Dave T

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

T/P, age 41, made contribution to Roth IRA in prior year of $ 544. In 2019 he makes total distribution from account in the amount of $ 438. Box 2b indicates total distribution and box 5 of 1099R shows his total contributions. Distribution code is 1B. Early distribution of Roth IRA no known exceptions. ATX doesn't show the $438 as taxable but does calculate an early distribution penalty. Seems to me that there shouldn't be a penalty since his contributions exceeding his total withdrawal. Am I missing something? Thanks for your assistance Dave T

My father passed away in August of 2019 after being in a nursing for some time and was paying the daily self pay rate so shouldn't have any tax liability for the year. At the time of his death he had a fair amount in the bank and in non-qualified investments. As of now his estate has not been established so am wondering how any dividends, capital gains and interest are taxed for those earnings subsequent to his passing until the estate has been finalized. Thank you for any assistance with this. Dave T

T/P's wife began working in church school part time in 2019. Approx. 10 hours per week in their cafeteria. School provides her with 1099-Misc. Non Employee Compensation. There are set hours. Work is supervised. Done at their facility obviously so seems to me she should have received a W-2 not 1099. I have done the taxes for one of the teachers there for a number of years and she receives a W-2 with SS withheld so I am a bit confused. Any thoughts? Thank you Dave T

Thanks for all your responses. Found the form to allocate earnings in Ohio only and as you have said, the impact is nominal. $ 3.00 owed to the state. Thanks again

Client was in Ohio during college spring semester and earned $650 working at school and upon graduation in early May returned home to NY where she earned $20K. I am filing the Ohio return as part year resident but it isn't allocating her Ohio wages but rather including her entire Federal AGI. I've put in the dates that she wasn't in Ohio but obviously I'm not doing something correctly. Any help would be appreciated. Thank you Dave T

Thanks Yardley. I had seen this article as well which helped lead to my confusion as to zero basis or something else.. In my particular case, the IPO amount as basis has a significant impact on the return. Thanks again

Been doing some research and seem to be getting conflicting opinions on this. Client sold shares in Manulife which I believe had acquired john Hancock Life insurance in the past. John Hancock was demutualized in 1999. Client had been a long time policy holder. The question has to do with basis. IRS has taken position of zero basis but I have also seen cases where court overturned that position. Transaction has fairly substantial impact for client when I use zero basis so am not sure how to proceed. Thanks is advance. Dave T

Client moved to Arizona beginning of 2018. He hasn't sent me his info. yet as he says AZ hasn't finalized their forms yet. Seems odd at this stage of the game. Anyone know? Thanks Dave T

Thanks for the help on this folks. As a follow up, if the 1041 is filed as blank, does a K-1 need to be prepared and given to the daughter as beneficiary or the Mom as grantor? Thanks again Dave T

Clients have had a multi level marketing business for several years. ( Alternative energy provider). In 2018 they recruited their 17 year old daughter to be one of their consultants and set up a revocable trust for her earnings. entitled "________ Family Trust". MLM company issues 1099 to the trust with approximately $3k in earnings. Do I need to do a 1041 for the trust or should the income from the trust be recorded on the daughter's return? Is it a deciding factor whether the earnings are distributed? Thanks for any help with this. I've not encountered something like this before. Dave T

Thanks very much !

Jack Would be glad to do so but I must confess my naivete. How do I send a PM? Thanks for your willingness to help with this Dave T

Housing allowance was taken against his wages not hers. Also she didn't opt of Social Security. He did years ago and she only became clergy more recently and chose not to opt out. As to your latter question, I can't answer that nor is it my position to ask.

Yes the wife's $27K was input via W-2 but no social security withheld and thus the need to do schedule S/E When answering the EIC questions it asks in section 5 did you have S/E earnings due to be a clergy which is yes and thus on Worksheet B it added the $27K from W-2 wages as well as the $27K from schedule S/E which put them over the threshold for EIC eligibility. Thanks for your help with this. It definitely seems they should be entitled.