BHoffman

Give them each forms 8332 and tell each that you can't prepare the return until you receive it back, properly filled out and signed by the other parent. Kick the ball into their court.....

Daylight.....I see....daylight.....

This form is showing an amount on line 14 "Total withholding (equals amount on Form 592-B if calendar year)". Does my shareholder client do anything with this? I did not prepare the company tax return. The instructions for line 14 say that Form 592-B must be attached to the front of my client's form 540NR to claim the credit. Is this commonly done and should I ask the other preparer for my client's form 592-B? There wasn't one included. Thanks!

I'm about right here.....

March madness around here, like always. I'm very tired, and that makes everything seem worse than it really is. Funny thing, I feel like people are dragging their feet about giving me additional information, but then I look at when I sent the email and it was only about 3 days ago. Feels like 3 weeks.

Although I agree he is entitled to the deduction, what if they never cash the checks? After the checks are stale, does the client reverse the transaction at a later date? Having $7500 laying around in the checking account is going to make things messy down the road. Can the client contact the landowners and ask whether they received the checks and do they expect to cash them?

HSA contributions are deducted in the year paid on line 25 of form 1040. HSA distributions are reported on form 8889, from form 1099SA, on line 14a. You have to ask the client if the entire amount on 1099SA was used for qualified medical expenses. If their answer is yes, then enter the amount on line 15 of form 8889 and you're done. If not, then ask them how much was used for qualified med expenses and enter that amount on line 15. The remainder will flow to line 21 and you might need to consider the additional 20% tax. There is no annual netting of contributions and distributions. The HSA account prior year contributions can be used in subsequent years, so it's possible to have a larger distribution in one year than contributions in that same year. The HSA distribution is not reported on Sch A as medical expense.

You guys are golden!!!! One more dumb question: Drake software is giving me a note that says if form 4835 is present, the due date of the return is March 1st. Is that true? Also, there is no tax due to KS on the net KS income from Sch E and 4835 of $2062. I expected that after reading the state instructions, but wonder if anyone has anything other advice about that?

PS. The aunt is in her 80s and extremely chatty so it's hard to separate the wheat from the chaff in our conversations as she ignores my tax related questions or is foggy, but I know all about the local gossip. The nephew was a great source of explanation.

Just got off the phone with nephew. She has an unrelated tenant who grows grains and pays her with a portion of his yield which she sells immediately, hence the 1099PATR forms. She pays for some fertilizer. The tenant farmer reports on Sch F. She reports on 4835. The nephew grows nothing and does no farming, he just looks after things. Question: She spent $4900 to repair/maintain a pond on the land she rents to the cattle grazer. Is that an expense or an addition to the land basis? I think this has to be done periodically because the cattle get water there and beat up the edges of the pond.

Thank you! The nephew works the farmer as a favor to his aunt - my client - because he will inherit the farm from her. I need to find out whether he files a Sch F. The 1099PATR forms come to her, and all of the sales proceeds and farm expenses are run through one checking account that is in her name but he is also a signer. The nephew does not pay her anything, and she does not pay him for his labor. He is otherwise retired. If he doesn't file a Sch F, then she should file that form instead of form 4835? Background: Her brother used to own and run the farm and filed Sch F. His tax preparer would give my client a 4835 form as a worksheet and I used to input that. The brother died, and she inherited the farm. I think I have some questions now that will clear this up!

I have a client who lives in AZ and owns land in KS. Her nephew runs the farm, about 22 acres. The farm grows corn and soybeans.. Is this reported on form 4835? 2016 resulted in a $2,000 loss. She talks frequently on the phone to her nephew about the farm, and she keeps track of the checking account. She deposits her own money when the balance is low. Does that qualify for active participation? I'm thinking yes. She also owns a few acres in KS and rents that land to a guy who uses it to graze his cattle for a flat $5,100 per year. Do I report that on Sch E? Does she need to file a KS tax return? It appears that both the 4835 loss and the $5100 rental income are exempt on a KS return. Thanks!

Thanks!

Client inherited his mother's house on 02/25/2016 and sold it to an unrelated party on 07/15/2016 for $230k without making any improvements. Can I assume the $230k was the FMV on the date of his mother's passing since the dates are so close? The transaction was reported on 1099-S.

I'm makin' hay and counting beans. But someday........

I love good cussing.

I am mastering the art of giving clients who like to hang around and chat for an hour when they drop off their documents, and then want to gab for another hour when they come to pick up their returns....The Bum's Rush. I find that after the ask and answer tax questions, all I have to do is just stand up, smile and head for the door with my friendly hand extended as I show the way. There are only a few talkers and I'll try to accommodate when they come to pick up their stuff, but giving them the boot (nicely) means I actually get to eat lunch!

I might suggest the primary taxpayer (usually husband) listed on the 2015 return take the entire overpayment and then let him write her a check for whatever amount they agree on.

Sorry to hear that, Joan. Sending you lots of love and cyber hugs.

Yes. Gail makes particular sense in that he will identify as a businessman until his last breath, so I just did the loss carry forward election since the carry back periods were used up. Thanks!

I made a little boy CPA cry the other day. He is the brand new CFO for one of my business clients. I prepare reviewed financial statements for them. He's been awfully patronizing and arrogant. I found a major, major error and gently let him know that it needed to be corrected. Had to do with the book depreciation. He cried that it would be a lot of work. I empathized (on the outside) but felt just a little glee on the inside.

I have a 70 year old client who is in bad health. In the past, he ran his small contracting business through a Schedule C on the cash basis. He keeps good books. He had very little income in 2015 and carried back a pretty hefty loss. He told me he was still submitting bids in 2015. He had no Sch C income in 2016 and about $18,000 in expenses - mostly depreciation and fees to keep his contractor's license active. I asked whether he was still submitting bids in 2016, and he told me he tried but his health made it hard. He says he thinks he will get jobs in the future. I think not, but he has surprised me in the past. He has income from several residential rentals and he collects Soc Sec. I want to click the "Did not materially participate" box on Sch C, which will make the losses passive. I've just never done that before. The allowed losses wipe out the $5,000 net rental income, and the rest carries forward. He is depreciating a building that is on the same lot as his residence that is a bona-fide office and warehouse. I'm thinking if he sells the property and closes the business, the passive loss carry forward can be used against any gain he's likely to receive from that building or any other real estate he might sell. Could that work?

The two clients I have who are subject to the mandate tax are not getting a refund, so I'm advising an extension. The plan says the mandate will be repealed retroactively, effective 01/01/2016.

It was about a year ago today that my little Mr. Toody passed. I still miss him very much. Good advice

I've suffered enough because the fee for the 1120S was $830 when I've been charging only $375. I'm going full pop on the 1040 with a rental, Sch C, ACA subsidy repayment, Sch D, loss limitations on Sch E2. Film at eleven....