Catherine

Total difference in basis was $157, about 2/3 of which was in the client's favor and the other 1/3 went against him. So all that saved him about $21 in tax, but it was an interesting exercise for me and I won't charge for the 15 minutes or so I spent on it. lol

If they want to file MFJ for next year, tell 'em to take a quickie trip to Vegas instead of CO.

Ain't that the truth! We can't save our clients from themselves, sigh. If only they would learn to ask FIRST. Maybe we should send RitaB to hug them all...

No formal partnership agreement; this is a dad funding his son's business venture. They were told (by me) to get one -- even hand-written but signed by both -- when they came to me for subsequent-year's taxes. Son does have a profit motive, and is operating the business AS a business. But dad was shelling out for everything that first year. (And for lots of things in subsequent years; there has been no profit yet.) Thanks. Will look at UPE rules instead of basis loss.

Have you looked at the 990-T? For taxable portions of the non-profit activities (like selling books hopefully at a profit to raise funds).

But it's not a "non-qualified plan" in that those are usually for highly compensated employees. He took life insurance money, not retirement funds, and bought a contract for future income. By withdrawing funds, he is not using retirement funds early. It's more like a Roth distribution of principal (but not subject to Roth 5-years-in rules). The only penalty should be from the insurance company according to their contracts. In fact only any growth withdrawn should be taxable income; the rest was non-taxable life insurance proceeds.

Yes; I was thinking along the lines of @Gail in Virginia. Non-qualified annuity is NOT a retirement vehicle; it's just a contract "give us money now and we'll give you money later and you hope it's more". Early withdrawals subject to penalty form the insurance company, not the IRS. But there are sometimes exemptions to those penalties. Read the contract.

Clients came to me to represent them in an audit of partnership basis, for the year before I started preparing the partnership return. This partner funds the whole operation (runs a loss every year; *long* story - other partner is his son; that should tell you) and filed the return himself that year but put in no information on capital contributions for/from himself. IRS wants to disallow the loss for lack of basis. I have, from the client, his full year of bank statements showing many checks from his personal account paying partnership expenses. Statements include check images. Will it suffice to bring the dated statement with listed checks and copies only of the pertinent checks? Would it do more good or more harm to bring the full page of check images? Also will be bringing copies of the ledgers of business expenses. Client is an older gentleman who still keeps everything in (pristine!) paper ledgers. Won't bring the ledger book; it has other years' info and I want to keep this limited to the one year in question.

Annuities have some odditites built in. They are a contract between the buyer and the insurance company; read the contract. There may be provisions allowing what might be termed a "partial surrender" for specific needs. Those provisions, if they exist, may be a way out of penalties.

I'll try and look for it tonight. I forget once I get home and the chaos there needs attention.

That gullible -- or that scared of the IRS? If the latter, then the LONG history of over-reach and just plain old nastiness on the part of the IRS is at least as much to blame as gullibility.

Longish wait but more likely you'll talk to someone with a clue. Only if you are looking for an excuse to tear your hair out. Or give a @RitaB style hug to the know-nothing drone who answers, IF you get answered and not cut off.

Yes. Medical payments can be deducted. TTB says (paraphrased) "taxpayers can deduct med exp's paid for an individual who would have been a dependent except that (thee items, #1 being gross income of $4k or more)."

I think this is one of my new favorite phrases!

I have a cartoon somewhere (can't find it now) on "How Tax Software Should Work" that shows a guy dumping all his papers into a big funnel on top of his computer. It's cute.

Step 2b is the most crucial to follow - yet the most tempting to succumb to.

You won that bet, @SaraEA! I will try the weighted average technique with the one thousand-share trade and see how much difference it makes. All the others were tens or hundreds and with a few cents' difference in price it's likely not worth the bother.

Thanks, everybody!

The price changes in the three funds in question moved by pennies each over the two days. I think the biggest price swing was twelve cents per share.

Oy. Client was managing his dad's money in the man's final years. Looking like the end was near, he put in stock trade requests on a Friday after markets closed or early Saturday; he does not recall which. None of the orders were processed until Monday when the markets were next open. BUT - his dad passed on, Saturday night. So are these trades *before* death, as noted by the time of order submission - or are they part of the estate income, as noted by when the sales were actually done? I can see a good argument each way. Thoughts? Even just a pointer on where to go looking because my initial forays into looking this up have not been helpful at all.

That was my thought - taxable income but not technically "tips" as defined by the IRS.

Over the course of a year, roughly $1K. Maybe.

How does one report tip income NOT from employment? Taxpayer was in hairdressing school. School runs a "clinic" where the public can get super-cheap services from students. Some of those clients tipped the student -- but the student was NOT employed by the school. Nor was the student eligible to be self-employed (in school to get the license to make that possible). Form 4137 asks for employer information; does not apply in this case. Line 21? Something else?

From Steven Siegel, in a CCH webinar on estate and trust taxation. "It's tax law - expect exceptions!"

The IRS announcement says: The Internal Revenue Service announced that the “Get an IP PIN” tool has returned to IRS.gov with a stronger authentication process to help protect taxpayers. The Identity Protection Personal Identification Number (IP PIN) is given to taxpayers who are confirmed identity theft victims and to certain taxpayers who opt into the program. The six-digit IP PIN adds an additional layer of protection for the Social Security number. The re-launched tool uses a multi-factor authentication process that will help prevent automated attacks. Taxpayers must verify their identities using a more rigorous Secure Access process that requires them to have immediate access to an email address, account information from a credit card or other loan types and a text-enabled mobile phone. New and returning users must follow the Secure Access steps outlined in Fact Sheet 2016-20, How to Register for Get Transcript Online Using New Authentication Process. The Get Transcript Online tool was the first to use the Secure Access process, and the IRS continues to review its other online applications to determine which ones warrant the stronger verification process. Use of the IP PIN tool is limited to pre-selected taxpayers. Approximately 2.7 million IP PIN holders receive their number through the mail late in the calendar year in advance of the 2017 filing season. Those taxpayers who lose their IP PIN may use the tool to retrieve their number. Taxpayers who may be victims of non-tax related identity theft and who submitted an affidavit to the IRS may opt into the IP PIN program and obtain an IP PIN through the tool. Taxpayers from Florida, Georgia and the District of Columbia also may obtain an IP PIN through the tool as part of a pilot project. End of IRS announcement.