Tracy Lee

New client received a Form 3922 Transfer of Stock acquired through an employee stock purchase plan. I have never seen one of these. I have read the instructions for it but am still confused. It would seem that this is informational only and not taxable at this time; until he actually withdraws money? Is this a correct assumption?

New TP was told by a friend that he donates his rental to charities and is able to expense that out as a charitable contribution and get a 'HUGE' tax break. My research shows that he can only claim the contribution, on his Schedule A, if he claims the FMV of the rental as income. Where might I find the facts on this? Is there a PUB that spells this out so I can show him in black and white how this works? I have never had this situation before.

I was reading through the QBI rules again because I have so many that get this credit. I had missed the part where realtors and property managers are not eligible. WOW that is going to hurt? I was wondering about clients who have Sch E rental property? I thought I read the first year QBI was allowed but after that they were no longer allowed the QBI deduction either, but now going through the instructions it looks like clients with rental property CAN take the QBI credit? I am only talking about the passive income types, not Sch C. What do you all do?

I feel the same as Bulldog, but I do not take any new clients that are behind in tax returns until after April 15th, they have to go on extension. If they are not willing to do that then they are not the client for me. I feel like the clients that keep up on their returns in a timely manner deserve to be taken care during the regular tax season. For the most part that has worked out well for me, however there is ALWAYS exceptions.

Client should be. They are the one tracking the invoices. I have been working in QB (desktop) since 2006. I also use QB payments to pay vendors, but I have always had to issue the 1099 NEC. I don't believe there is a way for QB to track every invoice for the year that has been paid, unlike Venmo or Paypal. However, with that said QB Online works very differently and I won't have anything to do with it. It allows income and expenses to be overstated all the time, but with that said they might issue the 1099s because QB Online takes more control of the books.

Excellent! I found that box! thank you!

T.P. received a 1099R for gross and taxable amount of $10,731.32 RMD that he had transferred directly to church for his contribution; he provided the proof so I know it is correct. I know I can deduct that amount on his 1040 and put QCD as qualified charitable distribution to offset it. I have conflicting information. One website says I can offset 100% straight on the 1040 line 15b (huh?) tax book says I have to deduct it off his Sch A on his gifts to charity at 100% there. Which is it?

TP sold home he bought 11-2021 specifically for girlfriends son to enable to have a home of his own for $325,000.00 (nice guy!) Then sold it to him 5-2023 for $376,000.00 and gifted him $45,120.00 in equity to help with the 20% down (the son had saved the rest of the down payment). After proceeds, cost, improvements and sellers fees.... he has a gain of $44,886.00 even though he never actually got any money from the buyer other than the amount he purchased it for. He wants to be able to add the $45,120.00 to his sellers expenses, which I know he can't but sadly he is going to owe IRS $12,000+ and Oregon $5000. + in taxes because it made most of his social security income taxable. This is a phone call I am dreading! He does not see this coming! He should have consulted me (or another CPA) before he sold, perhaps we could have advised him to sell the house at a loss to offset the gain of the gift. Any advise or thoughts or even a work around on this gain I am unaware of?

I was puzzled by this also. I use ATX Max. There was no other passive income to offset. After research and talking to my CPA friend I decided to leave the Sch E in place with no income and let it carry forward until they sell it. Then they can take the loss.

TP bought rental property in 2022 and took a $20,000.00 loss on it because of the amount of repairs....however they could not take their loss because their AGI was so high they phased out. They were frustrated by that and stopped renting it, effective early 2023 after they got there tax return back. They have no rental income for 2023 because they let a single mom struggling live there for free for a couple months. It is standing empty right now with plans to sell it. When I converted it to personal use in fixed assets it brought forward the entire loss and offset their income. This is great for them , but what do I do when they come back to me next year and tell me they sold it in 2024? The Schedule E and the fixed asset list will not roll forward. Does this just become a regular sale of asset and I use the original basis of the house , minus the depreciation they took and put it on Form 8949? I'm leaning towards leaving the Sch E there, taking out the 2023 depreciation and letting it show as 0 so it will carry forward. What do you suggest? I'm afraid they are going to come back next year and change their mind and turn it back into a rental.

I also read those rules, so am I correct in my understanding that 'that ship has sailed' and he can NOT fund his Simple IRA at this point?

TP owns 100% S Corp. He is his only employee. He opened a Simple IRA but did not fund it through payroll, now he owes a chunk of money to IRS and wants to fund that Simple IRA. I have no experience with Simple IRAs, but it would appear in my research, that he does not have that option at this point to fund it through the 1040, it had to go through payroll and show on his W2. I put $5000.00 on Line 16 Sch 1 under Simple401K contribution but nothing flows through to the 1040, which is understandable because he is not considered self employed. Is there any other way to contribute to a Simple IRA to reduce his tax liability on his 1040 without going back and amending his payroll for 2023?

I have been working in Quickbooks since 2006 and I am currently still using the desktop version and like it, but it has become to expensive for my small business clients and Quickbook online is nothing but a problem! Does anyone have a downloadable software program that does double entry, invoicing... and is affordable and is NOT cloud based they can recommend?

Disregard. I found the sale of primary Residence tab under the Bulk Disposition Setup and filled that out and it gave me my maximum exclusion. I am confirming that this is reported on the Form 4797? They will owe some tax because of some rental income and depreciation recapture?

