Dave T

Thanks Abby. I should have been more specific in that it was the supplemental schedule that showed his zero basis and that it was disallowed loses that had been being carried forward. He sold his share at the very beginning of 2019 . Thanks again.

A relatively new client sold his interest in a partnership at the beginning of 2019. His adjusted basis in the partnership, per the K-1 provided by another CPA, shows as zero. He had never contributed any capital and was brought in due to his knowledge of some very high tech equipment. The K-1 also shows that the partnership had been carrying some disallowed losses. I know his basis can't go below zero but I have two questions; would any proceeds he receives be considered long term capital gain ( he has had this several years ) and do these loses then get distributed to the remaining partners? I've never encountered this before so any help would be appreciated. Thank you Dave T

Gail - that was my thinking as well. Thank you

I never renew early. I always wait until the fall and then call and negotiate with the sales rep.

She is self employed. and receives a 1099 Misc. Non- Employee Compensation. It was not an alternative fuel car. She provides them the mileage, both business and personal and they compute the income portion. Aside from the gas, all other expenses are paid by the MLM.

Tax payer is part of a MLM ( alternative energy provider ) As a result of meeting sales goals they were awarded the use of a car for a year. They diligently recorded business and personal use which they reported to the MLM and the personal component was added to their income for the year. She provided me with a log of business miles but it seems that would be double dipping to take this as a deduction or am I missing something. Thank you. Dave T

Linda, As noted from Margaret and Rita the housing is subject to SE tax but so is his W-2 wages. When computing the S/E tax. be sure and ask it there are any unreimbursed ministerial expenses such as mileage, meals, etc. These are not subject to S/E. I use ATX but use an Excel spreadsheet to compute S/E. Hope this helps. Dave T

Client has a business of helping place foreign exchange students. She works with several agencies to do so and receives 1099_Misc. I've reported this and related expenses on Sch. C with offsetting expenses of mileage, etc. In addition, she hosts students in her own home and receives a monthly stipend for doing so and also receives a 1099 for the stipend amount at year end. I am trying to determine how to report this income. I believe it should be shown as Other Income and not subject to S/E tax. IRS allows a $ 50/month charitable deduction but have read where some take offsetting expenses such as food, % of utilities. etc. Any guidance would be appreciated. Dave T

Thank you Gail and others. Dave T

Working on Dad's tax return ( he passed in 2019.) During 2019 he sold a number of assets to pay his nursing home bill. The brokerage statement shows these transaction but one in particular has 'Unknown" for date of acquisition. I know that he purchased this one stock many years ago so am sure it is long term but not sure of the date. I tried putting 'Unknown" in the date acquired field and received an error message stating valid entries are, Various, a Specific Date, or INH-2010. Not sure what this last item is but seems to work when entered. Anyone know what this stands for? Thanks Dave T

Thank you Rita. Yes that is what I did. I entered Code 12 on the 5329 which removed the penalty. Also yes as to new client. I misspoke on my original post. His contribution was in 2019 and also withdrew in 2019. He has changed jobs frequently during the year ( 4 w-2's ) and apparently withdrew after leaving one of his employers. You are correct the market was on an upward trajectory but he must have cashed out on a down day. At any rate, thank you for your assistance.

I think I figured this out. Entering the distribution and contribution on the 8606 didn't remove the penalty but entering the contribution on line 2 of the 5329 did remove it, Since the contribution was greater than the total distribution penalty amount went to zero. Thanks

Thanks Rita If you find something I would appreciate it. Seems to be conflicting opinions on this and my contention is that his contributions were greater than his total withdrawal and thus no penalty. Others maintain it is because he doesn't meet the 5 year or 591/2 rules. Thanks

Thanks Jack He didn't meet the 5 year rule or the age rule but the thing that confused me was that his total distribution was greater than his total contributions.

Eric, Tried that but still calculating the penalty. As an aside, the 8606 still shows as "Draft". Thanks