Jump to content
ATX Community

ILLMAS

Donors
  • Posts

    3,551
  • Joined

  • Last visited

  • Days Won

    36

1 Follower

Profile Information

  • State
    IL

Recent Profile Visitors

12,971 profile views
  1. That was just a sample letter I found online, however it's the exact letter my client received for 2020, since it's considered a government job there is no social security but there is Medicare, and the excludable amount is being taxed for for Medicare. I will be around your area next week, taking a brief vacation to Vegas.
  2. Please see link for an exact copy of the letter (not my clients): https://dqjghx1vau0u.cloudfront.net/uploads/assets/30690/original.pdf?1454507714
  3. Per letter received to be attached to tax return: The amount identified below as EXCLUDABLE COMPENSATION is in lieu of workmans compensation and is excludable from income as per IRS Technical Advice Memorandum TR 32-153-91. The form then shows the gross amount of W-2 wages he received while injured, which is included in box 1 of the W-2; it then shows the amount that should be deducted as excludable.
  4. How does one report excludable compensation in ATX? Thanks
  5. Update, I was reviewing the paper copy of the return I kept to compare against ATX to make sure I didn't manually remove the $10,200, like magic the return now has the addback of UCE, I prepared the return close to the May 17 deadline.
  6. My client received a notice from the state adding back the exclusion, it turns their state opted out since day one and I did not or ATX catch it. There are no penalties or interest charged so that is a good thing, I am in IL and I only prepare 2-3 out of state returns so if you prepare out of state returns and the TP had UC, I would check.
  7. I will be preparing my first gift tax, in ATX do I have to prepare the return separately from the 1040 or do they have to be linked? I don’t see any tax due from the gift. thanks
  8. Sounds like the son gave the funds to his parents who have owned those investments and their income for the last 15 years, and paid taxes on that income. Yes and parent benefited from capital gains and losses over the years. If the parents continued along that route, they would file a 2020 Form 709 to gift the account to their son. Agree. I don't think the past was handled correctly. But all you can do is report what they did in 2020. Well, and tell the family what should've happened for the last 15 years. Agree, what they did was not necessary. Are these potential new clients for you? Do you suspect they've misreported other things, also? If so, you might want to decline the engagement. New client, I don't think anything was being misreported in prior years, just the handling of the brokerage account. Tell them to contact you BEFORE making any financial moves from now on! Thanks
  9. The son who received the original funds was NOT a minor at that time? Correct, young adult 19-20 of age. Did he give the funds to his parents? From what I understand, the money was not given to the parent as a gift, they were just holding on to the money for the son. Did he file a gift tax return? I don't believe so. Or, did the parents hold them in some kind of custodial account for him? From looking at the statements, I am going to say no custodial account was open, just a separate account was opened under the parent name. I think you have to establish the legal ownership of that account before you can determine how to report that account AND how to report its transfer. Based on the parent, the judgement amount was held under the sons personal bank account for a couple of months, then it was moved to the brokerage account but the account was established under the parents name, the funds were never touched until 2020. And as I mentioned before any gain/losses have been reported for the last 15yrs on the parent tax return. Thanks for the help.
  10. For simplicity, let's say it's from a personal injury.
  11. Scenario TP son (was not a minor at that time) was awarded money from a judgment, TP opened a separate brokerage account under their name and put the son's money in that account, for the past 15+ years the TP has been reporting any gains or losses on both accounts. Fast forward to 2020, son wanted to buy a car and asked for control of their money, TP's banker transferred the investment account to a new account under the sons name, my question would be, how do you account for this situation or there is no need to do so? And is it really considered a gift and needs to be filed on Form 709 or 1041? Thanks
  12. New client mailed (registered) their 2019/2020 1099s by the due date for each year, I called the IRS and was told they have no record of receiving the 2019 and there is a high probability the 2020 have not been processed yet (IRS is backed up….). I offered to recreate and submit them electronically, what are the chances the IRS would duplicate them once they process the paper files?
  13. ILLMAS

    verifying ID

    One of my client already received their refund without the verification.
×
×
  • Create New...