Sara EA

I have not noticed an increase in spam calls. I've used NoMoRobo for years and it's effective (and free). Get it. Between that and Comcast having a pretty good spam filter, I don't get many. Occasionally I get a call that the system announces to be from "potential spam"! or Anonymous. I have noticed a huge decrease in spam texts. For a few months I was getting multiple texts per day because there was a "problem" with my account (Netflix, Amazon, bank, PayPal, or unidentified account) or delivery of a package. I blocked a bunch but it did no good. Those have thankfully disappeared.

This is not "one little mistake." A heck of a lot of people had their personal contact and tax return data given to parties that have no business accessing it. How would YOU feel if your (and your family's) name, address, email, Soc Sec # , and income amounts and sources were shared with some anonymous others?

HRB, of all entities, had to know this was against the rules. When I worked there way back when, it was drilled into our heads. When the company started offering bank loans, mortgages, financial services, etc., each client had to sign a waiver to share their tax return info with the relevant subsidiary. I did read somewhere that some tic in the software allowed this info to be shared without the companies having full knowledge. Lawsuits are going to fly in all directions, and the offending companies may be fined out of existence.

I had a partnership with eight partners. As each one died, his or her heir got stepped-up basis on the value of their partnership interest at the time of death. By the time the last one died, there were eight partners including a trust with 12 beneficiaries! Actually, by the time I inherited this return, several partners had already died and basis had never been adjusted. Nothing had been sold, and there were always profits, so no returns had to be fixed. I spent a great deal of time making spreadsheets to calculate the correct basis for each partner. That's what you'll have to do. Make sure you charge for it! (Alas, in my case, our firm had handled this partnership so it was our fault that basis had never had been reconfigured, so I couldn't add a couple of thou to my fee.)

No Section 121 exclusion because she doesn't meet the 2 out of 5 year rule. Her basis is what she paid for the home plus major improvements minus depreciation. Yes, it goes on the 4797. I don't understand the desire to lower her gain. She made money from the investment and has to pay a fraction of it in taxes. That still leaves her with plenty left. When any of my clients tell me they are going to sell a rental property, I ask them to give me the sales paperwork when they do so I can tell them how much to put aside for taxes. That way there are no surprises and they expect the tax bill.

I once watched a squirrel burying nuts in my front garden. (Why not? Nice soft soil, no hard digging.) A chipmunk was hiding under a hydrangea in the other front garden. Every time the squirrel left to go get another nut, the chipmunk dashed across the walk and unburied the last nut, took it home, then returned to its hiding place.

The original owner of our firm seemed to have no rhyme or reason to his fees, until it hit the new owner and me that he was often charging based on ability to pay. That applied mainly to wealthier clients, who had exorbitant fees. Those with six-figure incomes with little more than W2s, Sch A, and bank interest were on the hook for $600 or more (and this was 20 years ago). A family-owned group of businesses that was making tons of money was charged triple just for monthly bank reconciliations compared to our other business clients. When he sold the firm, some of the clients did question their fees. We reduced most of them, many before they asked. So charging based on ability to pay works both ways. Like most of us, I do a bit of pro bono work and have a few clients whose fees I haven't raised in forever because I know they are struggling. For the majority, though, I am not one to give away my work. I have professional credentials, years of education and experience, and I give every return the time including research if needed to best serve that client. For this, I should be paid. We don't have many EITC clients, but even though they are low income we don't undercharge. There are risks involved with that category, and the extra due diligence takes time.

We use UltraTax for most tax prep, and we can enter income in all the boxes, so I don't think the IRS doesn't allow it.

Oh yeah? I had a client who had self-prepared for years and had depreciation correct down to the penny! I was impressed. Look at the prior year returns to see if depreciation was ever taken, but you don't have to amend or do anything with them. The 3115 will handle all the missed depreciation. Since the adjustment will increase current income, I believe there is an automatic election to spread the income over four years. You do have to calculate the missed depreciation. Every time I do that, I wonder if newer preparers even know how. I think we've all become a bit stupider by having software do so much math for us.

She was single at the time of the gift. Even if he was alive, gift-splitting between spouses is an election so you wouldn't need his SS unless they chose to split their gifts.

Bequests come from corpus. The beneficiaries will not get K1s for bequests. The charity will get the income and the rest of the corpus.

$203 is an odd amount, so this may be what it cost Habitat to come get the furniture (truck, labor, etc). In that case, your client is paying that bill for them so I'd add it to the donation. This s kind of like the fees that credit card companies charge for online donations. Donors are given a choice whether to pay it for the charity. If they don't, the charity pays it.

Normally it's an easy fix for congress to amend legislation to correct oversights like this. With the divisiveness in congress now, however, I'm not confident that they'll agree on anything.

I always preferred live. Hanging with other tax geeks was fun, and some questions people asked really helped figuring out things you hadn't put your finger on to ask. Since I moved to VA, however, live seminars are so far away that they would require overnight stays or hours on the road. I've adapted to online and find I get a lot out of virtual seminars if I keep taking notes and stay focused. I dropped my membership in NAEA this year, after almost 20 years. Seminars were way too far away, the online blog was sometimes informative but filled with posters just trying to be the smartest person in the room, and I realized that all I got out of my membership was a quarterly journal. The state chapter fees increased this year, and I decided that paying $365 for nothing but a journal wasn't worth it. In CT, at least I got to go to live seminars and network. They were expensive though, as NAEA spends a lot of its funds on lobbying and doesn't grant much to the state chapters to offset the cost of seminars. NATP seminars were more reasonable in price, but often they were a little too basic for me. I have retained my NATP membership.

