Edsel

An Alabama resident is showing "Excess Allowance" income of $9000. It is on page 2, line 8, where Other Income is shown. This must be new. But I would like to know what has created this "excess allowance". The only thing suspicious is an allowance of $10,833 for a parsonage allowance from a church.

Thanks. From your response it appears there will be an additional tax whether the owners are residents or not. What Illinois form is used to calculate that tax?

I have an S-corp domiciled in Alabama, filing its first Illinois return for 12/31/18. Illinois apparently has a "replacement tax". In addition to this, it is not clear whether the shareholders will have to pay personally on S-corp income allocated to Illinois. Will they? Is there an Illinois K-1 or equivalent?

I read things that may invoke all sorts of problems in your post above. I can start out by stating that a part-year Alabama return should claim only the income earned in Alabama. This also means no credit for taxes paid to Georgia.

FLP sold some timber. Partner "A" took the money for personal use. Partners B and C were not distributed any money although they have a percentage as well. Question: Did Partner A violated any rules, or can the shortage be distributed in Partners B and C in future years?

Agree with Catherine. If the employee tries to make an issue of this, nothing will happen. Even if reported to the IRS, nothing will happen. People believe the IRS will act upon some party triggering a sloppy information return mess and clean it up. Instead they will view this as some problem laid on their desk, and they won't act on the extra work this causes them. The only work they do is whatever is delegated to them.

I have a couple of Goodwill donees that never report giving anything to any other worthy causes. But yes, every year here they come with a handful of tickets, no doubt expecting me to place handsome values on their spring cleaning. Even now with the std deduction so ridiculously high they will expect some benefit from this.

More IRS stuff to make us weary. I don't see the problem if we calaulte corrrectly other than taking extra time. And time is usually something we charge the customer for.

My Take: (actually it is what I've learned from others) The test for ANY rental is whether it is a business or not. commercial or residential. Suggest if there is single ownership and the owner is not spending 250 hours per year, it should NOT qualify under QBI.

Documentation requirement is what crosses the line and makes us auditors rather than just due diligent preparers. Indeed if the IRS comes calling, they only need to ask for documentation and this serves as audit papers for the taxpayer. In all honesty, they couldn''t care less about tracking down a taxpayer - if they are in your office asking for documentation they are interested in a preparer penalty. Going across the tracks to find someone whose car is up on concrete blocks with broken glass in the street and screen windows torn is NOT why they came to your office.

Great question, but I would think since the insurance proceeds should be taxable and reported on Sch F, the income would give rise to the QBI. Other thoughts??

what is the quickest way to find out whether we are current with our PTIN status>??

To me one of the most confusing parts of the 199A. investment in a REIT qualifies. a small duplex does not. Apparently this is true even proceeds from the duplex are $20,000 and the K-1 from the REIT may show only $200. It has been suggested that the REIT reflects a business and the duplex not much of a business. Your opinion(s)?

I am returning to the group. I've missed many of you. If I have any problems with monitors I will deal with them on a private one-on-one basis. On my way to Pittsburgh for a tax seminar, I had an attack of gallstones and resulting pancreatitis. I have been in the hospital ever since. Currently at a rehab facility outside Nashville and hoping for a successful procedure on the 21st of February. No tax appointments before March 1st and I am sure I will lose some clients. I have great friends helping me out. In spite of everything, I did learn a great deal of section 199A. I hope many of you will help with this. Don't underestimate the goodness of your friends. Best regards Edsel (Ron Jordan)

Buh bye Edsel, too.

First forum of this kind where I've found this to be true. A good idea, too - keeps from needless proliferation of names. Helpful post - hope others read it. "LaVergne" may die a premature death...

Moderator note - first 5 posts here were moved from another topic that was being derailed. Rita, LaVergne is simply Edsel on a client's computer. In order to post, you have to register, and the IP address of the computer in use will not allow a duplication of another name. Apologize if you were misled, there was no attempt to "hide" my identity. I think you know I would not hide behind a tree to post, even for unpopular subjects. The client's computer is in LaVergne, Tennessee. My engagement at this client will last until January when a full-time person will take over. Thus posts from "LaVergne" will be few and not last very long.

This is not the first time Mr. Golar has deemed me to be unprofessional. The reason state taxes have such a personal appeal is because I have had two government contractors with a requirement to file in every state where they have a contract. Not only that, but one of them was an S corp, meaning I had to prepare personal returns in those states as well. Although not everyone has had the same experience, I have filed probably 25 different states (without counting), some 15 in one year for one customer alone. Additionally, Tennessee is a long and narrow state, thus we are never far away from one of our 8 contiguous states, all of whom have state taxes. I have also been accused of posting political issues (on a few occasions correctly). The issue of state taxes might be considered by some to be political if you believe higher taxes support more government services and social progress. That was not the intent of the post. but I obviously do believe a super institutional structure attaching to a taxing authority does result in a capricious and self-centered administration.

