Lion EA

I've had a long day, so don't accept this as correct. I think son takes on dad's basis, just as in any gift. But, that's outside basis. And, does lower of basis or FMV come into play for outside basis? I'm too tired to think about inside basis!

This morning I would've left some school or church in central Appalachia in a van with another adult or college student plus five high school kids in a caravan with more than a dozen vans and meet up Sunday in CT with all 200+ people who just spent a week repairing homes. Appalachia Service Project is a relational ministry with a little home repair on the side! I miss it. My stepdaughter who brought me into ASP years ago with her next generation ASPer, son Everett:

You client doesn't have to support the kids. (Kid can't pay more than half his own support + divorced parents together have to pay more than half.) The kids have to stay with that parent more than half the nights of the calendar/tax year, or that parent has a signed 8332 from the custodial parent. If it's a new client, you'll ask for things that show the kids' address as your client's address: report cards, doctor bill, etc., and ask a lot of questions. Go through the Due Diligence form with them. If you're uncomfortable with any answer, ask more questions. Give your client a list of the documents the IRS will require if your client is audited and ask if he has them (you don't have to see them unless you are still uncertain) or can obtain them. Here's an example for CTC: https://www.irs.gov/pub/irs-pdf/f14815.pdf

And, if your client runs afoul of state law/divorce law, his ex could drag him back to court, he might owe damages to his ex due to breaking the divorce contract. What is it that you/your client needs to know? (It might be a legal issue and not a tax question.)

IRS/federal law trumps state law. The IRS doesn't think about what a state court says. The IRS has their own rules about who's a qualified dependent, who's a custodial parent. Period. That said, if the parents are agreeing, then the custodial parent can sign Form 8332 to allow the non-custodial parent to claim the child. But the custodial parent retains certain benefits, such as HOH.

Here it is 15 days away and I get a new state! Long-time client went to law school at Georgetown and lived in DC for spring and fall semesters, back to his NY apartment for the summer of 2019. (For 2020, graduated and married and is in CT for the time being, so his mailing address on his returns will be CT but did not reside nor work in CT during 2019.) Anything I need to know about a part-year DC return? Or would you file as PY? He was a 2018 resident of NY. Maybe a 2019 NY resident with NR DC? Still anything I should know about a NR DC return? Thanx for your thoughts.

Hey, Burke. I use Chrome but don't know any good training. And, TTB Forum works fine for me today. But, I do know MS had some updates that affected IE and added Edge to my computer. Perhaps such an update changed your IE settings or even replaced IE with Edge, making TTB Forum not work right. If you prefer IE, try poking around your settings in IE and in TTB to see if something changed. Good luck.

Depending on what your client is fussing about, eliminate her middle initial or use M instead of Maria. My clients usually calm down when I tell them the field is only so wide, and that the IRS uses only the first four letters of the last name anyway. My son is Robert F. Franciose III, and his name never fit in the boxes on standardized tests in school.

I've had a couple of clients (over the years, not this year) receive a refund when the return was clearly marked to apply to next year. The first time it happened, I even called Profx to see if something showed on the transmission that was different from what I see on my screen. I remember them both as being on extension and filing in the fall. And, the refunds came slowly. One client swore to me he didn't get a refund, but I pulled his transcript after he got a letter saying he'd underpaid the following year, and the transcript did show funds going back to him the next spring. The other received her refund after we'd already filed the next year. (She called me.) So, both took some time for us to figure out what they really owed and what I needed to carry forward in my software to have the year after the year after accurate.

Your client can hire new employees. He may have employees who choose not to return. He doesn't have to have the same exact employees; but if he does, don''t cut their salaries without a business reason (can't open fully, etc.) Work through the forgiveness application and instructions, even though it might change again. See the safe harbors, such as what percentage drop in FTE &/or salary won't reduce forgiveness, alternate comparison dates, etc. Does your client have other allowable expenses to make up to 40% of the loan? Compare a small drop in forgiveness/loan at 1% for 5 years vs hiring an unnecessary employee.

You do realize there will be at least one more revision of Form 3508. Maybe Form 3508-EZ will stay the same, maybe, unless there's some sort of universal forgiveness for the smaller loans. Is your bank taking forgiveness applications yet? Most are waiting on final final regulations and building their own online application for borrowers to fill out. I've heard banks give dates like mid-July and late-July to accept submissions. Relax. Breathe. Go back to preparing tax returns for pay. Give your clients lists of documentation to gather. Stay well.

Eric Green is.

I haven't had to research that scenario for a client. Don't forget you might have depreciation you can't exclude if your client built (or purchased with the land) a barn, fences, drainage tile, or anything else that could be depreciated on his ranch.

