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orygun

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  1. Husband and wife bought stock while living in community property state (AZ). The shares weren't gifted or inherited but bought with community funds. A few years later they moved to non-community property state (OR). Then in 2015 wife died and in 2018 husband sold shares. I believe that the nature of property didn't change after move to OR and he received a full stepped-up basis in 2015 when wife died in 2015. Am I correct?
  2. Thanks again, Sara, for your words of wisdom. Since my previous post, I have done some inputting in my software and realize that the am't of the distribution (about $1,000) minus the $600 exemption and a few legitimate estate expenses leaves me with no taxable income on the 1041. With that being the case, can I file the 1041 and request a refund of the w/h (c. $200)? Can I file a 1310 to request the refund to go the daughter who is the Personal Representative of the estate; otherwise she can figure out how to get the money transferred from estate to her? Will there be any need for a K-1 to daughter or for her to claim the income on her return if it is all wiped out by the 1041 deductions? (I have only done 2 other 1041s in my career so am a real novice and really appreciate the help!)
  3. Sara, your reply was helpful but I have a follow-up question. On the 1041, the withholding on the IRA (which is fully taxable) will more than cover the estate tax of 15% on the income so there will be a small refund to the estate; daughter is personal rep of estate so she will have to figure how to cash it. (Her problem!) But my question now is the daughter's return. You said the estate needed to give her a K-1 showing the distribution. If the tax is paid by the estate, why is she going to be taxed again? What am I missing?
  4. I just got off the phone with the IRS. I called the Practitioner Priority Line and, surprisingly, got a fairly quick response. She tried to be helpful and I was on hold twice while she researched but the only thing she could suggest was what I had concluded from your responses: file a 1041. Of course, her only expertise was IRAs so couldn't be of any help with a 1041. I have only done a couple before but think I can muddle through! Thanks for all your input.
  5. Follow-up question. If I do an estate return as suggested, what do I use for dates? Let's assume mother died June 15, 2014 so first estate return should have covered from then up to June 1, 2015, I believe. No such return was done and as far as I know there was no income then. I'm assuming the 2014 Vanguard RMD (Abby Normal: yes, I'm sorry about the typo in original post, not RDM!] was before her death; I know it was included in 2014 final return. Can I just do an estate return for calendar year 2015 or do I need to do one for the year beginning with DOD in 2014 (with no income) and then another for the next year (beginning June 2015) if that was when RMD was received ? Supposedly daughter is working with Vanguard...but she has had almost 2 years to deal with this and hasn't!
  6. Mother dies in 2014; daughter is sole beneficiary of estate and IRA. My client, the daughter, never notified Vanguard that mother had died and that her own RDM should be issued in her name for 2015. Names of both mother and daughter were on checking account so RDM was direct deposited mid-year into daughter's bank account according to mother's request when turned 70.5. Now I am trying to do daughter's taxes and noticed that she has a 1099-R with mother's SSN and withholding sent to IRS under a deceased person's SSN. I have told her to contact Vanguard, fill out appropriate beneficiary forms, and request that they issue a corrected 1099-R in her name. Have any of you had experience with something like this? Are they apt to issue a corrected 1099-R? Or might I have to do an estate return for 2015 with the mother's income and have daughter enclose a form 1310? [There have been no estate returns done and it is almost 2 years since mother died.] If I just claim the income for daughter, credit her for the w/h and attach an explanatory statement, will she hear from the IRS since there is no w/h from Vanguard under her SSN? Thanks for any suggestions!
  7. I agree with Lion EA. I worked for HRB up until a year ago and there was very little preparers could do to change prices from what the software generated for individual returns and I often thought prices were too high for the work involved. However, there was more flexibility with others such as business returns and even amended and prior years' individual returns. So probably the preparer just put $1 into the billing program to get the return into the system as a paid return. I have even done that and charged 1¢ and it worked, resulting in what I considered a fair total price for the 2 returns!
  8. I have been working as a tax preparer for many years (as an employee) but retired in April 2015. I would like to do a few returns (probably less than 20) at home, mainly for friends and family during the upcoming season. I am an EA, have a CAF and a PIN, and have signed up for e-services. What I need is software and my home computer is a Mac. Does anyone have a suggestion for software options? I know I could buy a new computer or purchase software that emulates a Windows machine but other than that, does anyone have experience with online professional pay-per-return software?
  9. A few thoughts about the "incompetence" at HRBlock: First, a bit about me so you can see where I am coming from. I am a long-time HRB seasonal employee and have been an EA for about 10 years. There is certainly no excuse for such an error mentioned in the original post but I'd like to put it into perspective. I'm sure that many of you on this forum began your tax career at HRB and are well aware that they hire many novice preparers who make errors on what seems to be the simplest return to those of us who are experienced. However, that shouldn't give the whole company a "black eye." Also this year the company is using new software and the EIC questions are exhaustive but it is very easy to omit one and have the software disallow the credit. As serious and senior preparers, we all know that we need to check over what our software does and know what we are looking for. However, a newbie could easily overlook what should be obvious. I agree that the fees are sometimes out of line. However, I read that many of you won't even do returns with EIC because of the threat of fines if "due diligence" isn't shown by preparer. That is certainly one reason EIC returns are more expensive, given the small amount of work involved. Also, there is no such thing as an "advanced refund" at HRB as far as I know. The old RALs went out several years ago. However, clients can choose to pay $35 to have their fees deducted from their refund. That doesn't speed up things; in fact it can slow refunds up as the money needs to go from the IRS to HRB's bank and then to the client's bank or prepaid debit card. Incidentally, for a 1040EZ and state with only W-2 income, my office would charge $90 or $135 if taxpayer has EIC and no children.
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