The sobering thought that comes when we hear of someone having a difficult operation is that it reminds us of our own mortality. All respondents have wished you well, and it goes without saying that I do as well. Remember that you (the patient) is more accurately diagnostic than your doctors, and don't hesitate to remind them when their assumptions are going awry. Although I'm hopeful you are receiving the best possible care, the medical system has various ways for things to fall through the cracks, and have isolated themselves from the fallout. In many ways, even though your doctors are more knowledgeable, you are your own best resource.

I've posted something like this before, and received a resounding echo of [crickets] and a few frowny emoticons. Being unpopular never seems to derail me, so I'll try again: Criteria for the below includes states where I have had experience, states with no experience but reputation from other preparers, tax rates, other non-objective stuff... WORST 5 STATES: New Jersey (administratively bad & charges $300 if you pay by check) Rhode Island (reportedly worse than "Taxachusetts", who miraculously is not on my list) California (huge superstructure and the worst rates) Illinois (business hostile and intentionally slow) Minnesota (high rates for a midwestern state and very, very aggressive. Can find you on the moon.) BEST 5 STATES: Nevada (business friendly, no personal or corporate tax) Alaska (low tax, no personal, and no superstructure taxing authority) Wyoming (no personal, and efficient) New Hampshire (no general personal or general sales tax) Montana (no sales tax, friendly to business and individuals) The low (or nonexistent) taxes in the best 5 are not by themselves the only seeming criteria. When a state cannot collect huge amounts of tax, the state cannot set up an oppressive and irresponsive or non-caring superstructure.

In addition to the ridiculously-defined circumstances presented by Black Bart, there are an abundance of cross-references to other regs, such as: a part-time exchange student from Bora-Bora who designs software [described in reg 1.2637-4(i)(6)]during the week and picks fruit on weekends is an HB-1 non-resident alien [described in reg 1.934-18(viii)(12)(a)] who also sweeps out the premises of a non-profit organization [see also reg 1.436-7(xii)(2)(j)(iii)] nights for amounts which vary according to the phases of the moon. The amount of his earnings subject to {whatever} is... They assume we can open 15 windows just to research the question, which may have been as simple as: "Are unemployment benefits taxable?"

Sounds like maybe I am not paranoid. The CT example by Sara was especially bad, since it appears this is not an error, but a deliberate action to blindside thousands of people. Like Bart's Kansas City people, Tennessee bills people all the time for fictitious taxes and penalties. Most of the time the notices don't even have an explanation. And curious enough, the amounts are nearly always under $100, meaning there is overwhelming reason for a taxpayer to simply write a check rather than to pay me to straighten out the mess. Referring to my original question: I wonder if a taxpayer simply pays them, will they be more than likely to receive another such fictitious bill? Or if they engage me to resist, will they be less likely to be bullied by the state next time around? I could conclude that Tennessee is tracking the responses, but I might be giving them too much credit.

I encounter a few states in my practice - many of us do. I've noticed an increasing trend of states to assess taxes and penalties in error. These "errors" are never in favor of the taxpayer and are extremely biased in favor of the states. So much bias that I have to wonder whether these "errors" are deliberate. I may be having a case of my legendary paranoia against taxing authorities, but my best guess is most of us have encountered these "errors" and agree that they are rarely, if ever, in favor of the taxpayer. If these are deliberate, one possible supposition is that taxpayers will just pay the assessments in fear of further interface with state government. And in fact, many taxpayers will do exactly that because Taxpayers would rather pay nominal assessments for $100 or less just to avoid having to fool with it. Some taxpayers really have something to hide and do not want any more interface with the state than possible. My specific question: If states are really involved in this practice, do they keep a record of who pays them versus who resists? In other words, "We have overcalculated the failure-to-file penalty. 36,122 residents have paid without protest, whereas 2,980 residents have refused payment..." Is this paranoia on my part? Or am I giving the state too much credit? Or could this really be happening?

Judy, there are in fact unrealized receivables and inventory, thus the 8308 will be required. What is the impact on the partner? Also, I've never understood what the IRS means by "unrealized receivables." Does this mean unbilled revenue that should have been recorded but not yet billed, or simply receivables on the books which have not yet been paid?

Termination of Service? No longer needed? Illigitimas, with me that is a one-way ticket for me to rid myself of this headache. You'll never be able to charge enough to justify saving this client from himself.