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peggysioux5

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  1. If CA LLC taxed as partnership wants to dissolve LLC, with business continuing after dissolution, is a new Federal EIN and CA payroll tax account # required? Taxpayer (owner of business) submitted dissolution paperwork to CA for LLC, but continued using existing federal EIN # and CA payroll tax account #’s. Taxpayer states he has confirmation of dissolution from CA; however, CA has notified business that business owes for several years of LLC tax (taxes for years after dissolution.) Would CA consider LLC not dissolved if business continues even if dissolution papers filed?
  2. I completed Form 1310 listing daughter of former deceased client as the person claiming refund due to deceased taxpayer as she is the trustee of revocable trust that became irrevocable upon taxpayer's death. My question is this: Taxpayer is due a refund; when setting up direct deposit of the refund, does it matter if the bank account that is listed is daughter’s or trust bank account? Being 1310 lists daughter, wanted to confirm that there would be no problem if bank account for direct deposit is a Trust bank account. Or is direct deposit not allowed due to Form 1310?
  3. I see the March 16th thread, but unable to locate the March 1st thread. Would you be able to provide the subject line of the March 1st thread?
  4. Taxpayers had large capital loss carryovers from previous years. Taxpayers began handling their own tax returns in 2019 and inadvertently dropped the previous years’ carryover losses. Are amended tax returns required for 2019 through 2021 to reflect the correct carry-over losses or can I just calculate the correct carry-over loss to date and reflect on 2022 tax return? The change in tax liability for the years in question are zero to very minimal with a decrease in tax liability to the taxpayers. Taxpayer is dealing with a serious health issue and would prefer not going back and amending previous years if possible. Peggy Sioux
  5. Taxpayer was eligible for employer health insurance in 2022 but declined coverage because Covered CA coverage was less expensive and better coverage. Employer health insurance met minimum essential coverage and was affordable; however, Covered Ca insurance agent stated taxpayer was eligible for the subsidy and set up subsidy for 2022. Taxpayer stated Covered CA agent was aware that taxpayer was offered employer health insurance. How do other tax professionals handle? Do you mark within tax software that taxpayer was not eligible for credit and therefore pay back subsidy or being insurance agent deemed taxpayer was eligible, no payback of subsidy required? 8962 instructions state: "However, employer-sponsored coverage is not considered affordable if, when you or a family member enrolled in a qualified health plan, you gave accurate information about the availability of employer coverage to the Marketplace, and the Marketplace determined that you were eligible for APTC for the individual’s coverage in the qualified health plan." Taxpayer states accurate information was provided to insurance agent. Again, how do other tax professionals handle? Peggy Sioux
  6. Another tax professional provided the following information: being the house was in an irrevocable trust at death of grantor and the step-up happened at that time (many years ago), when the first beneficiary passed away without closing out trust, there is no secondary step-up for first beneficiary's children at date of first beneficiary's passing being the home was titled to trust and asset had not been disbursed to beneficiaries. Abby, did the lawyer confirm there was a secondary step-up at beneficiary's passing?
  7. Residence was placed in trust with two beneficiaries. Trust became irrevocable at time of grantor passing. Prior to residence being sold while still in trust (many years passed from grantor passing), one beneficiary passed away leaving his 50% to his children. Would the deceased beneficiary's children receive a step-up in basis at their father's passing of residence so that when residence did sell, original living beneficiary would have a step-up in basis based on grantor's passing several years ago, but deceased beneficiary's children would have a step-up based on father's passing? If that is the case, would the sale of the residence by the trust list the residence as two separate assets - 50% for original beneficiary with lower basis and 50% for secondary beneficiaries with basis based on father's passing?
  8. I have a new client who is a partner in rental partnership who has a 754 election from 2016 due to the death of her husband and step-up in basis for rental. I have not dealt with Section 754 election in the past so have been researching the handling of the election. The research that I found shows a deduction on the partner's tax return should be reflected for the depreciation of the stepped-upped asset on page 2 of Schedule E. The previous tax preparer shows an amount on K-1 on line 13 with code "W". However, there is no coinciding entry on partner's individual tax return and the amount on line 13 of the K-1 is not included in line 2 of the K1. Could other tax preparers enlighten me as to why the K-1 entry from line 13 would not flow to the individual tax return? The 754 election mechanics does seem to be complex so I definitely could be missing something. The other issue that has me puzzled is that even though the 754 election applied to wife, the previous tax preparer split the 754 election amount of depreciation between both remaining partners (again neither of those entries flowed to individual tax returns). Shouldn't the full depreciation amount be reflected on wife's K1 rather than only 50%? PeggySioux
  9. Lifetime credit is for nonbusiness energy property. My question applies to residential energy efficient property credit which is not limited to lifetime credit of $500.
  10. IRS §25D does not state credit is limited to one time. The Taxbook shows the credit available for either the principal residence or second home. My research leads me to believe a taxpayer is able to take the credit more than once; however, I would feel more comfortable if I found something in writing stating the credit can be taken more than once. There seems to be differing views between tax preparers.
  11. Is the residential energy efficient property credit for solar a one-time credit? If a homeowner received the credit for installing solar panels on residence and later moves and installs solar panels on new residence (if credit is still available), would taxpayer be eligible to claim credit a second time?
  12. Taxpayer has investments in two different accounts with two different investment companies, and one account shows accounting method of FIFO and second account shows accounting method of HIFO. Can taxpayer use two different accounting methods in the same year to determine gain or loss as long as taxpayer can substantiate? PeggySioux
  13. Taxpayer was domiciled in CA when entered the military service. Taxpayer now lives in North Carolina due to permanent change of station orders. Taxpayer owns a home in North Carolina. She has an Alaska driver license due to previous order. Taxpayer still has CA state income tax withheld. CA states “California military servicemembers who leave California under PCS orders become nonresidents of California for income tax purposes and military income is not taxable to CA.” North Carolina states “Under the Servicemembers Civil Relief Act, if you are a legal resident of another state who is stationed in North Carolina on military orders, you will not be taxed on your military pay by North Carolina. To which state, if any, is the military income taxed? Taxpayer does not keep up home in CA while in military (joined right out of high school). Taxpayer stated at some point, she might return to CA. Taxpayer stated she purchased home in North Carolina being cost of rent is about the same as purchasing home. How would other tax preparers handle? Peggy Sioux
  14. I use Drake and have the same issue. Peggy Sioux
  15. Taxpayer received advanced payments of premium tax credit for 2021 (and has for several years). Taxpayer stated she provided all information to the Marketplace stating that she told Marketplace representative that she was eligible for health insurance through employer that met MIC when she first enrolled in Covered CA. She is not asked, nor does she provide, the cost of the employer-provided insurance to the Marketplace each year. The instructions state: If taxpayer provided accurate information about his employer’s coverage to Marketplace, and the Marketplace determined that the offer of coverage was not affordable, taxpayer is eligible for APTC. The Marketplace determined she was eligible for APTC several years ago and just renews every year without determining affordability based on cost of employer-provided coverage. So my question is this: Is she eligible for the Premium Tax Credit? Do I mark that she is ineligible for PTC being employer-provided coverage is below 9.83% of income or being the Marketplace “determined” her eligible, she is not liable for payback of the APTC? Input is very much appreciated. Peggy Sioux
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