Lion EA

Sorry, that's all I got. I used to get a lot of Code P for excess contributions to fully taxable retirement plans. But yours are Roths, right? Did the principal come from salary reduction? If so, then the full amount would've been part of wages in 2019: P—Excess contributions plus earnings/excess deferrals taxable in 2019.

Code JM or JP? If P, then excess 2019 contribution removed in 2020; therefore taxable in 2019. See Table 1 plus all the explanations and examples. https://www.irs.gov/pub/irs-prior/i1099r--2020.pdf

Yes, I have that checkbox, too. On personal returns, the ratio just tickled at the back of my mind. $30 of foreign credit from thousands of dollars of investments with thousands of dollars w/h from large W-2s meant that whether they received $30 FTC or $19 FTC, it made no dent in their refunds or balances due. This was a new-to-me complex trust last year and made less than $1,000 then. I'll look up if it had any FTC last year. This year it earned over $2,500, so a balance due rears it ugly head. I have one other complex trust with no foreign income; it owns a commercial building. And, a third that might have a FTC but earns a lot and always owes a lot, and -- hopefully -- I've done it right in the past. It will be next up when I can get this one signed and e-filed. Thank you Abby and Margaret for confirming for me how FTC is calculated. I was hoping I was wrong, but I'd gone through the form and instructions before I posted and could see what it was doing and why.

No K-1. Complex trust; nothing distributed; trust pays taxes. About $26 but trustee is complaining! Thank you, Mr. Normal. I may have missed the ratio last year, but trust made much, much less then. In 2020, it made over $2,500 so the FTC would've wiped out all US tax if it could've been used in full. Oh well. Right now, I'd pay $26 to get a return off my desk! Every. Single. Return. has something different this year, has me explaining to clients, has them asking more questions before they'll sign. The trustee's wife complained, "We don't do a thing with it. I'm surprised she's made enough money on it this year to owe taxes since we haven't taken anything out. Want to check and then we can talk about the payment?" So, I wanted confirmation that the trust does NOT get the full credit for ALL foreign taxes paid but only the ration of foreign income to worldwide income times the foreign taxes paid.

OMG!

I only prepare three trusts, and at least one of them has no foreign income. Tonight's trust has, in round numbers... $2,500 income, all dividends and interest $1,000 foreign dividends $50 foreign tax paid I was expecting $50 to be deducted from the tax liability, but it ends up being a ratio of 1000/2500 X 50 = foreign tax credit. The trust doesn't get credit for the full $50 foreign taxes it paid. Is that right? (I know I'm tired and not thinking straight.)

Your software might have 2019 earned income in the 2020 return data entry screens. You probably have to check a box to tell your software to use 2019 earned income.

Are you talking about using 2019 earned income for both EIC and CTC when 2019 earned income is higher than 2020 earned income?

Adoption credit has added benefits when adopting special need children. Also, children will not "age out" of certain benefits. ABLE accounts. I haven't had that situation, but do read up on taxes and special need children.

But, charge the client for that form!!

NY's been too busy voting on marijuana to vote on unemployment.

CCH's Scan & Flow

So, if the loan was not forgiven until 2021 or not yet forgiven, leave it as a loan on the books for 2020 CA biz returns and deduct expenses as usual. If/when the loan is forgiven in 2021, report it on the 2021 return after CA has finalized its guidance, postponing the potential income &/or nondeductible expenses a year.

I think Gail's on to something. This tax season with all that we've gone through now into 6Q2020 it's a wonder we haven't seen a tax office on the 11 pm news with police leading a preparer into a squad car! Maybe that's only because a lot of tax preparation is still virtual. And, this is a virtual safe place, outlet, with people who understand. I'm glad we have this place for our education and for our mental health. Thank you, Judy, for saving us all from what we really want to do right now!

Yep, they show their true colors sometimes, and it's not happy rainbow colors. Out the door is where they belong! Hope they took a lot of your stress with them. And, prayers for your husband and for you and for his whole medical team. Thank you for all you do, Judy, to keep the rest of us functioning during this never-ending tax season with ever-changing tax laws.

And, I often have to use IE (instead of my usual Chrome) for IRS-type sites.

Two bills in committee: https://www.nysenate.gov/legislation/bills/2021/a6584 https://www.nysenate.gov/legislation/bills/2021/s4819 Explain the options to your clients, and let them decide.

(You all know I meant "2021 or beyond" at the end of my post...) Randall has another reason to leave it as a loan on the books and on the tax return.

My TN clients cowering in their storm cellars and my clients in the housing projects of Bridgeport really could use an extra $600 in their refunds. And, my Westport, CT, clients afford their houses on the Sound because they search for every $600 to lower their tax liabilities. If knowing that their brokerage adjusts basis on the purchase end of a wash sale (or does not) helps me help them pay no more tax than they should, then I'm doing my job and earning my fees.

I haven't heard of NY approving any software yet for this issue. (Too busy sampling re their new law?!)

One phone call to ask if the disallowed loss was added to the basis of the stock purchased? Minutes. Yes, you go with the 1099-B for the stocks SOLD if the math works on the 1099-B. I just make a call (only once, unless I see evidence of a brokerage changing its methods) to make sure they are tracking the basis of the PURCHASED stock that I won't see on a 1099-B until it's sold. I do NOT take the time to track it back to the year purchased when its sold. Except for those super-organized, keep-every-slip-of-paper clients who bring me their matched-up purchase and sale confirmations because they're just that detailed oriented or because they're identifying each stock sold (instead of FIFO). Then I randomly compare ONE purchase confirmation to the 1099-B basis for a stock where they've had lots of disallowed wash sales in prior years (you remember those when it's pages of the same stock listed on prior 1099-Bs) to make sure the brokerage adjusted the basis. Seconds to compare one piece of paper to one trade. Less time than the phone call, so this is what I do when the client brings his purchase confirmation that corresponds to a sale. Seconds to satisfy myself that my client is getting the benefit of his prior-year disallowed loss due to timing or due to disposing of his entire holding in that stock. And, not paying tax on more profit than he made. Seconds.

Wouldn't that be a reason NOT to report forgiveness before it actually happens, leave the PPP loans on the books for 2020 when they were NOT forgiven yet? Wait for the actual forgiveness amount in 20201 or beyond?

Add back on Form IT-558 using code A-011. NY has been too busy legalizing marijuana to vote on any tax de-decoupling.

Did she make much acting income in 2020? Not much waitressing during 2020 either. How did she support herself?

The IRS has said they will continue to issue EIP3 as returns are filed until about September.