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ILLMAS

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Everything posted by ILLMAS

  1. 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.
  2. 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
  3. 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
  4. 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.
  5. For simplicity, let's say it's from a personal injury.
  6. 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
  7. I hate when that happens.
  8. 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?
  9. ILLMAS

    verifying ID

    One of my client already received their refund without the verification.
  10. Just make sure you get a good retainer.
  11. New client created a corporation back in 2014, he is finally ready to start filing and I was wondering if I can make an S-Corp election starting back in 2015? 2015 will be the first year I will be preparing. Thanks
  12. ILLMAS

    verifying ID

    I tried the line on behalf of one of my clients, unfortunately that procedure is only handled by one department, to call the number on the letter.
  13. I have client that issued a 1099 to an S-Corp to a vendor, the vendor preparer entered the withholdings on line 23a of the 1120S, what is the proper line on entering the backup withholdings on a 1120S (a first for me)? Thanks
  14. ILLMAS

    verifying ID

    Call the number on the notice and you will be relieved to find out there is no limit of time, I wonder why your client hasn't told you that.
  15. Help, TP is a resident of IN, but goes to school and works in OH (non-resident), how can I get the tax paid to OH to flow into IN (or credited)? Thanks
  16. I don't dabble in bitcoins but this article came out yesterday: https://www.bbc.com/news/world-latin-america-57398274 I could see business reporting more income and the government benefiting from it, think of the era before 1099-K's. Today a business will get a letter, please explain to us why your reported income is less than the 1099-K....
  17. ILLMAS

    Venmo

    And yet people think the actor Rebel Wilson is funny As far as I know Venmo and other cash apps are untraceable and like bitcoins, give it some time and the IRS would get to it.
  18. ILLMAS

    Venmo

    Youtube the following video made by a CPA: The Problem With Venmo And Your Taxes
  19. I have a client that would like to file their 2020 Sch C jointly (husband and wife business), do I have to split the amounts and report on each on a Sch-C or do I have to click on a box on ATX? Thanks
  20. ^^ Same thing happened to one of my clients, the payroll company transposed the daughters middle two numbers, the IRS sent a letter to the real SS# which in turned called my client and left a threating voicemail. My client asked me to call the lady and she was accusing my clients daughter of fraud, identity theft and the that local authorities were notified etc... that we were going hear from her lawyer, once we got to the bottom of it, the payroll company corrected the W-2 and lady was happy it was just an error and not identify theft.
  21. Super weird, but how was it traced back to him if the SS# used doesn't even belong to him?
  22. “Hispanic illegal with no tax ID of any kind who of course files no taxes likely working for cash.” I would be more careful, your clients daughter might see this a racial stereotype.
  23. ILLMAS

    Form 1139

    Thanks, one more question, do I have to sum up the decrease in tax per page and put the amount on line 29?
  24. ILLMAS

    Form 1139

    Does anyone here have guidance on filing out the form 1139 for a 5 year carryback? The current form only has columns for three years and I cannot seem to find an example. Thanks
  25. I started with Gleim, the review materials are fine, I just thought the chapter and exam questions were confusing and I was bombing every exam, I joined the Facebook EA exam group and someone that was having the same issue as me suggested Passkey. Unfortunately Passkey was not online back when I used it and I had to buy the exam question book separately for each section, my confidence level went up after I started acing (everything is in paper, so you need grade yourself ) every single exam. And as I mentioned before, the EA exam questions are identical to Passkey.
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