BulldogTom

36 minutes ago, Lynn EA USTCP in Louisiana said:

reigstration is already closed for this webinar, minutes after receiving the email

Overwhelming demand for knowledge and compliance guidance....

Tom
Longview, TX

On 12/7/2023 at 4:28 PM, Catherine said:

We have the FinCen requirements on our annual document checklist, but for 2023 I'm putting it in the engagement letter, too. As soon as the draft comes out and I can edit it.

I took a different approach.   I am not including it in my engagement letter.   I sent the BOI instructions to each of my affected clients and told them in the email that I could not prepare it and I was letting them know about their requirement as a courtesy.

Not being argumentative, just asking.   By putting it in your engagement letter, are you in a backhanded way telling your clients this is a tax issue?   I did the above because I don't feel it is a tax issue and it is not my responsibility to even notify them of their requirement to comply.   In the same way I don't tell my clients it is their responsibility to file their annual SOS report or their county property tax returns.

Tom
Longview, TX

1 hour ago, Lee B said:

 We created 5 fictitious organizations and applied for tax-exempt status using a simplified application form (Form 1023-EZ) to test its effectiveness. The IRS approved 4 of our applications ─ and included them on a list of organizations that can receive tax deductible."

The approval of 4 fictitious non profits is troubling.

I think you are reading that incorrectly @Lee B.  I think they were testing to see if the system worked properly for taxpayers filing for Tax Exempt status and they got an 80% success rate.   I don't think they were trying to see if the IRS would catch 5 obviously bogus claims.   If that was the case and 80% of the bogus claims for tax exempt status were being approved I would whole-heartedly agree with you.

Tom
Longview, TX

I think you have a good grasp on this.   They need to do a couple things:

#1 DON'T MESS UP THE CURRENT PAYMENT AGREEMENT.  Stay on schedule at all costs.

#2 manage the withholding so that he pays more and she pays little or none.   Then you don't have to worry about innocent spouse

#3 make sure the property that has a lien on it stays out of the marital property.   Those liens can be vague and apply to "all bank accounts"   so a joint account might bring her assets in a joint account under the lien.  Make sure you client knows what the lien covers.

Tom
Longview, TX 

Did they collapse the LLC because there was no longer a partnership?   What form did the company use to report its tax obligations?   

If you file the 568 returns and show it was still a partnership but do not have a federal 1065 to back it up, you have a federal problem as well because CA will share the information with the IRS and the IRS will come looking for 1065s for all those years (penalties for not providing partners K-1s?)

I would do some digging to find out what happened and when with the entity.  Take it slow and make sure you have all the facts before you start filing the old 568 returns.

Tom
Longview, TX

26 minutes ago, Bart said:

"If they are not actually divorced", she cannot file single can she?

If they are not legally separated, why is he paying alimony?  

Tom
Longview, TX

52 minutes ago, Margaret CPA in OH said:

...files single (not MFS as I was told)

If she files single, the whole discussion is moot.    There is no community income if there is no "community".   

Tom
Longview, TX

CA taxes worldwide income of residents.  It taxes income of non-residents earned in the state of CA. 

SS is exempt from tax in CA, so that is not an issue for either one of them.  The schedule CA removes SS income for residents and non-residents alike.

Pensions received by a CA resident are taxable income regardless of the state earned in or paid from.   If you are a resident of CA, your pension is taxable to CA.   Pension income is community income, therefore, your NR OH taxpayer has CA source pension income (50% of what your CA taxpayer received).

Tom
Longview, TX

Your CA resident and OH resident will file MFS in CA (you file the same for CA as you do for Fed in most cases - I don't see that they qualify for any exception).   

CA resident will file a 540, claiming all worldwide income less the 50% of community income. 

OH Resident will file a 540NR, show all worldwide income, and pay tax on the 50% community income.   Adjustments to taxable income will be done on Schedule CA 540 NR.  

Tom
Longview, TX

1 hour ago, TexTaxToo said:

This has nothing to do with the requirements for issuing 1099-NEC, nor with the requirement that credit card processors report ALL credit/debit payments to merchants on a 1099-K.

This is only for third party payment processors (e.g., Paypal, CashApp, Uber, AirBnB, etc), where a third party accepts a payment on behalf of someone.  See the announcement here: https://www.irs.gov/newsroom/irs-announces-delay-in-form-1099-k-reporting-threshold-for-third-party-platform-payments-in-2023-plans-for-a-threshold-of-5000-for-2024-to-phase-in-implementation

Thanks

Tom
Longview, TX

So help me understand this.   

