Lion EA

I agree that the IRS staff answers incorrectly more often than correctly. The only thing I found on IRS.gov is from 2011: The money received is taxable and should be reported on Form 1040, line 21 as “other income.” https://www.irs.gov/pub/irs-utl/VTA_2011-08_Cash_for_Keys_Program.pdf I remember some changes during Covid. I don't remember specifics or whether any changes continued after Covid. Please post when you find a current answer.

Yes, Tom, SALY

https://www.irs.gov/pub/irs-pdf/f8948.pdf

If our clients would send us all the pages, we'd usually have the information we need. CT requires 50% or more of a fund to be CT-sourced before it's CT tax-free, so I scan the "funds" page if available, but I don't worry if not. (I seldom see more than a couple % attributed to CT.) I just put it in the CT-taxable column. If a client purchased bonds from municipalities and those pages are missing, I tell the client to get me that information. Most of their brokers use mostly bonds from CT municipalities, state public works, etc., so there's a lot of income that can be exempt from CT tax. I warn my clients that inherit investment accounts from mom/dad who lived in NY or FL or other states to talk about the investment choices with their own financial advisors soon, discussing things like risk-tolerance and state-sourced funds and municipal bonds.

My doctor is in a band called DNR. My hubby the retired teacher has a colleague in a band called Old School.

If son graduated May 2024, then he probably still qualifies as a dependent of his parents. Do your Due Diligence re whether he qualifies for the non-refundable AOTC only or also the refundable.

Jim, you're still a decade younger than me, so enjoy it while you can!

University of Illinois Tax School has a farmers' tax seminar each year and might sell the text separately to you. Texas might have similar learning opportunities. State Universities often have "Extensions" that provide education and services to farmers and farm tax preparers (and to anyone really, so if any landowner needs help with what's wrong with their grass/soil or what plants would grow in their area or what's going on with their well water or...).

I had a client who kept receiving letters asking for $0. Undoubtedly due to rounding a few cents registered in the IRS computer, but the letters asked for $0. I told him to not worry about it, that the IRS would figure it out and leave him alone. After 1 more letter asking for $0, I told him to mail them a check for $0 with the payment page from the letter. He did. No more letters!

One general partner who works in the business and one limited partner who does not?

Get the bursar's statement to see what can be done for 2024. And, qualifying expenses, such as books. If the parents made too much money to benefit from the AOTC in prior years, for those years they can choose to NOT claim the college student dependent. The college student still checks that he is able to be claimed by another/does NOT claim his own dependency, but then he CAN claim the nonrefundable part of the AOTC. See if filing some amendments can get some monies back for this family.

You have a 2024 reporting requirement for the $7,000. Have the student get his bursar's statement for 2024 to see exact dates for 2024 transactions. Also, did the student purchase books/supplies/equipment in 2024 that can apply to his $7,000 scholarship/grant?

I've been hearing tax preparers extending S Corp and Partnership returns, efiling Federal only and extending CT and other states, and giving paper files to clients to mail. Extensions seem to be the most popular. CT offers the option of entering the combined biz form and the PTET form on the CT website. I am NOT going to type in a complex biz return online. I have one S Corp client that refuses extensions. Vehemently. And, due to biz travel, wants his returns, including the joint returns that need the state K-1s due to PTET by 2 March!! He's in HI or someplace for biz right now, and I dread emailing him this news.

https://www.irs.gov/businesses/small-businesses-self-employed/information-for-industries-where-tips-are-customary https://www.irs.gov/pub/irs-pdf/p3144.pdf https://www.irs.gov/pub/irs-pdf/i8027.pdf https://www.irs.gov/businesses/small-businesses-self-employed/tip-recordkeeping-and-reporting https://www.irs.gov/businesses/small-businesses-self-employed/fica-tip-credit-for-employers

https://www.irs.gov/pub/irs-pdf/p225.pdf

If he's a NY resident, won't he take credits on his NY return for taxes paid to PA and WV?

I use ProSystem fx Tax, but NOT Practice. Try Chat which answers a lot faster than calling them. Or, if you can put it aside until tomorrow, put in a ticket and you should receive your call or email by tomorrow (maybe). Or, often when you call and the wait times are long, you can request a callback as a specific time of your choosing. See if they have a knowledgebase article on launching the tray. (I have no idea what the tray is!!) CCH does have a ProSystem fx message board for users. I don't use it often, but you could try that.

I was able to stop using my big magnifying glass when I had cataract surgery and had them put in fancy lenses right before Covid. I turn 78 this year, so I'm still a youngster!

If the parents are eligible to claim the child but do NOT claim the child, then the child still is NOT able to claim herself but CAN claim the non-refundable part of AOC. How you enter that in your software, I don't know because I don't use ATX. Someone here will tell you, or contact your tech support.

I thought the tax software sent appropriate returns when required, such as a federal return to a state or a NR state to your resident state to support a credit for taxes paid. That would reduce the number of files you'd have to attach and reduce your attachment KBs.

Yes, read the trust document. (I haven't had a joint trust.)

Considering how broken the IRS is, I'd pay it to avoid time-consuming letters later. If you're e-filing with direct debit, it takes little time now to avoid a possible time-drain later. But, let your client decide.

I've heard preparers say that they run the numbers both ways, 1120 vs 1120H, to see when is better for their client for that year. Apparently, it's a year-by-year elections to file 1120H, confirm that for yourself. (Haven't had an HOA client for years.)

Using the search file option: Using IRS.gov: https://www.irs.gov/government-entities/irc-section-501c4-homeowners-associations https://www.irs.gov/pub/irs-pdf/i1120h.pdf

The 3 out of 5 (different for horses) is a safe harbor. Within that, the IRS would have to prove you're not a biz. Outside the safe harbor, the biz has to prove they're a biz using the IRS factors and other reasonable issues. It's possible a biz is changing to get out of losses or that the losses were due to natural disasters and take time to rebuild or...for more years. We usually can tell when our clients are just dabbling and it's a hobby. I had an artist who worked hard on her art and on her biz, memberships, shows, sales. But over the years, she got busier with her kids and seemed to be treating her art less businesslike. We had a chat about 3 out of 5 and IRS scrutiny, and changed her treatment to a hobby.