Lion EA

Issue Number: IR-2017-61 Inside This Issue Winter Storm Extension: Many Businesses Have Extra Time to Request A Six-Month Extension WASHINGTON — The Internal Revenue Service today granted many businesses affected by this week’s severe winter storm additional time to request a six-month extension to file their 2016 federal income tax returns. The IRS is providing this relief to victims and tax professionals affected by this week’s storm (known as Winter Storm Stella) that hit portions of the Northeast and Mid-Atlantic. Business taxpayers who are unable to file their tax return by today’s due date (March 15, 2017) can request an automatic extension by filing Form 7004, available on IRS.gov, on or before March 20, 2017. Form 7004 provides a six-month extension for returns filed by partnerships (Forms 1065 and 1065B) and S corporations (Forms 1120S). Eligible taxpayers taking advantage of this relief should write “Winter Storm Stella” on their Form 7004 extension request (if filing Form 7004 by paper). As always, the fastest and easiest way to get an extension is to file this form electronically. The IRS will continue to monitor conditions and provide additional relief if circumstances warrant.

Lisa Ihm is a good source for 1099-C information, and the preceding 1099-A: http://www.lisaihm.com/Contact_Us.html

And, the $14,000 per person includes everything given in that calendar year, such as holiday gifts.

I've had only one, and it was years ago. But, I see these questions more and more on message boards, so it must be getting more common. So, I'm trying to pay attention!

You have trained them well.

Is she renting a room in his house, half his house, what? Or, is she his girlfriend who moved in with him and is sharing expenses? I'm sure there's a joke in there someplace about personal use, but I won't go there.

Were they "open for business"? If not, organizational costs and start-up costs to be amortized, right?

Is the 1099-A for the abandonment of the building? So, like a sale? With the forgiven debt to come later on 1099-C?

There is no age test for a permanently disabled child. If the other tests are met, the child will be a QC.

If it's the final return, final K-1s, then loss passes through to beneficiaries. I would take a loss if the executor has documentation: DOD valuation, comps at time of sale, not to a related party, and it seemed reasonable. If it was a $2.38 mil house that sold for a loss of $23,800 so out of state benes don't have to travel to look after it, sure. If it was a $100,000 house, no. That said, you'll have to find your own comfort level inside that range! And, if I'm taking the loss (even if I'm not taking the loss) I'd have to look into handling the RE tax refund. Seems like if it was an estate deduction, it would now be estate income. Or, netted if same year. Or, was it deducted while owner was still alive and refunded after death? As I get older and all my clients getting older, I need to learn about estates. But, not today while I'm in a panic over partnerships and S-corporations! And, clients are wanting their returns TODAY before the blizzard.

Lower of cost or FMV at donation. Different rules for appreciated property. And, maybe for inventory; but it doesn't sound like this was inventory in the hands of your client,.

I'm so very sorry. Allow yourself to grieve.

I know! They were told that only two of them qualified for Medicaid and for Rob to go to marketplace for a couple months until he qualified. WTF? And, then the marketplace accepted him for January. But, Medicaid still said No, so marketplace accepted him for February and March. Then Medicaid said they would start Rob before the end of April, to not worry as his gap would be less than three months, so he could drop the marketplace coverage during March, which he did. Yeah, less than three months, retroactive back to 1 January! That didn't show up in any of the rejection correspondence. Oh well, it was not alot, and they get their tax prep free -- partnership and join returns, NY and PA. Thankx, Jack and Ladies.

This just keeps getting better. Now DIL found her Form 1095-B online covering all three of them for all 12 months. But, I still have the two Forms 1095-A for the husband covering him via the marketplace for three months with APTC. Yuck!

Yes, several, due to change in family size, five in all if I remember correctly, from both the starting insurance company and then medicaid but two different starting dates in 2015 for three different family members due to different eligibility dates. She's a pretty good researcher but says she's not receiving 1095s from Medicaid this year. I just told her to check again.

I was afraid of that. But, the forms show only three months for one person.

I will check the box. After all, they are a freebie! But, I think they received Forms 1095-A last year, about five forms altogether as she became pregnant and their family size changed and little Miss Avery was added resulting in changes in March for one and the second week in October for the other two. And, I misspoke above, my son's forms are both 1095-A so I have three months of APTC. Now do I have to enter them? Still check the box?

I have almost none of these with Medicaid, and it's always the freebies that get me. My son has two Forms 1095-B for January, and then February-March. Then he was on Medicaid for April through December. His wife and daughter were on Medicaid all 2016. How do I enter that on their MFJ return? If I put in the 1095s, it looks like he didn't have insurance for nine months. Do I check the box AND enter 1095s? Daughter said Medicaid did not send 1095s. True? What do I need to know?

Does she pay motor vehicle tax on it? Or, real estate tax on it. Is it anchored? Or, do the renters move it &/or travel in it? Does your client drive it to the renters. Or do the renters go to the RV's permanent location?

I haven't had to get into it, so few marketplace clients, and all refunds, but something is in the back of my mind from the inception of Obamacare. Does the IRS have the authority to collect the non-coverage penalty from the client OTHER than from reducing his refund? Or, am I thinking about the APTC payback? Or, just sleep deprived? Seems like, if the client owes, we can prepare a complete and accurate return and he can choose NOT to pay the penalty portion of his balance due with no consequences to him. And, we gave him full disclosure. Is any of that true? I do have a marketplace client coming in this month, but he was a refund last year and had all months in 2015 so hopefully was covered all of 2016. And, I have a couple of clients who come in late each season who did change jobs and might have had a gap in coverage....

Nice explanation, Catherine.

I give my clients everything. That said, I just received the 2015 TT return from my new son-in-law so I can prepare their 2016 MFJ return. For a W-2 and 1099-INT, it's 80 pages.

That's just good parenting, Catherine and Pacun. Personal family expenses, incentives, gifts. Years ago my son did some counselor-in-training work with his former summer camp, having been told no tax documents. A 1099-MISC showed up. We opened a Roth IRA for him immediately. Years later, he's made use of it as they work on the bakery, Hancock NY: http://www.thebakeryhancockny.com/online_orders/default.html Order his wife's macaroons; they travel well.

If your client is organizing as an LLC, then after organizing the LLC he just files the S election to be taxed as an S-corporation. You get to skip one form, because he's already an entity in his state. I too don't understand why lawyers suggest an LLC taxed as an S-corporation and not just an S-corporation from the beginning. Some states, such as CA, have high LLC fees; so sometimes starting as an S-corp can save money. By the way, starting as an S-corp or going from a sole proprietor to an S-corp does require incorporating and then electing S status, two forms.

Not the question you asked, but have the parents check on working requirements for minors before they put their kids on payroll. In CT, kids get their working papers from their high school counselor. Different ages for different occupations, but I think 16 for office work, older for restaurants, labor, more accident-prone jobs.