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Corduroy Frog

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Posts posted by Corduroy Frog

  1. 2 hours ago, jklcpa said:

    Have you tried looking at that website's Help or FAQs?

    No.  The website I portrayed is fictitious (to appeal to John H), and I don't want to access a real website because they will do everything imaginable to spam me.  My real question is whether a participant can avoid W-2G income by leaving money in the account.

  2. Website gambling on sports has exploded in last couple years.  One advantage, is they are able to track losses more accurately than anything available in the past.  I'm wondering how they will issue W-2G information statements.

    Assume for the calendar year, John H wins $5000 in one lick.  And then has $4300 in accumulated losses during the year.  All the money is kept on deposit except $250, meaning he has taken out $450, leaving the rest.

    GetRickQuickonBeachVolleyball.com is the website.  How do they issue the W-2G?

    a.  $5000 Gross Winnings 

    b.  $ 700  Winnings after Losses

    c.  $ 450  Winnings taken out of account.

    d.  ?????

     

  3. I got hung up on RDP, never heard of it.  Apparently stands for Registered Domestic Provider.  Still never heard of it.

    Your post is clear and provides specific direction as to how to proceed.  MFJ for Federal equates to MFJ for California.

    Thank you much - Ron

  4. One of my TN clients has unusual but moderate California wages, and I haven't done a CA return in years.

    Depending on the 2023 Instructions, there is no information for Line 3, filing status.  The 540NR line 3 accommodates the filing status as "Married RDP Filing Separately."  Nothing in the instructions help with Line 3.

    It could be that if a married couple files joint, CA will not allow the 540NR to be filed joint.  The other spouse makes significant money, so CA would benefit if this is the case.

    Sorry for my ignorance, and appreciate any help.

     

  5. 23 hours ago, joanmcq said:

    Sacramento; bought in 2000, 2001, 2003.   Lucky

    Lucky indeed Joan.  Since you have sold out in Sacramento and moved to Nevada, I've got a good friend who did exactly the same thing.  If you live in Reno, you may know CPA Richard Schively.  He couldn't stand Sacramento and now lives on the Truckee River.  Schively was partner at Arthur Anderson before the disaster.  Arthur Anderson was huge at the time, and lots of good people ended up on the outs, not just the guilty ones.

    I did note that you were in NV, maybe Reno, Carson City, or Vegas.

  6. 1 hour ago, kathyc2 said:

    Well, cry me a river.  To be at the 20% LTCG rate, their marginal rate is at a minimum 35%.  So, they get a discount of 15%.  Those at 12% marginal rate have 0 for LTCG rates or a 12% discount.  Middle income people at 22% marginal rate and 15% get a 7% discount.  

    Cry me a Wabash?  All of your statements are true, but missing the point.  Anything slowing down real estate hurts those in much lower tax brackets, slows down construction jobs, slows down the economy.

  7. 8 hours ago, joanmcq said:

    Frog, how does someone who works but doesn't earn enough be affected by the NIIT?

    Good question Joan.  Obviously, they cannot be DIRECTLY affected by the NIIT on their tax return.

    Where they get affected is in the slowdown of real estate movement because taxes are too high.  In my career, I've been through two political movements to do away with capital gains because only the wealthy could benefit.  Once they did away with LTCG altogether.  Before the year was out, they brought LTCG back to rescue a sick real estate market.

    The current rates for LTCG are 15%, plus another 5% for the big income people, plus 3.8% NIIT.  Total 23.8%.  I do have a few landowners who ask me to calculate tax on sale of their farmland.  Farmers are not used to paying these bodacious taxes, and most of them simply tell me they will just hold on until someone meets a price sufficient to pay taxes.

  8. Good one Lion.  Another is the dreaded Obamacare tax, especially the 3.8% NIT on investments.  The problem with taxing investments affects the sale of real estate, which depresses jobs for those who work but do not earn enough to pay the tax.  This has been a point of contention with capital gains for decades.