New (married) client sold primary home with rental suites inside of the primary home. Their only other income is social security. Schedule E shows deprecation of assets. I put in Bulk Sale and attached all the assets to it. Sold for $1,042,000.00 property basis with improvements and seller fees $509,478.00 with $500,000.00 primary home exclusion that would leave $33,022.00 gain. ATX is only giving me $250,000.00 (why?) exclusion on Form 4797 and it is flowing over to the Form 8949 and Schedule D line 11 but showing they owe $35,245.00 in tax. Other than information on the sale of principal residence I did not fill in any other data because it shows it's flowing from the Schedule E. I did not Force 4797 section in the bulk sales because my understanding is that this would not be reported on Form 4797 because it was primary and rental home. I'm clearly missing something because they shouldn't owe this much money, if any? Help and guidance would be most appreciated! This is my first tax return with this kind of senerio.

TP sold a home that was a primary home from 2003 to 2014, then married and moved in with (now deceased) husband into his home and let her kids live in it from 2015 to 2020. She then turned it into a rental from 2020 until in sold in 2022 at a substantial gain. Is there any way I can reduce that gain because it was a primary home for 11 years? If so, where would I acknowledge that? Right now it is being reported as a bulk sale on the Schedule E fixed assets form and flowing to a 4797.

TP (90 years old, bless his heart) received 1099R for gross distribution of $227,701.42 with Box 2 showing all of it taxable; he said that was incorrect so I told him (many times) he had to go back to the company and get a corrected 1099R with the correct taxable amount. With his permission we went ahead and filed his tax return and he paid ALOT of taxes, not knowing how long it would take to get the corrected 1099R or even if the company would do a corrected. He received another replacement 1099R with the correct taxable amount this time but this company failed to mark the corrected box so it appears to be another distribution, although both 1099R's show as total distributions. I believe he needs to go back, again, and request they mark the corrected box so he doesn't get a letter from the IRS later on showing he failed to report more income. Am I correct in thinking this? I do not want to send this man on another goose chase if I don't have to, but I also don't want to have to file multiple amendments later.

TP's wife who has lived in the US for 30 years (green card) starting receiving her Japanese social security this year. She says she doesn't have to pay taxes because it's taxable in Japan even thought she paid no taxes on it because it's below her filing threshold. I have other clients in similar situation from UK and one from Norway and they always report their small incomes and pay taxes on it. From my research the Japanese social security is taxable here in the US. She does not go to Japan, has no home there or job either. Is there any other reason it wouldn't be taxable? Otherwise it is right?

So lets assume he is correct, will a corrected 1099 R be required to file or is there a way in ATX to show that rollover so it is not taxed?

TP received a 1099 R for $227,701.42 (annuity) with a distribution code of 7D showing all of it as taxable. He is insistent that it was a rollover into another account, so the code is incorrect. I have asked him (twice, he's 92 and confused) for the first statement for the company it was rolled over into to show money out and money in. Can I send that as an attachment and do a rollover explanation in ATX and put 0 in box 2a showing it as not taxable? I can't seem to find any other way around this to show it as not taxable without waiting for a corrected 1099R. What is my best option with this, especially working with such an elderly man who keeps bringing me the wrong information.

TP has finally gotten a significant settlement for the principal home that was destroyed in the California Paradise fire. They were told they could write off the $220,000.00 (gross) they received against the Sale of Principal Residence because they lived in it for over their 2 years, it was their only home and it burned to the ground. They did receive insurance money in full for replacement, moved, and are building a new home in Oregon. All I can find is that the house that burned down becomes apart of their basis (money & time) for the new home and there is no exclusion allowed. Does anyone have any experience or wisdom for me on this?

I have a client that purchased a 2021 Toyota Prius Prime and wants the Qualified Plug in vehicle credit. I have gone to multiple IRS sites and the US department of energy site. All I can find is that the credit phase out initiated for this model started but I can't find out much else. How do I know how much credit to take or if they can even get the credit? All the IRS websites just seem to go around in circles?

I am aware of the legal fees being taxable. We are not sure which direction they are going to take. Lawsuit is based on whistleblower but they are trying to stay away from that and use other stupid reasons. They have already paid out two other whistleblower cases and has another suit pending after my sons case. This is definitely big corrupt business trying to squish the little guy!

My son has a large court case coming up in September that has been postponed for 3 years (thanks covid) it looks like he will be receiving approximately $850,000.00 to 1,000,000.00 in settlement. Some of it will be for wages and some of it will be compensatory damages. He files single, although he does have a son (ex wife claims). He is 90% disabled vet with all his health expenses paid through the VA and his disability pay. He is heading off to Nursing School in September (He already has his associates degree) with all of it being paid with his GI Bill and a lot of scholarships. He has no other income. My question is: He is going to have to pay ALOT of taxes unless I can figure out someway to offset that income. I do not do taxes for high income earners so I do not have a good base of knowledge in that area. I know he will phase out of making any IRA contributions, and because of the VA health there seems no point in starting a HSA for that deduction. He does not want to own any rental property or start a business. He is planning on continuing his education in the medical field and working for the VA. Any good suggestions on how to offset his taxes?

TP receives two 1099R's from State Street Retiree Services for United airlines. Gross Distribution shows $2149.94 and $10,749.70, taxable amounts are blank. The money he receives is because he gets it from the Pension Benefit Guaranty Corp, because United Airlines went bankrupt in 2002 and TP lost all his $80,000.00+ in employee stock ownership and his $30,000.00 + annual pension. I can't seem to find alot of information on how much of this gross distribution is actually taxable. TP knows nothing about it and prior tax preparer only claimed a small portion of it, but I have no worksheets to see why. TP says he never had to fund anything into his pension or the employee stock ownership, so there would be no basis. I will go back and ask TP to bring me all the 2020 tax data to see if I can piece it together. Does anyone have any insight into this or links to see if it is all taxable or not? I was wondering if it wasn't taxable because it is such a small amount compared to what he lost?