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About Edsel

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    ATXaholics Anonymous

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  1. Edsel

    Stimulous Coming

    ...if they ever pass it. But it will happen, or rather "something" will happen. Even though it will most likely be filled with goodies, I suspect it will be a train wreck for us having to deal with it. I keep hearing about payroll tax holiday. No rush to do this until it becomes official, but maybe someone will post a (not too lengthy) synopsis of what is in the stimulous that will affect us. Often Judy puts a sticky post containing salient features.
  2. It is very good to see some of us pausing in these terrible times to talk to each other, and advise of problems we're having. Misfortune has fallen on some of our most familiar forum members. If we live very long (as most of us have), we've been through storms of life. Some periods of time are just horribly difficult. These critical times don't happen every year, in fact just a few times in our lifetime. The tough times in my life are different than yours. Different than my next door neighbor - but he has been through the storms of life just like the rest of us. I have been through a few of these major events - and I'm not just talking inconvenient nuisances - I talking about times so bad I didn't know how to get through. They don't happen to us very often, but the kind of people we are deep inside are what pulls us through. One of my favorite bluegrass songs is "Mansion on the Hill" where a father and daughter drive to the edge of town and look high upon the hill where sits a mansion behind copper gates. They wish they could be like the residents and wish for their riches and lifestyle. But they have no idea what these wealthy people have going on in their lives - very possible those rich folks would prefer to swap lives with the father and daughter down below. For Posse and Judy, and anyone else with trying times, it is good that you take the time to advise us of what's going on. Gives many forum members the chance to show they really care. In particular Judy - some of you know that Judy and I have had a number of knock-down, drag-out disagreements. But all of you know that there is none among us more professional, more knowledgeable, or more helpful than she. And I join the rest of you in hoping for the best possible results in her corner of the world. Happy that many of you have belief in prayer - I'm not saying that I don't - but somewhat perplexed about my own effectiveness. We have some great people among us, and I'm told that the prayers of righteous people are heard.
  3. I think everyone has been clear enough, but I'll offer an example. The exemptions are multiples of $15,000 and if not exceeded, no requirement exists for the donor: Dad gives son a $50,000 gift. Exemption is $15,000, so gift tax return of $35,000 is required. The money comes off Dad's estate tax return when he passes, and unless estate is valued over $23 million, no tax would ever calculated. Son is married and Dad thinks their marriage is stable, so he gives son and daughter-in-law a $50,000 gift. Exemption is now doubled at $30,000, and gift tax return of $20,000 is required. Son is married and Dad and Mom BOTH give $25,000 to the son and $25,000 to daughter-in-law to complete their intended gift of $50,000. Exemption is now $60,000, exceeding the $50,000 in gifts. No gift tax or other disclosure is required.
  4. Can't help with NH (dunno), but it has become common for some states to withhold state tax at the point of sale of real estate. This assures that in the event the sale is even partially taxable, the seller won't be able to skip town without being forced to file a return to get most of his money back. The legislation has been floating in and out of Alabama for awhile.
  5. I haven't heard of any such thing yet, but what if the April 15th deadline was extended to July 15th? And without any penalty for failure to pay by April 15? Some of my customers are becoming afraid to meet with me (or anyone else). Extending the deadline per the above would help me much more than the train wreck associated with removing payroll taxes. Not to mention much, much cheaper.
  6. Thanks for the responses. Good link, Max.
  7. Does an involuntary conversion include pressure from creditors to release equity in a home? i.e. Financial Distress? Home was a former residence converted to a rental home. Home was sold by owners and not repossessed by creditors. The proceeds only partially satisfied the remaining creditors.
  8. Thank you JRS. The first thing I've seen which specifically disallows it.
  9. Are there any circumstances where solar energy credit can be refundable? My research: Never found where it could be, or where it couldn't be. Since deductions and credits are by grace of the tax law, I would say "no."
  10. Thank you Gail. I admire your intelligence and willingness to help.
  11. Long ago, parents set up a Coverdell for their daughter. In 2019, withdrawals from the Coverdell totalled $9000. The funds were issued in the name of the daughter and were used exclusively for tuition. Daughter also worked part-time as a sound engineer in a Nashville recording studio, and made $6000. Question: Can the $9000 be considered as "support" for the daughter when considering whether the daughter can claim herself as a dependent? If so, her "support" would be $15,000 for this purpose, even though only $6000 is taxable. There are other factors which affect whether the daughter can claim herself, but I believe the question above can have a "yes" or "no" answer. Appreciate responses.
  12. Thanks to all of you for your response. Client has a stack of transmittals directly to the charity. I will communicate the results of our discussion with the client.
  13. As fewer people are itemizing, those who are old enough for RMDs are increasingly directing retirement distributions to be sent to charities. The effect is to reduce taxable income, and to correspondingly invalidate charitable deductions (which most of them can't use anyway). I have a few of these clients. I have seen 1099-Rs showing gross distributions with zero as taxable amounts. This year one of them is showing the amount contributed as gross distribution and taxable as well. And the "taxable amount not determined" is checked. My client went back to his stockbroker to question this. He was told the 1099-R was correct as issued, and he would not correct it. He was also told that the "very finest tax people" are insisting this was the proper issuance of a 1099-R under the circumstances, which are known. I believe this will result in my client ultimately being taxed on the higher amount, and will find relief upon meticulous presentation of records. Before entertaining the presentation of records, the IRS will first send him back to the issuer to get the 1099-R corrected. What say ye?
  14. Edsel

    QBI and Payroll

    Of course I don't have the time to display all the characteristics of my customer, and my prior conversations with him about payroll, attempts at same, and 1099s - in some years issued more because the IRS will accept a 1099 to an owner to satisfy their requirements for a "fair compensation" for S corps. Basically the straw that broke the camel's back (the chief reason among others) is the fact that a 4th quarter payroll implies that he was paid the amount during the fourth quarter. That is clearly a misstatement of facts (in Tennessee behind-the-barn language, a lie). Recharacterization of income or expenses is one thing - a blatant untruth is something different. This crosses the ethical and moral line.
  15. Edsel

    QBI and Payroll

    If it makes any difference at this point, the quasi-"payroll" would replace a 1099-MISC issued to him in January for $128,000. And yes he has paid himself at least this much, including all distributions. No, they were not all made in December. I hope I would give myself credit enough to not backdate a check into December.
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