Nighthawk

A mother has a 30 yr old son living with her all year. He likes those funny cigs, etc. I asked her how much income he had for all of 2007. She said he works for cash only sometimes, and doesn't file any taxes. He meets all tests for qualifying relative for dependency and her for status to be HofH but.....she told me too much. What would you do in this situation?

For the above question I still stand by my answer of absolutely not. If someone came into our office to do their taxes right now that would be my answer. My second question would be to ask if they had a charitable signed form for contributions. This is not a deduction for tuition, but is a donation. If not, I would ask them if they wanted to pursue getting one. If yes, then I would hold up preparation till they could check this out. If they didn't want to pursue this direction, my answer is the same. Then I would discuss future planning what their options could be for next year. Yes, some schools say the tuition is this amount, but you have to maintain donations for this amount or your tuition will be this. Then again, the donations are classified as charitable donations which the taxpayer would receive a statement for at year end. Yes, the school could get in trouble for this, but the person paying tuition will accept the terms to have some type of write off. Yes, it would be a better world if they would call during the year (before tax season) for questions relating to taxes. We offer free phone calls during the year so we have an open door policy with our clients. 99% of the time if we have to draw up a simple letter during the year we also do those free.

Information for anyone else that encounters the K1 Box 14 Corpus issue. Just spoke with the trust administrators in NY. Answer is that is a new requirement by IRS this year. The corpus amount does not affect the individual tax return. It is just the figure they use to do the calculations for the items on the K1. They have had numerous calls on this.

Thanks for the reply. Now I know what it is, but what do I do with it? Is it income or a deduction? And where should it flow to the 1040?

After 30 years of doing taxes, this one has me stumped. K1 Form for Beneficiary's Share of Income, Deductions,etc. Has been going on for at least 10 years. No problem for all these years until now. A new item appeared under Line 14 Other Information Code H - Corpus $3,100 I need help on what this might be? Thanks

Nice short answer Janitor Bob and absolutely correct. Have another banana. If someone came to me, I would suggest that if the client was to cut some tuition costs hopefully there might be a nice grandpa or grandma related since I know quite a few who do that.

Thanks for the input. We usually have 99% efiled, but this looks like a mail in return. Thanks again.

Need opinions on this example. Independent student at college. Student had to declare independent for Stafford eligibility. Student was close enough to eat at parents house. Wages 700.....Interest 20 Tuition Fees 4000.......Stafford loans 9000 for tuition,housing,etc Rent 2800 No federal tax due No MI tax due Prop tax credit for rent paid ??? Should household income include the nontaxable stafford loans? If not included, there is no means to show how rent was paid. Thanks for any opinions.

From past experience and some 1099s we issued, the payer probably withheld backup taxes withheld, but they should be listed on the 1099 too (They could have had an inexperienced person filling out the 1099. I would list the whole 1099 with an explanation, or fax the payer with the taxpayers check figures and ask why? I hope this helps.

Renewed yesterday and the validation code did not work from cust support. No email received yet. Went to myatx and found a validation code specific for me. It worked to install Dec disck. Then did an update and their were no choices it just updated. Later went to check if a form on web is available, and it automatically did an update on all. User since 2000, but not sure about all this yet. I thought I left a msg this morning at 5am but cannot find it. Nice to see some msgs from previous years.