Possi

Oh my gosh, thank you so much! 

I paid my donation today... and you are part of the reason I love and support this site. 

Yes, so that makes her a "special case non-resident." 

Following that, would the pension be exempt along with the wages?

20 minutes ago, DANRVAN said:

In regards to residency, they are basically treated the same.  From Oregon Pub 17 page 20,

 

And if that does not apply there is another exception:

2. You are a resident of another state according to DFAS payroll records.

 

I question that.  If she was from VA and stationed in Oregon, the VA based pension would not be an Oregon income source.

I don't know about VA, but I think the concept of state sourced income is universal. 

"The other exception under #2"; she is not a resident of another state according to DFAS payroll records. She is a resident of OR according to DFAS payroll.

Maybe VA won't tax the pension, and OR might not tax it, either. I was a little confused about VA because I was thinking of another situation. I was thinking of a FL home of record service member (living in VA) whose new wife gets a pension from ex husband, and has wages. Her wages are not taxable to VA because she hopped on the FL state with her husband, but all other income is taxable to VA.

This is different because it is actually the service member herself who received the pension. Since her home of record (which is the state according to DFAS payroll records) is OR, it will all go to OR. Wages won't be taxable, so all I need to know is whether or not the pension will be. 

Regarding VA, if a service member's Home of Record is VA, then VA would tax the pension, no matter if it came right from Heaven. VA gives no breaks. 

1 hour ago, DANRVAN said:

She would NOT be an Oregon resident if she meets the following per ORS 316.027:

"• You don’t maintain a permanent residence in Oregon for yourself or your family during any part of the year, and

• You maintain a permanent residence outside Oregon during the entire year, and

• You spend less than 31 days of the year in Oregon."

If she is a nonresident, those items are not taxable as Oregon source income unless they were attributable to:

(a) The ownership or disposition of any interest in real or tangible personal property in Oregon;

(b) A business, trade, profession or occupation carried on in Oregon.

Also as a nonresident the inherited retirement income is not taxed by Oregon.

See ORS 136.127 for details.

This isn't your typical tax client. Military are treated differently. Since her home of record is OR, her wages are not taxed to OR or to any other state where she resides. You did hit on something, though. I think her pension will be taxable to VA since she lives here, as a "non-resident" because the military curtsey only applies to wages. 

The OR practitioner line didn't know the answer, but an auditor will call me back. With your help, I think we have solved this one. Thank you!

THANKS FOR THE REMINDER! 

Hey Y'all, 

My client has OR as her military Home of Record. She lives/works in VA. Her OR wages are not taxable. 

The issue is that she inherited a "State of Oregon" pension from "Public Employees Retirement System" and I'm not sure how to handle it. 

I'm almost positive that this income IS taxable to OR and that she would file a "resident" return, exempting her military wages only. She would pay taxes on interest, dividends and capital gains income as well, if this is correct.

Can anyone confirm or correct this for me? 

I plan to call them when they open, but thought I'd ask here just in case we have someone who knows. 

donna

I believe that is for informational purposes only and not deductible anymore. But, I've been wrong before. 

1 hour ago, Abby Normal said:

They can still use Direct Pay to make a payment. They'll need to use 2020 1040 for verification since 2021 isn't processed yet.

Trust me, the IRS wants to take their money.

https://www.irs.gov/payments/direct-pay

I think these 2 just can't figure out that part. I'll send them the link. Thanks, Abby! 

I have 2 clients who have told me that when they go online to pay their taxes due, it shows a zero balance. 

A day later, one of those clients said the site updated with "processing could take 21 days" and he couldn't find a way to pay. It still shows zero balance. 

Anybody else seeing this? 

Is there any solution? 

Thanks, Y'all! 

MUAH! 

Hey Y'all! 

I'm still here, but working in an office, so I'm not online much. 

My new boss still can't efile NC. Is this correct? I'm wondering if it's software and not state issues. 

Thanks for the post. We have been waiting thinking it was software, but it's NC. I appreciate it! 

Gaaaaa..... 

I noticed it right away. So sad. Covid kept them home and BOOM. Look what happened! 

thanks~ wordy but great information. I appreciate it. 

Well, that's a loaded question. Most of my clients are families, so it would be easy for me to talk to one of their family members. 

But, what if you honestly don't know that person or their family very well? I'd say no, because it might be that family member who takes advantage. 

Thanks, y'all. The sale truly was an answer to prayer. 

Now I can sell my house and rent a nice apartment. It is the only way I can afford a salt water pool and 24/7 fitness center! LOL 

Thank you! 

I'll need to consider that. 

You always explain taxes so clearly, and send such informative links. 

I appreciate YOU. 

1 hour ago, jklcpa said:

Installment sale on 6252 that will flow to Sch D unless you elect out by reporting entire transaction on D in 2021. Interest goes on Sch B and purchaser should issue you a 1099INT each year it exceeds threshold.

The article was helpful, but almost over my head. The sale isn't contingent on income. I can take the money and run if I want. But, I want to work a few more years. 

If I stay and pull in a specified amount of gross receipts cumulatively, over 3 or four years, (as long as it takes me to reach that goal, but within 4 years) I will get a bonus payment after 4 years. As I read the article, this is not a contingency, so those rules don't apply.

I think it's in my best interest to do the 6252, and not take the whole hit on one tax return. That's what you mean by "reporting the entire transaction on D in 2021," right? I just hope LTCG rates don't go up in the next few years. 

THANK YOU, JUDY! 

24 minutes ago, cbslee said:

Yes there was thread discussing this, last month I think.

I'm looking for it now. Thanks! 

Hey Y'all!

I'm still here, but I sold my business last September.

I'll be working for the new owners for a few more years. 

The sale was a sale of stock, and they will pay me installments with interest, in case anyone was wondering how that goes. He could have purchased my client list and depreciated it himself, but instead chose to make it a stock purchase so I'd get the better tax advantage. 

I think I can simply report the stock sale on the Sch D and interest on the Sch B each year without having to do the "installment sale" form 6252. Correct me if I'm wrong. 

Not owning the business was an immediate weight off my shoulders. I'm glad I trusted God on this one. 

Donna

CONGRATULATIONS, Terry! 

Wow! That's really something! YAY

This has been hanging out there since Friday, and I don't know the answer. I would tell you to call Richmond. There isn't anything written in the books. 

If I created an official "substitute W2," I might input the state withholding assumption, but not without calling Richmond first. 

I had to hire someone, so I went to "Nextdoor" to find suggestions of PROFESSIONALS. Then, I googled and read the heck out of the reviews. I landed on a great company. It wasn't exactly cheap, but you get what you pay for, and security is always at the top of my priority list. 

Nothing much that's more comforting during tax season that knowing you have reliable IT support. Especially when you're a "Lone Ranger" in the office.