    • Like 1
  9. Many elements are not adjusted for inflation.  Which is the worst, i.e. needs adjustment more than any other?

    My vote is for Child Care Credit.  The $3000 and $6000 limit has been around forever.  The increased percentage??  Forget about it - if the couple gets more than 20% they can't afford to pay babysitting nowadays.

    To make matters worse, employers have gone absolutely ga-ga over a new benefit - up to $10,000 tax deferral for babysitting.  Some employees are going after this like a pig after slop.  But it only works if it negates the Child Care Credit in its entirety.  And if the spouse doesn't work or have earned income, ALL of it is taxable.  My clients find out about it too late, and drop it after one year of misery.

    Yes, my vote is for the Child Care Credit - dubious benefit, and nowhere NEAR the hyper-inflated cost of paying a babysitting service.

    • Like 3
  10. I always take the word of the client, unless there is a suspicious reason not to.  It is the job of the IRS to audit them, not mine.  One concern is that these assets were purchased prior to the formation of the partnership, and were contributed as capital investment - i.e. "hot" assets.  They will have to be tracked if that is the case for five years.

    Also, my experience is that the partnership will not last long, unless they are bound together like family members.  I don't know how many of these partners love each other to start with, and after six months they are ready to go their separate ways.  Running a business is not the same as painting.

    • Like 5
  11. 14 hours ago, JohnH said:

    Sorry, I lost you at “JohnH has a tax-preparation and consulting business in North Carolina, which makes $100,000 per year.”  😳

    JohnH, sorry I couldn't resist!  I remember the Pablo restaurant on Polk Place years ago....

  12. Self-Rental is subject to Self-Employment Tax.

    One common thing businesses are doing:  Create an LLC with their building or real estate - pay at least FMV rent to the building, and take a deduction for rent against their self-employment tax.  And then the LLC reports rental income not subject to self-employment tax.

    If the building is rented to no other party, how does this strategy stack up to the self-rental doctrine?

    JohnH has a tax-preparation and consulting business in North Carolina, which makes $100,000 per year.  He and his wife own a building and decide to open up an LLC filing as a partnership.  He pays enough rent such that the LLC makes $20,000 profit, and the LLC reports its income on Form 8825 meaning there is no self-employment tax.  The LLC has no other customers paying rent.

    Eureka!!!  JohnH still makes $100,000 per year, but pays self-employment tax on only $80,000.  But has he violated the "Self-Rental" doctrine??

     

     

     

     

    • Confused 1
  13. I am seeing many of the problems I've described with Schwab are in the process of being corrected, caught up, resubmitted, etc.  To the effect that all will be well, especially for those who haven't filed yet.  Some time ago I opened a post that tax season was getting shorter.  We have LLCs now due March 15th, and if you have to wait until after March 1 to make appointments with clients who have brokerage statements, you have to cram those appointments into less than 45 days.

    I would estimate that 2/3 of my clients have brokerage statements.

    • Like 1
  14. 1098-T.  Many of the forms are scarce because the issuers want to bail out of printing them and paying postage.  When you ask the client, either he doesn't know he has them, or else you get:   "Oh yeah, I've got that right here on my phone!!"  [Scroll...Scroll...Scroll...Scroll 95 more times]  20 minutes later they hand you the phone which you can barely read.

    "Can you print this out?"   "Oh no we don't have a printer anymore.  We keep everything on our phone!!!"

    • Like 2
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  15. On 2/29/2024 at 11:33 AM, Lion EA said:

    Hey, Frog, don't you love it when the statement shows custodial fees of $7,500 but the client whines about your $750 fee?!

    I'm amazed at the "Here to Help You" with our expertise.  "We are experts in the field and are able to advise ignorant people like you to help you."

    Bankers are experts in banking and "help" their customers by talking them into a $100,000 CD paying less that 1/2 of one per cent.

    Stockbrokers are experts in investing and "help" their customers by investing their money in mutual funds, where $$$ is skimmed off the top for the brokerage company and their cronies.  To speak nothing of their fees.