I too will read a lot more. So many books out there to get into. I'll know everyone at the library on a first name basis. Revive the gardens. Organize the old photos and clean out the old files (could take a year). Birding sounds fun, and I'd love to be able to identify bird songs and calls. Think about all the fairly local places you haven't really explored and go see them. I've know a few movie buffs who finally got to binge on the oldies but goodies when they retired. You'll have more time to socialize--invite a neighbor for coffee or go to lunch together regularly. Join the Friends of the Library or Trout Unlimited or Quilters or whatever group that interests you to meet new people and have new opportunities. You could always volunteer for AARP or VITA during tax season if you miss it.

If there ends up being an estate tax, it is paid by the estate. As for the beneficiaries, it depends on what the estate does with the assets and what it distributes to the heirs and when. If it both sells the farm and distributes the cash in its final year, the heirs pay any cap gains tax on their portion. If it sells and doesn't distribute in the same year, it pays any cap gains. You can't really answer the client's questions because there are too many unknowns here. I'm not sure I'd like a client who is counting her money before her parents pass away. Hope my kids aren't doing that.

Since the returns will be paper filed, no point in using the estate bank account because paper checks will be issued anyway (no direct deposit). There must be an EIN because a bank account couldn't be opened without a TIN. It doesn't go on the 1040 unless there is income paid after the death but reported to the decedent. For example, a brokerage account may report the whole year worth of dividends to the decedent, in which case you put the whole amount on the 1040 and then back out the amount paid after death, using the explanation "IRD to be reported by EIN...." That won't be an issue until 2023. Don't worry about confusing CT or IRS. IRS doesn't pay much attention to state entries, and CT won't complain if you report income to them.

If court appointed, no need for the 1310. The refund will be payable to the estate. In my experience, though, the IRS always asks for the 1310. You will have to use the admin's address so any correspondence doesn't go to the deceased's old address. On the street address line I usually put c/o [name of admin] and then his address. The forms should go to the IRS address used by CT residents. I have never had to file a death certificate. Since refunds will go to the estate, you should get an EIN so son can open a bank account. Better find out if there was a will. If the person died intestate and had no spouse or children, CT law says the parent inherits all.

Is there an actual estate and court-appointed administrator? If so, the estate gets the refund and the admin directs it to the heirs as directed by the will or state law. If the heirs want the mother to get it all, the easiest way is just to give it to her themselves when they get their distributions. Sometimes all the deceased's assets were titled TOD or with named beneficiaries so there is no Probate estate. In that case a responsible party signs the 1310 and agrees that the funds will be distributed in accordance with the will or state law. One person can't just decide to claim the funds and keep them. If there is a court-appointed admin, all the returns with refunds have to be paper filed with a copy of the court appointment attached. (It's not on the list of the forms that can be attached via 8453 or pdf.) All of the CT returns must be paper filed as well with a copy of the Federal 1310. If there is a balance due, go ahead and efile.

In all the years I have used it and the client had an issue, the IRS still demanded the 2848 before they would talk to me. Our software automatically checks it, but in practice it's useless.

It sounds like it should work IF the systems are up and running properly. I remember the first year of the economic stimulus payments, when the IRS didn't have time to reprogram its systems so any return that claimed the credit had to be hand verified. Many of those people had indeed gotten a stimulus payment but "forgot" or didn't notice because it was direct deposited. The ones who actually didn't get a stimulus check had to wait months for their money. For the EV credit, zillions of dealers will have to be educated and trained, and eventually have to start asking about AGI, while Congress is taking money away from the IRS. What could go wrong?

How is the buyer of the used vehicle to know if the credit was claimed before? The new EV rules make the credit easier and at the same time harder for everyone. Easier for us is that we no longer have to search to see if a certain vehicle qualifies. The rules are so complex about this or that material being sourced here or there in what percentages that now we can just tell clients to ask their dealer for credit eligibility. Harder for us are the rules that will kick in later that the credit can be claimed at the dealership to lower the price of the vehicle if the purchaser chooses. How many will take it when they buy and then "forget" when we do their tax return? Will the IRS systems detect the double dipping? There will be AGI limits too. How many dealers won't even ask and give the buyer the credit to cinch the deal? Will the IRS systems notice that? Credits taken at the dealership are out of our hands, but of course any rejections will be our fault.

The income will go on her return, as the IRS says it should be reported by the person who received it. The withholding, however, is in his SS number, not hers or the estate's, and he can't file the year after he died. Following the good advice from other above, I asked the client to get corrected 1099Rs with her info on them.

The problem is not the income but the withholding. It was reported in the decedent's SS number. He died the prior year and can't file for 2022. Spouse or estate can't claim the withholding because it was reported in his SS, not hers or the estate's EIN. I'll go the route of trying to get the 1099Rs corrected. Thanks everyone for the suggestion.

A dear client died in 2021. The estate is on a fiscal year, no problem there. His spouse will be filing Single in 2022. There are three 2022 IRA distributions reported to him under his Soc Sec number. IRS says the person who received them should report them; they were deposited into their joint account, so they go on her 2022 return. There was state and federal withholding on the 1099R, under his SS so I can't put the amounts on her return. The 1310 doesn't cover this situation. Any ideas how to get the withholding back?