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BulldogTom

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Posts posted by BulldogTom

  1. Along the same lines but slightly different, my client has signed up for Acorns (that app that lets you round up your purchases and invest the change).  And they have like 25 trades of fractional shares of 3 different mutual funds both short and long term and wash sales that don't even add up to $0.50.   What a pain for a $2 net loss on the Schedule D.   Cost them more for my services than they will ever realize from the investments.

    Tom
    Longview, TX

    • Like 4
  2. 6 hours ago, joanmcq said:

    Yes, the CA tax rate, line 36 of the NR, shows as .0208.  I wasn't sure whether to just delete the 3805P or file for a credit to NM for taxes paid to another state. Ended up deleting the 3508P

    I think I would include the 3508P but find one of the exceptions to plug in to eliminate the penalty.  I think I would try to find any exception that is close to the situation to make the penalty go away while still including the form in the return.    

    My guess, and it is only a guess, it the state will see the penalty on the fed return and generate a letter for the CA penalty.  It is easier to respond to a letter with a copy of the filed form and explaining the exception to the penalty than to explain why you did not include a form that explains the tax position taken.

    You do what you think is best - I have never run into this situation before.

    Tom
    Longview, TX

    • Like 1
  3. This is wierd, but I think I know what is happening.  Since the CA 540NR has you recalculate your entire return as if you were a CA resident, calculates the tax, and then takes a percentage of the tax based on the percent of your income from the state, it kinda makes sense that IF the TP was a CA resident, they would have to pay CA the penalty so the NR is calculating it.   

    Since the Income is not CA sourced on the NR, the penalty should not be included.   I am not in front of my software right now, so I can't tell you how to over ride the penalty calculation.   I would definitely not include the penalty in the CA NR return.

    Tom
    Longview, TX

     

    • Like 2
  4. Client is Domiciled in FL.   Was stationed in GA for 2 1/2 years and owned his home in GA from the time he arrived until deployed overseas.   Sold the home when he left.   Cap gain is about 20K.   Excluded under §121 for Fed return.   Is it excluded for GA as well?   I see in the instructions that GA follows fed rules for Cap Gains, but nothing about sale of primary residence by non-resident military.

    Thanks for any help.

    Tom
    Longview, TX

    • Like 1
  5. 23 minutes ago, schirallicpa said:

    I just can't figure out how to make the return work.  Taxpayer is non-resident and has small wage and withholding from MT.  Pulling my hair out.  Things are not filling in.  I feel like I need to override the whole thing.  Yes - I have set up as NR in main info tab and page 1 of the MT return shows NR box ticked.  From there how do I tell it what my NR wages are so that it is flowing thru?

    Did you break out the wages on the W2 input screen on the bottom?

    Tom
    Longview, TX

    • Like 1
  6. 12 minutes ago, Lee B said:

    If it was my client, I would either refer them to someone else or pay an expert to provide detailed guidance.

    I just did a quick internet search and I came to the same conclusion.   ^^^^

    Tom
    Longview, TX

    • Like 1
  7. Love the Berkshire story.   That is why Buffett is Buffett.   On the flip side, I will never take a loan that does not allow pre-payment.   I found this out the hard way on my first home purchase.   I wanted to refinance and I had to pay a pre-payment penalty to the lender.   Never again.

    Tom
    Longview, TX

    • Like 1
  8. 35 minutes ago, Lee B said:

    "Form 1099-K.

    Payments made with a credit card or payment card and certain other types of payments, including third-party network transactions, must be reported on Form 1099-K by the payment settlement entity under section 6050W and are not subject to reporting on Form 1099-NEC."

    Perhaps this exception applies to your situation?

    That is what I am thinking.   I probably worded my question awkwardly.   

    I think QBO as the payment processor should issue the 1099K, which would relieve the payor of the responsibility to produce a 1099NEC for the recipient.   

    Is that how you see it?

    Tom
    Longview, TX

    • Like 1
  9. 8 hours ago, joanmcq said:

     I have 3 more returns that rejected due to not being the latest program version/form version.  But I can't remember how the tech showed me how to update all of the forms in the return.  ... but maybe it'll work with this one? 

    @joanmcqIf you are getting the code 38 reject, go over to the efile page and look at the solution there.   It worked for me.   I don't trust myself to tell you the steps but it was simple to follow.

    Tom
    Longview, TX

    • Like 1
  10. Thank you all for this post.   Had the issue, followed the above and the issue was resolved.   Appreciate this board so much.

    Tom
    Longview, TX

    • Like 2
  11. Sounds like a good client - or like you have decided they are a good client.   

    Back to the original post.   FMV of the items on the date contributed to the partnership is the Basis of the Fixed Assets.   Depreciate under the normal rules for used equipment.   Most conservative approach is to get an appraisal.   If they want to be a little less conservative, use Garage Sale or Craigslist pricing for used items of similar value.   If they insist on using the amounts they say they paid for them (and if you believe them), get them to write a letter to you signed and dated that says this is the value of the property they contributed to the partnership.   

    It does not have to be confrontational, just explain that you are there to protect them from audit risk. and the riskiest way to go is take their word for the basis of the property.

    Tom
    Longview, TX

    • Like 4
  12. Just curious about the 2022 return.   Any Sch C Painting work on that return?   Seems that this guy was already a painter before he started this business.  Was he calling it a hobby, side gig, hustle or some other term that on the street means "I get paid in cash and I don't have to tell anyone".   The part about "paid cash" is I think what has all of us looking at it twice, because cash is so easy to put in your pocket instead of into your bank.

    Tom
    Longview, TX

    • Like 2
  13. 3 hours ago, JohnH said:

    It's very difficult for a person to understand something when they recognize that understanding it is going to cost them money.  

    Oh....I love that.   Is that your own or is it a quote from someone else.  

    I am stealing that line.

    Tom
    Longview, TX

    • Like 5
  14. 1 hour ago, Lee B said:

    Years ago, the IRS had an interactive phone system where I filed my 941s using the keypad on my desk phone🙂

    I remember taking payments to the bank with the voucher.   Then it was the call in to the IRS and we had a "cheat sheet" that told you what you were supposed to enter at each of the prompts.

    Ahhhhhh......the good ol' days

    Tom
    Longview, TX

    • Like 1
    • Haha 3
  15. My approach on rental deposits has always been that the amounts received are income (because the IRS says it is for cash basis taxpayers) and the return of deposits to the tenant at the end of the lease is an expense.   I put it on the other expense section of the Sch E as "refunded deposits".   

    That looks like your second option.

    Tom
    Longview, TX

    • Like 2
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