DANRVAN

Interest taxable for sure. I would check it out to be sure they are not overlooking any premiums that were not paid back as dividends.

If the SSA-1099 was under the estate EIN it would be a good idea to report the gross and deduct the nontaxable portion in order to prevent an under reporting letter.

Report any taxable amount as other income.

I believe an estate is treated as any other taxpayer under section 86(b). 86(b) does not make any reference to "individual" vs estate. Instead the code refers to any taxpayer in which the taxable portion of benefits applies. Therefore in my opinion an estate is treated the same as an individual in computing the taxable amount. I have seen it and reported as mentioned above.

Duplicate the entire file, then rename it xxxxxx 2ND QUARTER. Then make sure you delete the first quarter data in the second file and start fresh with the second Now you have a new file to work with that has not been accepted; and a record of the first that has been accepted.

The dividends are considered a tax free return of dividends; any excess is taxable. But in this case did the dividends offset all the past premiums paid? If he has been receiving taxable dividends that would be an indication.

Then he needs to ask why a distribution was reported.

Box 1 should show the total distribution = amount received. Box 2a should show the taxable amount, box 1 less basis (premiums). If

I am curious if he is a Roman Catholic Diocesan Priest. Our diocese has payroll procedures for individual parishes to follow.

I answered your question on another thread, but will give you more details from my experiences. If your client wishes your assistance in this matter you need to make it clear how you will go about doing this. Most likely you will need to send a letter on his behalf to the church explaining why they should treat him as an employee instead of an independent contractor. You will also need to inform them of the requirements to file all federal and state employment reports as well as workman's compensation coverage. You will also explain the issue with the housing allowance. In my most recent experience after going back and forth, the client told me to go ahead and fix it on Schedule C.

It depends the facts and circumstances. Is it a sporadic activity vs trade or business conducted on a regular basis? Four times a year for three years most likely will not pass the sporadic test. I don't think you will find an authoritative cite to treat it other than SE.

Your second statement contradicts the first.

Easy for you to say. I have been able to help some, but on others spent hours trying to resolve cases that have gotten nowhere.

If that is the case then you will need to report it on Schedule C and then back out housing allowance. Your client probably does not want to go the SS-8 route. But that can take a lot of time an energy for someone who is only getting paid to prepare a tax return. I have been down that road before, finally threw my hands up and fixed it on Schedule C.

You really have to give the son credit for carrying out the "will" of his mother, even though it was not in her "will". Otherwise he could have personally received a benefit as an heir to her estate. I would go with that and claim the charitable deduction up to the amount of total income received by the estate. Also consider electing accrual accounting and short first year to match deductions against income.

above post was duplicated and deleted

This is their problem not yours! If they are treating him as an employee then you should as well. I would not want the liability of making that determination for a number of reasons. They need to issue a W-2 and any state report. Since he is dual status there would not be any fica or m.c. to withhold. But that really has no bearing on how the church report his wages. Since he is dual status he reports on Schedule SE unless he has filed Form 4361. The church does not withhold for fica regardless of the 4361.

If they are not operating as an LLC they are a QJV under section 761(f)(2) If they are an LLC and if held as community property they can rely on rev. proc. 2002.69 and elect out of filing a 1065. It is basically a two prong test depending on whether they are an LLC or not: -if not an LLC go to sec. 761(f) -if an LLC go to 2002-69.

Sounds like she did not have a named beneficiary so it went to her estate. And without a charitable contribution under section 642(c) the estate will likely have taxable income. A legal question. I could not sign the 1041 and take the charitable deduction without a legal document. And not deductible by the estate as either an income distribution or a charitable deduction. Unfortunately sounds like son was acting without any sound legal advice. Most likely it could have been resolved before son made the donation from the estate funds.

I don't see how. Sec. 642(c) clearly states that the donation must be made pursuant to the terms of the governing instrument. Legal issue. Was there an attorney involved? If son was heir he could have made the donation personally after receiving funds from the estate.

Not interested, this forum works just fine.

I forgot to mention an exception that you are probably aware of; that would be if under a master plan approved by the government entity pre TCJA.

Sounds like a tax planning question, better than coming to you after the fact.

The intent of TCJA was to eliminate the federal tax subsidy of state and local development incentives. Yes you are correct. It is gross income per section 61.