Randall

What about the Form 8962. It would seem that this could be added back to modified AGI but there is no place to input it. It seems to be similar to Fed tax exempt interest.

Client has a W2 for $19,500. Fed income tax wh $2415. Paid by 3rd party. Client provides care for person and lives in that house (under something called Texas CLASS). Payments seem to be excludable from income under the Medicaid waiver payments. IRS Notice 2014-7. It seems he should have a corrected W2 and this amount should not be in Box 1 of W2. IRS Q&As regarding this says if W2c cannot be obtained, report amount on 1040 line 7 and the negative amount on line 21 as Notice 2014-7. Anyone else encounter this before? The real kicker. Client had health insurance under mom's plan thru Sept. Then purchased health insurance thru exchange Oct-Dec. If I take out the $19,500 income, the 8962 puts him under the 100% income level and he has to pay back his advance premium. Not too bad for 2016 but it this is the same for 2017, he will get hit on the health ins credit. Would the $19,500 count as his household income even though it is excludable for tax purposes? I can't find a way to show that in the software. Any comments would be helpful.

Looks like he was comparing two levels of product.

What about part time farmers? They always have losses. I suppose they have a profit motive but I wonder if these are hobby losses too.

Got rid of my DOS machine a long time ago. Last year, the Win2000 and WinXP went. This year I'm getting a new W10 machine and the W7 goes. The Win8 will be my backup. Getting older, need to clear out the junk.

Thanks for the article. This is generally what I've been seeing too.

Temporary. 6 months.

College professor went to Rotterdam for 6 months teaching assignment. His home university paid him his salary. I'm wondering about travel expense deduction. Some things I've read indicate travel expenses deductible.

One client has received $6400 in two years in cash distributions. But his capital account showing on the K-1 has gone from $80k to $61k. So I'm wondering how this will play out. Another client had Enbridge for years, received distributions for years. These are treated as return of capital. Eventually he received all his capital back and continued to receive distributions, excess distributions, taxable LT cap gains. He did well with this one. But they are becoming prolific now and I wonder how long this will go before the fallout.

Yes and he can't blame his advisor because he is a DIY investor.

Client has Code H in Box 12 of W2. Looking at this appears to allow a deduction to AGI on line 36. But the W2 summary is showing this amount deducted as a pre-tax deduction with the reduced amount of income in Box 1. Client says he is entitled to the deduction and others at work have been doing this for years marking line 36 with 501(c)(18)(D). It appears to be a double deduction. Has anyone encountered this before? I could see the line 36 deduction if Box 1 included the amount to begin with. Could it be their HR people are coding this incorrectly? Or are they entitled to the additional deduction.

They are a pain. Last year, a client had $29,000 reported to him as cancellation of debt income. He was in the top tax bracket. A few days after I got his info, I saw an article in WSJ that this PTP had a major reorganization and had billions in restructured debt. My client's share was 29k. Cost him $14k in tax (Fed & State). He got out of it after that.

Thanks. Just wanted a look ahead. This may happen within the next few years.

Client has a like kind exchange with gain deferral. Reduced basis of received property. If client dies, do beneficiaries get that reduced basis stepped all the way up to FMV at death? Or only from the purchase price (in the exchange) to the new FMV at date of death? In other words, does the deferred gain go away?

Ok, thanks.

I put the earnings in the Line 21 worksheet. Then input qualified ed expenses up to that amount as a negative amount at the bottom of the worksheet.

I agree. I'll file the extension, and he'll meet the test 9/30. A follow up question: Instructions of 2555 say to mail the return. ATX is allowing an efile to be created. I assume we can still efile a return with Form 2555. Or do these have to be paper filed? That wouldn't seem right. Maybe the instructions are just not up to date. Have you been efiling your returns with 2555?

I was going to use the physical presence test so the 12 months would end 9/30/17. Then with a regular extension, I could get it in by 10/15/17. I was hoping to avoid the 2350. So, Margaret (or Abby), can you still use the anticipated date for the physical presence test and file now or would I have to wait until 10/1?

Thanks Margaret. Yes, I did that and the efile was created with no problems. The instructions do say you can enter an end date after 2016. But the first part of the instructions seem to indicate you need to have already passed the test (that is, as of 3/15/17 today been there a year). I too was wondering about just filing it and if accepted, ok. If he returns early, then amend the return.

Anyone done these? Client's son moved to Japan to work there. Began Oct 1, 2016. If I'm reading the instructions correctly, I can't file Form 2555 and take the exclusion until he has met the bona fide resident or physical presence test which won't be until 9/30/17. I can file return and pay tax and amend return later or file an extension. The extension will give us until Oct 15 when he will have been there for a full year. Is this correct, no way to file return now and project his time there out to Sept 30?

Client states that that they were forced to choose from several options regarding a pension plan when company was sold. Were told that the distribution was not subject to penalty and client verified with the pension custodian who issued the 1099R. So I'll go with that and go with the code 7 on the 1099R.

Client has 1099R (one each for each spouse) coded 7. But they are under 59 and half. It seems 10% penalty should apply. Should I just include on 5329 or are there reasons the penalty might not apply to them. Usually the financial institution would have this as code 1.

Yes, I just had one. I requested the client to bring in account statements showing dates and deposits so I'll have it for my records.

Or could it be treated as management fees on the 8825 and not guaranteed payment to partner? Partner would still have to pick it up on his 1040 (Sch C and SE).

Me too. I'm always concerned of going back into the program and doing something that might make a change. I use my pdf copy like the old paper copy in the file.