    Online colleges are experts in "help" training people for the variety of professions in their curriculum.  I worked with an Accountant with a Masters Degree from University of Phoenix who couldn't even reconcile a bank account.

    Big-box Tax Preparation firms and TurboTax will "help" customers to get the "Maximum" Refund.  Better than going to people on this message board.  In fact, Turbo Tax wants to help customers so badly that they will perform their service "Free."

    I could go on-and-on-and-on., but Lion knows what I'm talking about.

     

  16. Yes they do.  And that turns out to be the saving factor.  If one takes time to look at the account number, they would send a message as well because they would be different.

    Update on the "wrong" Schwab statement referred to in the earlier post.  The late statement finally arrived, and it was from TD Ameritrade.  Much easier to understand.

     

    • Like 1
  17. Good question, Judy.  The client who had the Schwab statement that was portrayed incorrectly also will have a Schwab statement for the TD Ameritrade period.  His stockbroker told the client that the portion for TD Ameritrade would not be sent to him before March, so I was unable to complete his taxes.

    Situation with the Ameritrade takeover has turned into a real snake-pit.  Held up my dead brother's estate from being closed out, and with as many different accounts of problems, I've got to wonder whether the Schwab issuing office for these statements is centralized or issued from different locations.

  18. 7 minutes ago, jklcpa said:

     but your post above still does not explain why the 1099-DIV in your original post reported qualified dividends in excess of the total ordinary dividends.

    I don't know why that happened.  I've seen a few Schwab brokerage statements this year, and only one where the qualified dividends were split out differently from the ordinary dividends.  I don't know why that happened, and possibly Schwab will issue a corrected copy.

    This post is a different situation from the one described above - why I began a separate discussion.

  19. I prefer someone who charges based on a percentage of portfolio value.  That way they prosper if you prosper, and suffer if you suffer.  The sure-fire way for rewards to follow performance.  Generally a percentage over 2% is too much.

    I have seen so many statements showing $1500 as dividend income, and custodial fees of $1800.  Customer is being duped.

    • Like 2
  20. A new topic, because the issue is different.  Schwab is not doing anything wrong (perhaps).

    Sat down to two Schwab Brokerage statements:

    The first is 1099-DIV:  starts ABC $96.00   DEF  $128.00   GHI  $144.00 .....All "qualified".

    The second 1099-DIV:  starts ABC $96.00  DEF  $128.00  GHI  $144.00 .....All "qualified."

    Dealing with a duplication, right?  So ignore the second document and put it away.  Not so fast.  We notice another listed company XYZ  $118.00 on the first statement, and $128.00 on the second statement.   Yikes!!  What's happening?

    Schwab bought out TD Ameritrade.  Didn't wait for year-end, bought out during the year.  Some companies kept their quarterly dividends the same.  The afotementioned ABC paid $24 four times during the year, twice under TD Ameritrade, and twice under Schwab.  In like fashion, the others did the same.  However, XYZ paid $59 twice under TD Ameritrade, but then increased their dividends to $64, and then paid twice under Schwab.  Total $246.

    So at first glance these two brokerage statements from Schwab appear to be duplicates.  They are not.  Taxpayer must report the total of BOTH statements as income.

     

     

     

     

  21. 2 hours ago, BrewOne said:

    started seeing them last year.  Not proper, according to instructions for Boxes 1a and 1b (specifically says to include amounts in box 1b in 1a total).  The brokers probably just want to keep us on our toes.

    I thought so Brew.  The issuer is a major stockbrokerage company.

  22. Assume FROG Mutual Fund dividends are $100, with $90 being "Qualified"..

    I am accustomed to seeing Dividends reported in the following manner:  Frog Dividends $100, Qualified Dividends $90.

    But now I am seeing a 1099-DIV as follows:  Frog Dividends $10, Qualified Dividends $90.

    Has something changed this year, or is the issuer of the 1099-DIV improperly reporting?

     

     

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