thinks too much

There is a repayment max at some lower income levels. Hopefully the daughter does not qualify as a dependent , and has lower income on her return. (I assume your client would have to repay all, hence the upset stomach). Check out the instructions to the premium tax credit form carefully about allocating between tax households-- --you can hopefully allocate premium to the daughter's return to minimize the damage. Two amended returns and some repayment, so no magic bullet. . . but not worst case either. I agree with Margaret CPA in OH -- it happens -- you apologize and show value by working to minimize the damage and make it right by paying any penalties and interest. The correct tax liability was theirs either way.

The post may be 5 years old, but it is clearly relevant to Newbie, and apparently myself -- as I have a client for whom I would WANT to capitalize his large truck tires/repairs this year . He has little income this year as he is just starting out. Also, in his case his repairs were done within months, perhaps up to one year after purchase, so was actually improving over condition purchased - repairs = 50% purchase price.