Randall

Parents claimed the AOTC for 3 years.  The 4th year, sold rental property, big gain, income too high to claim AOTC the 4th year.  Now 5th year, daughter/student had one semester in school, earned too much to be dependent of parents.  Can daughter claim the AOTC in this 5th year?  Parents were eligible to claim AOTC the 4th year but couldn't because of income being too high.  Does that 4th year count as four years of AOTC or can daughter now claim the 4th year of AOTC since it was actually only taken 3 years?

How did you find that?  I think it is 50 pages long.  I eventually found the reference to 1231.  Thanks.

13 hours ago, cbslee said:

"1231 gain is characterized as long-term capital gain and is excluded from QBI; Net Sec. 1231 loss is characterized as ordinary loss and is included in QBI; and. The character then tracks back to the trade or business that disposed of the assets (T.D. 9847).Dec 1, 2020"

Thanks.

Form 1065 with rental property.  One property was sold.  1231 gain but some was recapture.  The ATX K-1 statement input sheet has a line for Sect 1231 loss but not 1231 gain.  There is a line for ordinary gain.  Is the 1231 gain considered investment income and not business income for QBI purposes?  Would the recapture portion be considered ordinary gain and considered business income for QBI purposes?

Do they still have credits for purchase of a new electric auto?   I thought there was some limit on each make and model at the manufacturer's level.  Where can I find if a particular make and model still qualifies?

If there's an EIN, I recommend filing a final return just to close the EIN with IRS.

Doesn't the K-1 come with some additional pages and supplemental info?  My experience has been these pages and instructions walk you thru what to use as basis and where to report different numbers.

11 hours ago, KenO said:

I believe the character remains as IRA income which is non-taxable in IL. I presume the K-1 is showing this as portfolio income? If so, the K-1 preparer should have included a footnote that discloses the nature of the portfolio income. If you have a copy of the 1099-R to the trust that could be used as support if Illinois questions the deduction.

 

I did just this a couple of years ago.  Included comments on the K-1 showing the 1099R info for payer and tax ID.  I entered the amount as retirement income on the Fed 1040 and included that form showing diff between K-1 and 1040 entry.  There was no change in the Fed 1040, just showing on a different line.  But I wanted it to flow to the Ky return as retirement income.

I'm hoping this is the last season with the pandemic tax provision stuff.   Stimulus, advance credits and all that.  Maybe much smoother next year.

My case is a little different. Client received the stimulus which was included on the 2020 return.  But did not receive the rest of her refund, a refund that would have been if there were no stimulus.  That's why I'm wondering whether to file an amended 2020 return.

I have a client whose husband died in early 2020.  I had $3600 included in the 2020 return to receive both stimulus payments for both.  She later called IRS and IRS eventually sent her $3000 but said she was not eligible for the $600 for her deceased husband.  But she never got the rest of her refund ($614) which would have been her refund without stimulus money.  I'm wondering if IRS closed her 2020 account after giving her the $3000.  I'm wondering if I can file an amended 2020 refund claiming the regular refund of $614.  I'm thinking IRS would check the amended return and what they gave her and agree that she is due another $614.  Any thoughts on amending 2020 in this way?

My biggest problem with extensions is the local governments (for businesses and that includes rentals) require their separate extensions with some payment.

Thanks all.

Am I missing something?  I think the rules have changed.  I thought in the past the gain was prorated.  The ATX unput sheets for partial exclusion is excluding the whole gain.  425 days owned and lived in home out of two years (730).  Gain of $30k is all excluded.  Is it the whole gain up to the percentage of total exclusion (in my case $145k out of total $250k).

Not sure if it was Mark Twain, but the quote is:  Better to remain silent and thought a fool then to open your mouth and remove all doubt.

I selectively print worksheets.  Different for different clients.  But I don't just print everything.

Did they sign the 8879 and has the return been filed yet?  If not, I would hand them their documents and tell them to get a second opinion and have them file elsewhere.   I would take back the copies they have.

Does the energy credit still apply when MFS?  Is it cut in half for each spouse.  I saw something in the instructions about joint ownership or spouses living apart in two separate houses.  But I was wondering about one house, married couple living together, just filing MFS because of Ohio being being beneificial.

I think it is the lower of 3:  allowance, FRV and actual cost.

2 hours ago, kathyc2 said:

If your client is receiving a large credit, I assume he's older?

Yes

My client's modified AGI is over 400%.  Line 6 is blocked out.  Last year if income was over 400%, they did not qualify for the PTC.  But due to circumstances last year, they waived any payback.  This year, he is apparently eligible for the PTC.  His amounts on 1095 are the same for all months so I entered the totals.  He got credit advances each month and ATX Form 8962 is calculating he gets even more, almost as much as the premium total (counting his advance).

Instructions for 8962, What's new says for 2021 and 2022 taxpayers with hshld income that exceeds 400% of the Fed poverty line may be allowed a PTC.  So I guess that's something new they are allowing and why line 6 is blocked out.

6 minutes ago, Lion EA said:

Did he have any unemployment benefits in 2021?

No and none in 2020.

Last year, client did not qualify for PTC but received the advance.  Did not have to pay back the advance because of covid or whatever they said.  This year, similar income, appears to qualify.  Received advance and 8962 says he'll get more, much more, nearly all of the premium.  I see on 2021 Form 8962 line 6 is blocked out, reserved for future use.  2020 Form 8962 line 6 has a question if over 400%, he does not qualify.  Did I miss something, a change in this to allow more PTC?

I've not had this problem.  I had clients both ways and the rollover seems to be correct.