BulldogTom

So I had an issue with a client that I needed to talk with IRS about. Called the PPL expecting a 20-30 minute wait. I was shocked at how quick it was. The agent was on the line before I had my paperwork out of the file. Issue resolved in 10 minutes. I need to get a lottery ticket tonight. Tom Longview, TX

@Catherine @Abby Normal @G2R The three of you should get together and put on a seminar. "What the hell happened, how the law tax law applies, and how to enter the damn thing in ATX". I would attend if it qualified for CPE. If you held it in my hometown I would put on a BBQ dinner for you at no charge. Tom Longview, TX

It is common for an HOA to take out a loan in the name of the HOA for a capital project and pay the loan with the special assessments from the homeowners (normally the special assessment is pledged to the lender and restricted to be used only for the loan servicing). The payment should be treated in the same manner as any other HOA fee unless there is a direct correlation to capital improvements to the homeowner's unit. Tom Longview, TX

It seems like ATX has a strategy to bug us during the last 2 weeks of the tax season. Tom Longview, TX

Form 3115 is the correct way to do it.....but I would just add the capital improvements in 2023, sell the rental and be done with it. I know that is not how it "should" be done, but the gain remains the same. What changes is the amount of depreciation recaptured, but since it was not deducted against ordinary income there is no harm, so no foul. If audited, the IRS should recognize immediately that there is no tax to be harvested. But if you want a higher fee, do it via the 3115. Tom Longview, TX

I just had this conversation with a client yesterday. I question if they understand the MLPs they are in and what a 1256 Straddle is and why that needs a separate form and yes, I do have to charge you for each K-1 and yes the K-1 shows a loss as well as the 1099B. I have been with this client for a long time. They at the beginning of their retirement and really scared that they will not have enough in the retirement piggy bank to live out the rest of their lives. It is the first time I have spoken out about the investments they are in - it used to be a lot simpler (4-5 mutual funds and a couple of stocks). This year the broker churned their investments to the tune of 44 trades and 2 K-1s for MLPs that were held for less than 60 days. I could not hold my tongue this time. Tom Longview, TX

That was my thought. Never done a Solo 401K so watching this thread to see how to record it in ATX. I have my popcorn out ..... Tom Longview, TX

Same Boat. I am still in good shape on my desktop running Win10. Still can open 2 years of ATX if I am only looking at one return and working on the other. But I have had this desktop for about 5 years and it has served its purpose. Time to get my next 5 year investment. Anyone in Texas who builds computers? Otherwise I think I am going to do Dell again, but I hate all the extra programs that Dell loads on their machines. Tom Longview, TX

So we can use the school estimate for living expenses as opposed to actual costs when looking at a distribution from a 529 plan to see if it was used for living expenses when at school (like a safe harbor) ? I had not heard that. Tom Longview, TX

Bloomberg article today about the status of the bill. Still very iffy to pass or even come to a vote. https://www.msn.com/en-us/news/politics/bipartisan-78-billion-tax-deal-hits-gop-roadblock-in-us-senate/ar-BB1l5LVE?ocid=hpmsn&cvid=4aec1985a28f47e68dda2a10d5257964&ei=41 You can search it on MSN if you don't want to click the link. Tom Longview, TX

I think that the amount on the form 3922 will be the basis if/when the client sells the stock. It is probably restricted stock or not publicly traded so they may only have limited opportunities to sell. I have a client who did not keep that form, and it was a long conversation with her trying to figure out when she acquired the stock and what the basis was. Tom Longview, TX

There is a company I know who has all 1099 outside sales staff. In light of the new Biden Admin DOL ruling, they are looking to convert them all to W2 employees with full benefits, but only pay them straight commission on their sales. Is this proper? Seems to me there are wage and hour issues with this approach, but sometimes salesmen get special rules. I looked a the rules for statutory employees and those rules do not seem to fit. Anyone have experience with Commissioned Salesmen? Thanks Tom Longview, TX

@Abby Normal HMMMMM..... Can a Passive Activity be a vehicle from which you give charitable gifts? Rental is passive by IRS definition. I don't see a place on the Sch E for charitable contributions. Even if you could give "rent" to a charity, it would have to be an organization and not for the benefit of a designated person, so I am having a hard time coming back to any way this scheme gets deducted on residential rental property other than gifting the entire property at FMV to a legitimate charity. Am I missing something? Tom Longview, TX

This has always been my understanding. No nights slept in the house (whether on the couch or the bed) for the last six months. Not even 1 bootie call. Tom Longview, TX

Sorry for the long post.... Taxpayer formed an LLC in 2021. Came to me in 2022 for their first tax return. No election was made for how to tax (would have defaulted to a SP). Filed a late election to be a corporation and filed the 1120 timely for 2021 showing a loss. In 2023, April 1st or so, they come back to me with a total QBO mess of their books. I can't get the information from them in time to file by due date. Tried to file an extension through ATX, but the IRS rejected. They had not processed the 2553 and so they did not show the LLC as a corp (the 2021 1120 went through efile). So I send the Taxpayer the 7004 and the the voucher to pay the estimated tax with the extension. Certified return receipt. They send a check and the extension form to the IRS on 4/17/2023. In Sept 2023 we file the 2022 tax return. In October 2023, the IRS sends the taxpayers a check returning the extension payment. Taxpayers go online and make the payment the day they receive the check from the IRS. Every bit of the above is documented via email, receipts, software reject errors, etc. Today, taxpayer gets a big fat bill from the IRS for failure to file timely, failure to pay penalties, failure to pay estimated taxes penalty and Interest. I am getting the 2848 right now and will see if I can get a reasonable person on the PPL and get abated for reasonable cause. One of the requirements for First Time Abatement is 3 years of no issues. The return in question was the second one for the company. Year three just went out a couple weeks ago. Can my client get first time abatement in this circumstance? Tom Longview, TX

Cool. Could you ask it how to explain Passive Activity Losses to my client? Tom Longview, TX

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

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

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

Bumping up. Is this legislation even coming to a vote in the Senate? Was it part of the spending package that was rushed through the house last night? Tom Longview, TX

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

I do them at my current year rates. If I am doing prior year returns it is normally for a new client, and I want them for the long haul, not just this engagement. Tom Longview, TX

Did you break out the wages on the W2 input screen on the bottom? Tom Longview, TX

I just did a quick internet search and I came to the same conclusion. ^^^^ Tom Longview, TX

How do you put a business that you run into a 401K? I am pretty sure that is a prohibited transaction....or is it? Tom Longview, TX