to another preparer. And really, you should probably recommend that anyway. You don't want liars and cheaters for clients.

1 hour ago, cbslee said:

If they obtained an EIN, won't the IRS be expecting a Form 1065?

Depends on how the questions were answered. They could have just gotten an EIN for banking purposes, but yes, if they answered the questions correctly, it would default to a 1065.

Now I'm wondering if an extension was filed. Even then, the 1065 would be late, but it's an automatic penalty removal, even without first time forgiveness.

1 hour ago, cbslee said:

How would you report the W 2 wages on the 1065?

Wages

This is why I almost never support fundraising events. I'd rather just donate cash.

16 minutes ago, cbslee said:

Did they obtain an EIN?

Can you file payroll taxes without an EIN?

Ignore it and file as is. The taxes are almost exactly the same either way.

If it's not a red error, then you can efile. That's basic ATX.

48 minutes ago, cbslee said:

 

Where the heck do you keep finding these clients anyway?

 

Seems fairly typical to me, especially for clients that have long held assets.

Was there a 1031 exchange for the land purchase? If not, just increase the basis in the tax software per the settlement sheet.

Our VOIP line is with Xfinity and we added all the spam calls we were getting to a block list, and hardly get any spam calls anymore.

My cell is a Pixel and the spam blocking on that for both calls and texts is amazing, so spam calls for us are almost nonexistent.

22 hours ago, G2R said:

I've made it clear what I expect of them moving forward. They are more than willing to obliged it seems, they have just never had an accountant educate them on what is truly needed to have proper records. They want to do it right so I'm doing my best to get them on the right course. 

They're lying. Anything less than a total reconstruction from the beginning of time would be inadequate, and they won't want to pay for that.

Does the entity even have books? If not, I'd send them packing. Not worth the trouble.

On 8/11/2023 at 10:43 AM, random said:

I'm not getting any errors on putting multiple income boxes in same K-1.

In such case, how do you handle entries in other boxes? Fox example, would box 19(Distributions) would be duplicate in such two K-1s(one with box 1 income and another with box 2 income) ? 

The duplicate K1s will normally just have entries in the income boxes and all the other items can go on the main K1. Would be nice if ATX had sub-K1s so they could all be linked.

Of course, depending on the type of K1 (PTP, PTE, etc.) additional steps may be required.

15 hours ago, Sara EA said:

We use UltraTax for most tax prep, and we can enter income in all the boxes, so I don't think the IRS doesn't allow it.

It has nothing to do with the IRS, it has to do with how lazy the programmers are. These different types of income must be handled differently, which I guess is sort of an IRS requirement.

Might be better to amend all of those years, to come up with the passive loss carryovers. Since the older refunds will be lost, I probably wouldn't bother filing those. Just file the last 3 years.

Sounds good to me, if they can successfully implement this.

Treasury Secretary Janet Yellen said that by the 2025 filing season, the IRS will digitally process all the tax returns it receives, as well as half of all paper-based correspondence, non-tax forms and notice responses.

The IRS will also start to digitize more than a billion historical documents, which will give taxpayers greater access to their records, and will save the agency about $40 million in annual storage costs.

More immediately, taxpayers will have the option to go paperless with their IRS correspondence by next year’s filing season.

https://federalnewsnetwork.com/it-modernization/2023/08/irs-to-eliminate-oceans-of-paper-by-digitizing-all-new-tax-returns-by-2025/

Yay!

I've been using the same Dell 24" monitors (3 of them) for about 10 years. They work fine but I'm sure new ones would be clearer. I'll get new ones when I get a new computer this year.

Beautiful! Congrats!

I think I'd just leave the Sch E if there are operating expense carryovers or passive loss carryovers. There's no downside to leaving the E.

To track the depreciation taken in ATX, just leave the asset in fixed assets, but make it unassigned. Might need to make business use % zero.

Unreal. I always encourage epayments.

Not sure which tax you're referring to. The estate might owe some estate tax.

The parents should have been making annual gifts to all 11 heirs in the amount of the annual gift limit to both help the heirs and reduce the estate value. Parents could jointly gift 34,000 to each heir now, and to the heir's spouses or any other family members.

https://www.irs.gov/tax-professionals/practitioner-priority-service-r