If I'm following which was 2019 vs 2020, I think you're right. I haven't taken numbers through the forgiveness application, yet. I expect more guidance. But, they've pretty much laid out the case for owner-employees.

Oh, your case an owner earns $80,000/year in 2020 but earned $90,000 with his bonus in 2019. Then 8/52 X $80,000 is still his max forgiveness. If his loan was larger, based on 2019, then he has the two choices cbslee said.

His residence acreage will be the area he used for his home and personal use. The business acreage will be the area he used for his ranching activity. He will report two sales.

Isn't it 8/52 of their salary, capped at $100,000/year and limited to 2019? If one owner earns $90,000 annually in 2020 but $80,000 in 2019, then 8/52 X $80,000 is that owner's max forgiveness. (But, I haven't filled out a forgiveness application, yet.)

You don't have to hire anyone new, family or not, for forgiveness. You just have to keep the same number of FTEs within allowable ranges and salaries. If employees choose not to return, just confirm that; or if you can't open up fully (a restaurant allowed only 50% seating, for example), you don't need all your employees for forgiveness. You can employ family, for the loan application or for forgiveness. Just don't go randomly raising owner salaries with PPP funds.

This has all been very helpful. Both of them work, so their tax liability is enough to use up the solar credit in one year. Their system will cost under $29,000, and the kids calculated their 2020 credit at under $7,000. They do have one child and the CTC. He hasn't been at daycare very much this year, but will return by July, so a small CCC. I ran a pro forma return. My challenge now is to help him reduce his w/h so they get more now instead of a huge refund next year. Although, with current interest rates and short-term investment opportunities, maybe it doesn't matter!

Thanx, Deb & JRS. It's my kids, of course. All the new things I have to read up on come from my family freebie returns! But, these kids did some of their own reading and ran some numbers and got multiple bids. They turned down solar at first. But, then they took down a couple of dead trees and thought they'd give it another look now that they have less shade on their roof. Sure enough, recent quotes use fewer solar panels so cost less. They're back considering it seriously. SIL is taking a pay cut for the rest of the year due to Covid-19. They're both working from home due to the virus and also are considering A/C. I'm talking to them Tuesday. Probably help them lower current w/h.

First time running into a solar credit. Quick reading suggests a NON-refundable credit that will take tax liability down to zero but not lower. It can be carried over if not used up. But, client wants to use it up on their 2020 tax return, because they are financing it now and will need to pay it off next spring/summer. I ran a quick pro forma using 2019 software. Refund increases dramatically. Anyone work with the new W-4 yet? How easy is it to calculate a new W-4 that'll give them more take-home pay now to save for the time they have to pay off their solar installation? I'm open to suggestions on helping them with tax planning. And, I'm open to leads on reading more about a solar credit.

This changes almost daily, but following the flow of the forgiveness application, it appears that the EIDL grant gets folded into the PPP forgiveness and turns into a 1% loan for 2 or 5 years, maybe?! Well, "this" doesn't change almost daily, but the PPP and the forgiveness application and the instructions and the interim final regulations and...

Remember that the income tax-free housing allowance is the lessor of the three detailed in earlier posts. You should compare the three to make sure you're using the right amount. Actually, if ATX's worksheet follows those in the IRS's directions and you make use of the ATX worksheet, you should be fine. But you do have to know the Fair Rental Value (something like a letter from a local realtor on her letterhead) and the actual expenses (add up your client's receipts) to know for sure which amount to use.

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There should not be a schedule C if the only clergy income was W-2 wages plus the housing allowance. The prior tax preparer may have schedule C as some sort of template or as a way to flow the HA to Sch SE depending on her software or even due to some actual income such as honoraria. Or, she may've been doing it wrong. Clergy taxes are a specialty that I've not tried. A different beast. I think of clergy taxes as kinda a backwards statutory employee, and I don't specialize in those either. But, you could have yourself a long-time client if you prepare her returns correctly. Get the resources cited above, especially any books by those three authors; take webinars; get the resources available from your client's national church. Find a mentor to point you in the right direction; it'll be worthwhile to pay for outside expertise if you gain a long-time client. If your mentor uses your software, that's even better, because some of your questions are how to do it in your software and not just tax law questions. A few tips on how to enter data and then a review at the end by an experience clergy tax preparer can give you a new client and a new niche. See what you can find for your client's church. Here's a brief page from the Church Pension Fund of the Episcopal Church that gives an overview plus a couple of publications, one specific to the Episcopal Church: https://www.cpg.org/active-clergy/learning/finance/taxes/clergy-taxes/