If I pay a vendor for a business expense with a credit card, and it is over $600 but less than $10,000, I have no reporting requirements (because it was paid by CC) and the CC company will not report (because it is under their threshold).   Next year, the same scenario but as long as the transactions total less than $5,000 the transactions don't get reported to the IRS.

Conversely, if a business client pays me on a credit card more than $600 but less than $10,000 in 2023, I will not get a 1099NEC from the client, nor will I get a 1099K from my CC processor.  In 2024 same but under $5,000 fee.

Do I have this right?  You think anyone is going to set their fee at $4,999 in 2024? (not like anyone would game the system to avoid income being reported).

Tom
Longview, TX

I have a new favorite emoji.   I found it on my phone but I don't see it here.   It is an angry face like JohnH posted, but it explodes into about 20 little heads.   I wish I knew how to get it from my phone to here.  Best emoji ever.

Tom
Longview, TX

I have been working with our banks at my day job to create some new accounts.   I was surprised to see the BOI form on their new account application.   Looks like the banks are collecting so the FinCen folks can cross reference to the reporting by the company.   Interesting twist.

Tom
Longview, TX

1 hour ago, Lynn EA USTCP in Louisiana said:

typo - 2923 should be 2023

I don't think I will be doing tax returns in 2923....

Tom
Longview, TX

1 hour ago, Lee B said:

I have used Hiscox for years. Currently paying $367 a year for $250,000 of coverage.

@Lee B  Does that include Cyber coverage?   How is the customer service?   Can you talk to a live person?

Tom
Longview, TX

Is the gain substantial and have you calculated the tax on the gain?   Is it worth it to do the exchange and take on the risk of trying to fit the transaction into the like-kind shoe?  What is the economic reality of the situation going sale vs exchange?

Tom
Longview, TX

I am currently using BiBERK.  E&O plus Cyber is about $450.   Online application is pretty simple.   Not very good customer service.   Hard to get in touch with.   I needed something when I moved to Texas and I grabbed them in a pinch.   I am looking to change.   Not because of price, but because of service.

Tom
Longview, TX

I keep E&O, Cyber and GL insurance for my company.  The E&O and Cyber stayed pretty much the same, but my GL went from $275 to $426.   55%!  Anyone else seeing increases like that?

Tom
Longview, TX

I did the Auburn University's tax seminar in person a couple weeks ago.   I was impressed, and the price was great.   Printing a 650 page book was a workout for my printer, but it was cheaper than buying the book.

Tom
Longview, TX 

Going to be interesting if CA storm victims file on the 16th and get rejected.   Cutting it real close.

Tom
Longview, TX

Setting up a new company and QBO gave me about 150 accounts in the COA.   I only need about 75.   I can't figure out how to delete all the extra accounts.   I know QBO requires some that you can't delete, but I really don't need 5 long term liability accounts.  I also know I can make accounts inactive, but I would prefer to delete.  

Can anyone tell me how to do this?   I know I can do it in desktop as long as there are no transactions posted.

Tom
Longview, TX

Just now, jklcpa said:

See what others say, but I think you can file it. TP signed it before his death with intention that it should be filed. If TP had still been alive, signed it, and dropped it in the mail to you and you just received it, you would file the returns when you have the signed form in your possession.

I am with Judy on this.   You have a wet signature from the client.   That seems good enough for me.

Tom
Longview, TX

1 hour ago, DANRVAN said:

Why are they selling inventory and recognizing income instead of a Type D tax free transfer if ownership is the same?

751 applies to transfers from partnership to partners.  Transfer of corp. assets is an entirely different ball game.

 

They are not asking me....the owner has his reasons.   Thanks for confirming that there is no Hot Asset issue.   Appreciate you.

Tom
Longview, TX

Company X (SMLLC taxed as S Corp) is re-organizing and will be selling inventory to newly created SMLLC Y & Z(taxed as S Corp).   All three entities have the same ownership.  I don't think §751 applies since it is not a partnership.   

Can anyone confirm?

Tom
Longview, TX

2 minutes ago, Gail in Virginia said:

I had not set up either until I saw this thread today. I set up under login.gov in less than 5 minutes.  As long as I don't forget yet another password I should be fine.  

What do they ask you for to set up the Account at Login.gov?

Tom
Longview, TX