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David

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About David

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    ATXaholics Anonymous

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  1. Yes, CB I read your post and that was my initial understanding (see my original post). That strategy results in no net interest deduction since the S Corp interest deduction is offset by my client's interest income reported on his 1040. I was trying to sum up what everyone said hoping that there was a strategy that others know about that I don't know. I guess there is no way a net interest deduction can be taken for this scenario. Thanks.
  2. Thanks, everyone for your help with this. I understand the Schedule E scenario. However, I wasn't sure about the S Corp scenario. So if the loan proceeds are deposited into the S Corp bank account and the loan payments are paid by the S Corp, and interest is deducted by the S Corp, no problem? I thought it would be a problem for the S Corp to make the loan payments since the loan is in the shareholder's name. Thanks.
  3. Client owns several S Corp businesses. He plans to get a HELOC against his house and use the proceeds for a build out for one of his businesses. He wants the business to pay the HELOC payments each month. I can't find anything in my research that would allow the business to deduct the interest on this HELOC. It wouldn't help if he was to "loan" the business the proceeds from his HELOC since the business would deduct interest expense but he would also report interest income on his personal return. Any ideas? Thanks.
  4. S Corp manufacturing business is planning to add solar panels and take the energy tax credit. They heard that they will also be able to include the cost of replacing the roof as long as it is part of the solar panel installation. I can't find anything definite regarding this in my tax research or on the IRS site. Can anyone enlighten me before I get back to the client? Thanks.
  5. Thanks for your help trying to figure this out. In the link you provided it appears that the higher income only comes into play if the parents can't agree. Following is an excerpt from the link: If the person(s) can’t agree on who claims the child as a qualifying child, and more than one person claims tax benefits using the same child, the tiebreaker rule explained below applies. So it still seems to me that the tax rule allows the unmarried parents, who both live with the child, to decide which one will claim the child as well as the other benefits, including the EITC. Am I misreading this? Thanks.
  6. Child and unmarried parents live in same house. The parents have been taking turns claiming the child as a dependent. I prepare the mother's tax return and it is her year to claim the child. She qualifies for the EITC based on her income. I thought if her AGI was lower than the other parent's AGI then she would not be able to claim the EITC. However, I ran across the following on the IRS website regarding unmarried parents: Answer: If they otherwise meet all of the requirements to claim the earned income tax credit (EITC), unmarried parents with a qualifying child may choose which parent will claim the credit. If there are two qualifying children, each parent may claim the credit based on one child. One parent may claim the credit based on both children. If both parents claim the same qualifying child for the EITC, but don't file a joint return together, the IRS will apply tie-breaker rules and treat the child as the qualifying child of the parent with whom the child lives for the longer amount of time in the tax year. If the child lives with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who has the higher adjusted gross income (AGI) for the tax year. If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person who has the highest AGI for the tax year. If a parent can claim the child as a qualifying child but neither parent claims the child, the child is treated as the qualifying child of the person who has the highest AGI, but only if that person's AGI is higher than the AGI of any of the child's parents who can claim the child as a qualifying child. It appears that if one of the unmarried parent qualifies for the EITC then they can choose to have that parent claim the credit. It seems as though they can choose the parent with the lower AGI since the parent with the higher AIG may not qualify. This seems like cheating to me. Also, it appears that the IRS will only apply the highest AGI rule if both parents try to claim the EITC for the same child. It seems as though there is no problem for the parent with the lower AIG to claim the EITC as long as the other parent doesn't also try to claim it for the same child. Am I understanding this correctly? Thanks.
  7. TP covered her whole family through the exchange and received a 1095-A with her name and SSN in Part I. Her S Corp W-2 showed 100% of the premiums as taxable income in box 1. She and her spouse were divorced during 2018. She filed an extension for her 1040 and advised me that her ex reported 50% of the information on Form 1095-A. There was no advance payment of premium tax credit shown on the 1095-A. However, the family qualifies for a premium tax credit. She is claiming both children on her 1040. She only wants to report 50% of the premiums reported on the 1095-A because she doesn't want any red flags with the IRS. I advised her that she will not get the full SE Insurance deduction to offset the amount reported as income in her W-2. She is fine with that. Has anyone dealt with this issue before? Won't the IRS match the 1095-A information to her 1040 since she is the one listed in Part I? Or is it OK for them to split the 1095-A information? I guess I could report the other half of premiums reported on her W-2 as additional amounts paid for health insurance coverage on the SE Health Insurance Worksheet. At least then she will be able to take the full deduction less the PTC. Does anyone see a problem with reporting this way? Thanks.
  8. David

    extensions?

    Thanks everyone for your great input.
  9. David

    extensions?

    Thanks, John. That puts things in perspective for sure.
  10. David

    extensions?

    Wow! How are you guys able to file extensions as you like. I think the same way as you all - extensions are a good way to relieve stress and pressure and extend the work season. A lot of my clients get nervous and don't want extensions. We try to explain to them that they are still in compliance and that's why the IRS allows extensions. When I explain that if they owe they should pay with their extension, they say they don't know if they will owe. Then I have to do an estimate which then takes up more time. I need to know your secret. Thanks.
  11. TP isn't able to get the EIN for the selling business for form 8594. Can't e-file without it. Is the only option to paper file and leave that line blank? Any other ideas? Thanks.
  12. Thanks for your help.
  13. A client bought a 2018 Infiniti QX30 with the engine auto stop start feature and thinks there is a tax credit available for that model. I can't find anything in my tax research, google or the IRS site that lists models available for any vehicle credits. Does anyone know the best way to find this information? Thanks.
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