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  1. Are you sure neither parent qualifies for HOH? Just because the kids "claimed" themselves, it doesn't mean that they should have. If either kid is full time student under age 24 and did not provide over 1/2 of their own support, HOH, education credits and even EIC may come into play.
  2. Correct. Because there will always be basis in IRA, a calculation should always be done for how much of distribution is taxable for the rest of their lives.
  3. So, what happened this year was a 2,800 loss, correct? She didn't take any money out of the partnership, so no taxable gain for the year, and it appears there would not be an allowable loss. At risk or basis limitations are likely the same thing when it comes down to it. Prior years may be in error, but from what you are saying, I don't see how that would keep your from completing 2020 return. Was there not a 6198 with the 1040 the year prior to when you took over? Since there were not losses of the 40K nature during the years you were doing the returns, it certainly sounds like there should have been as the losses occurred prior. If whoever was preparing the 1040's prior wasn't filing 6198's it may be a mess to clean up, but I don't see where it would keep you from completing 2020 return.
  4. You didn't say anything about her taking money out of partnership, so I'm confused why you think the loss may be taxable income? Sounds to me like non-deductible because of at risk limitations.
  5. Are you actually filing innocent spouse as opposed to injured spouse? For injured spouse the tax is calculated MFJ. 8379 is then completed so the that the injured spouse (the one without past debts that refund would be held to pay) still gets the refund they personally would have been entitled to.
  6. Husband/Dad passed in June 2019, leaving wife and 2 minor children. Kids are each receiving SS survivor benefits. Wife received correct EIP payments: 3,400, 1,800 and 4,200. However, each kid received 1,200, 600, and 1,400 direct deposited to the account where their SS goes. I'm guessing there was some kind of program saying if someone receives SS and does not file 1040, send them EIP, disregarding the fact they are minors. I'm also guessing this is big enough that when they figure it out they may try to claw back EIP from SS benefits??? I'm telling Mom to just hold on to the money for now. Agree??
  7. Because the 10K was used as an ordinary rate tax deduction in the year(s) it was a rental. Because the house appreciated rather than depreciated, that 10K needs to be put back in as taxable income at ordinary rates (up to a max 25%).
  8. My balance due was supposed to come out on 4/15. It's finally showing on bank account with today as withdrawal date.
  9. I would send the 2020 return in first and wait for refund before sending 2019. During COVID I think expecting IRS to apply 2020 overpayment to 2019 will cause nothing but headaches. Both returns could be in the limbo zone for months and months.
  10. I have two 2019 refunds still outstanding. Luckily, they are both small amounts. At the beginning of season IRS said around 6 million 2019 returns not yet processed.
  11. Is it possible you can just scale back? I'm at a point in life where I don't actually "need" the money. This year has been quite stressful and I admit it's been quite freeing to play the Seinfeld Soup Nazi and tell clients this is their last year. For the clients where there is mutual respect, I'll keep doing returns for several years. The ones that want to be demanding jerks can do so elsewhere.
  12. Actually, the support test doesn't really apply, since payments from state do not count as child providing over 1/2 of their own support. That's what I was thinking, but hadn't found verification of it before I posted. |From Pub 501: Example 2. You provided $3,000 toward your 10-year-old foster child's support for the year. The state government provided $4,000, which is considered support provided by the state, not by the child. See Support provided by the state (welfare, food benefits, housing, etc.) , later. Your foster child didn't provide more than half of her own support for the year.
  13. TP has foster child placed by state in their home from Dec 2019 to July 14, 2020. Am I correct that the money received from state does not count as child providing own support? Since it was over 1/2 year they are entitled to CTC? And also qualifies for add'l 1,100 for recovery rebate?
  14. There has been some crazy stuff with this. Married couple also in their 80's on EIP2 he got it and she didn't. This was back when we could look it up or I wouldn't have believed them!
  15. After I got short with her, she looked again and discovered that she did receive it! Arrggghh!
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