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TexTaxToo

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Everything posted by TexTaxToo

  1. Interesting question for a tax lawyer. If you think they qualify, would they be able to take the entire $500K exclusion on each sale? Or should they get only a combined $500K exclusion on the two sales? Both may run into the problem that the exclusion is not allowed for any sale if the exclusion was taken on a sale within the previous two years. Of course, they could have made a single sale to a third party, who then sold the two units separately. Since they didn't, I don't know the answer.
  2. See Pub. 463. You can switch back and forth between the standard mileage rate and actual expenses any year, as long as you used standard mileage the first year the vehicle was in service. If you are asking about depreciation, part of the standard mileage rate is depreciation which must be used to reduce basis. Again, see the table in Pub. 463. Once you have used the standard mileage rate the first year, only straight line depreciation is available in the years you use actual expenses:
  3. Announced today: https://www.irs.gov/newsroom/irs-increases-mileage-rate-for-remainder-of-2022 The revised standard mileage rates are: (1) Business 62.5 cents per mile (2) Medical and moving 22 cents per mile The revised rates apply to mileage on or after July 1, 2022.
  4. Was the trustee notified that the distributions were a return of excess contributions? The trustee should indicate that in Box 3 of the 1099-SA and determine if there were any earnings included in the distribution (reported in box 2). These are taxable.
  5. You may want to read Revenue Procedure 21-49 which describes "Emergency EIDL Grants" of up to $10,000 under the CARES act and "Supplemental Targeted EIDL Advances" of up to $5,000 additional under ARPA.
  6. When the IRS announced that anyone could now get an IP PIN, they said: The IRS plans to offer an opt out feature to the IP PIN program in 2022. But I haven't seen any announcement of how to do that, yet.
  7. IP PINs expire each year. You must use the new IP PIN even if filing a prior year return.
  8. The rule that there is no PTC for incomes above 400% of FPL was removed for 2021 and 2022.
  9. Judy, please don't. I've learned a lot from your posts. I assume (hope) you are joking. I make more mistakes than I care to admit. The great thing about this board is that there are always plenty of proofreaders.
  10. If both spouses are over 55, they can each contribute $1,000 catchup to their own HSA. If they split the family amount equally, the wife's limit would be $4,650 for the year - and the husband's 5/12 of that or $1,937.50 for a total of $6587.50 - they can of course split the $7,300 any way they want for the first 5 months - the catchup cannot be split.
  11. If they didn't get APTC (column C blank), they are not required to file Form 8962. However, the law changed for 2021 and higher-income people may now qualify for PTC (some with incomes well over $100,000). You can obtain the values to put in column B (SLCSP amounts) at https://www.healthcare.gov/tax-tool/ Use those to see if they qualify for PTC. (You will still put zeroes in column C in the software.)
  12. Sure. The only thing you cannot do is go from joint to separate after the due date. I read somewhere that you cannot e-file to change filing status, but I'm not sure if that's correct. In general, you can e-file three amendments - after that, they must be paper.
  13. I agree that unused funds cannot be refunded, but the Consolidated Appropriations Act 2021 allows plans to extend the grace period to 12 months for plan years 2020 and 2021. They can either extend the claims period or allow carry over of the unused funds. They can also allow the carried over funds to be used for dependents who are age 13 (normally only care for those under 13 or disabled would qualify). See Notice 2021-15 and Notice 2021-26 The plan must still be amended, so this probably won't help this TP, but they can check with the administrator.
  14. But in this case, any loss on a personal residence would be disallowed regardless. I think you mean that this would apply if the property is rented or used in a business or as an investment, not if the daughter continues to use it as a personal residence. I am also curious about the basis, but perhaps Tracy is asking if the daughter will qualify for the maximum exclusion if she eventually sells the house after living there long enough to qualify. If the basis is correct, I believe she will be able to use the donor's basis in figuring her gain, and can use the exclusion on top of that.
  15. CTC for those residing outside the U.S. is non-refundable, so she would need to have a tax liability to benefit. ACTC is available as a refundable credit, but requires earned income. But why wouldn't you include the children to claim RRC for them?
  16. Citizens residing outside the U.S. half the year can still get the full new amount ($3000 or $3600 per child) as a non-refundable credit (if below the AGI threshold). If they don't have enough tax liability to make use of it, they get up to $1400 as a refundable credit as in previous years.
  17. Here's the FAQs revision notice with a link to the PDF: https://www.irs.gov/newsroom/irs-revises-frequently-asked-questions-on-2020-unemployment-compensation-exclusion Here's a state by state list of who to contact: https://www.dol.gov/agencies/eta/UIIDtheft
  18. If they repay any of the distribution now, I think you will need to amend 2020 to get a refund of the tax paid on that amount. They cannot reduce their 2021 income by the repayment amount unless they had spread the income over 3 years and so have income in 2021 from the distribution. In your case, they have to go back and reduce 2020 income. For your case (repayment when all tax was paid in 2020), the instructions say you must also file 8915-F in 2021 and fill out lines 14 and/or 25 (only). It's not really clear why, since it will not affect the 2021 return. Apparently, just for documentation.
  19. I thought perhaps Judy was referring to this TIGTA report from last year: https://www.treasury.gov/tigta/auditreports/2021reports/202146064fr.pdf
  20. Quotes from yesterday's Taxpayer Advocate blog: https://www.taxpayeradvocate.irs.gov/news/nta-blog-getting-rid-of-the-kryptonite-the-irs-should-quickly-implement-scanning-technology-to-process-paper-tax-returns/
  21. If they received APTC, they must file, regardless of income. (Unless someone claims them as a dependent, in which case the 1095-A would be reconciled on that person's return.) Presumably, when they applied they had income or expected to have income, and the Marketplace determined that they qualified. In that case, they should have reported to the Marketplace when it became clear they would not have income, and should have switched to Medicaid. But usually they won't be penalized for that, and can still claim PTC (assuming they got APTC). However, if they lied ("with intentional or reckless disregard for the facts, provided incorrect information to a Marketplace"), they do not qualify for PTC and will have to pay back any APTC.
  22. It's not clear from your first post which year's return you are preparing. Maybe I'm reading it wrong, but if the daughter dropped out in Dec. 2020, then there would be no expenses in 2021 - and no credit or 1098-T for TY2021. They would qualify for TY2020 for expenses paid in 2020 for the 2020 fall semester (if not refunded). They could qualify again in 2022 for the fall semester if she re-enrolls.
  23. I'm not sure what contributions during the last 3 years has to do with it. (They could affect taxability of QCDs.) When you print Form 8606, do you see the basis ($18,000 assuming no previous withdrawals) on line 2, the FMV as of 12/31 on line 6? Then there should be a percentage on line 10, and the nontaxable portion on line 13.
  24. Not so fast! Code J is an early distribution. Assuming that is correct and they are under 59 1/2, it is not a qualified distribution. The basis can be withdrawn tax and penalty free, but the earnings are taxable and subject to the 10% penalty. (The five-year holding period is not relevant.) Except that the $10,000 for first home IS a qualified distribution, so no tax and no penalty for that portion of the earnings.
  25. And of course ask about other possible exceptions to the penalty (e.g., education expenses, birth of a child, adoption, unemployment/health insurance, disability, or a large amount of medical expenses).
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