GraceNY

Taxpayer received a letter from NY state requesting additional information for "XYZ, LLC." Taxpayer has not set up an LLC or any other business. I went online to NY's Department of State and I did see this entity was established. We took care of what we needed to do for NY. Is there any way we can find out if a EIN was issued for this fraudulent business? Taxpayer did not receive any IRS communication. Do you know if IRS still mails an EIN letter even if the person printed the letter online? I'm thinking we pursue identity theft steps with IRS, etc. And, have taxpayer request a PIN for the 2023 tax return filing. Is there any other steps we should take? Thanks in advance for your input. Grace

Seeking input on the following: Taxpayer's spouse abandoned the taxpayer late 2022. They are in the process of filing for a divorce this year. I suggested they file Married Filing Jointly as it is a more favorable filing status. The taxpayer and spouse have been communicating through their attorneys. I put the 2022 return on extension . Last week I received a Certified Return Receipt Requested letter from the estranged spouse stating they were not going to sign the e-file forms because the taxpayer spouse "has significant unreported income that is not reflected on the 2022 1040 tax return and therefore will not be filing MFJ." The taxpayer is the only one with income (2 W-2's & 1099-NEC). One of the W-2's is from a restaurant and it shows Social Security Tips being reported. Would it be unethical of me (conflict of interest) to ask the taxpayer if there is any other income besides the tax documents they provided due to information I received? I do not send an organizer or letter of engagement. However, in my cover letter that goes out with the return, I say "that I have prepared the return based on the information provided to me, please review the return and let me know if any changes need to be made". (BTW the Certified letter came while I was away and the post office was holding my mail. I received it when the post office delivered my mail in bulk. The green card still attached. The last scan according to the tracking # was that it was in transit. Never out for delivery or delivered.) Not suggesting anything unethical, just an FYI. Thanks in advance for your feedback. Grace

Thank you cbslee. It's not flowing to the Schedule D, Line 5. I had to override it. Thank you jklcpa. Yes, the K-1 is marked "final.' And, I marked the K-1 "final' in the ATX K-1 input screen. It's not flowing to Schedule D, Line 5. It's got to be a programming error. I will contact Support. Every year I have some issue with this software. No wonder it takes me so long to prepare a return. Have to check every line of the tax return. Hopefully I won't have to start checking the math! A colleague introduced me to ATX. I think 2004? First year I used the software the educator expense deduction wasn't carrying to NY return. I called her about it. They were not aware of it. Had to amend some of their returns. I know the software is just a tool and it's not a substitute for a professional's knowledge..... Grace

1041 K-1, Box 11 Code "C" (Short term capital loss carryover): $ 5,191. I entered it on the K-1 (1041) in ATX software but it did not flow to the Schedule D, Line 5. Before I override it and e-file, I need to know if I did something wrong or is it an ATX software issue. BTW Interest and Dividends from K-1 flowed correctly to the tax return. Thanks in advance for any feedback. Grace

I never had this happen in the 25 years I have been in business. I just discovered that a client's 2021 federal and state tax return wasn't e-filed back in April. There was a balance due on both and the client did submit the payments with the vouchers. Does anyone know what will happen when the returns get e-filed this week? i.e penalties, interest? Thanks in advance for any input. Grace

RE: NY (1) Client can set up an online account and then go in and cancel the estimates. You can only cancel 1 estimate at a time. OR (2) You can have client sign an EZ-Rep form which should allow you to go into their account. Hope that helps...

I am preparing a part-year DC return. Taxpayer lived in NY for 8 months and had 25k in wages. DC income was a taxable grant from NIH reported on a 1099-G. I know the grant is not considered "earned income" for the purpose of EITC. On the DC part year return, the 25k was a subtraction. However, DC is computing an EITC based on the NY wages of 25k. I don't think that is correct. Would DC give a taxpayer the EITC on out-of-state wages? Thanks in advance for your input. Grace

It's the Form 8949 "Input Sheet."

Perhaps Form 8949, (e) "Expenses not included in proceeds or basis."

Taxpayer's last day of work in NY 08/15/21. Moved to DC on 08/25/21. However, taxpayer rented an apartment in DC starting 07/01/21. That makes a 184 days of maintaining a place of abode in DC. So it looks like a resident return is needed? If a DC resident return is filed, taxpayer gets credit for taxes paid to NY on the same income. NY will have to be filed as Resident as well as taxpayer maintained a place of abode in NY for 237 days (01/01/21 'til 08/25/21). While living in DC, taxpayer worked at NIH in MD and received a 1099-G (box 6, taxable grants). Looks like taxpayer is required to file an MD return? Instructions say if taxpayer had MD source income from sources other than salaries or wages, in this case 1099-G, they are required to file an MD return. Going through all three of these states instructions and feel like I am going in circles. Any input would be helpful. Thanks. Grace

RE: NYS + EIC (not unemployment). This addresses Carolbeck's post. I had the same thing happen. NYS changed EIC and I thought I was wrong until I read HVKen's post and reviewed the instructions. NYS is allowing the use of 2019 income but you had to enter a Special Code on IT-201 Item G. It's Code P3. See Form IT-215 Instructions page 2, left hand side, just above "Worksheet A."

I don't understand what you mean by "delegate his participation to representative(s) or agent(s) Entity # 1 25% ownership and Entity #2 12.5% ownership This is a family operation with his oldest brother being responsible for managing/delegating responsibilities.

Shareholder has an interest in 2 profitable passive S-Corp's, will he qualify for the QBI deduction? (1) Multi- Family Apartment Building K-1 shows Net Rental Real Estate Income of 25k. K-1, Box 17, Code V statement shows the rental income $25k, W-2 Wages 15k and UBIA of qualified property 75K. (2) Commercial Building K-1 shows Net Rental Income of $20k, K-1, Box 17, Code V shows the rental income of 20K and UBIA of qualified property of $2k. When I enter this in ATX, it calculates a QBI deduction. I am concerned about this because (1) the shareholder does not materially participate in this entity, (2) the income is listed as passive and (3) the K-1, box 17, Code V statements say "QBI items subject to shareholder-specific determination." Thanks in advance for your input. Grace

My guess is that when you file the parent's return, the IRS will see that the dependent's SSN was already issued the $1,400 and therefore only give the parent's their $2,800 ($1400 +$1400). I would not send the dependent's $1,400 back. I'd wait and see how it plays out on the parent's return.

Bump. Anyone?