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Taxpayer's 13 year old son has ADHD severe learning disability. He attends regular classes, but also has special classes to help with his ADHD. Anyone have experience on this? Specific qualifications and documentation?

Thanks

7 hours ago, Corduroy Frog said:

I have been with Drake for years and years, but a couple years ago, Phil Drake cashed in his chips and sold the business.   Since then, there have been changes, most prodigious change is a whopping price increase.

A recent post from another member advised simply to cover software increases with our fee structure next year,  e. g. changing to an unknown product is risky.  Good advice, but I am going to look around if their are other recommendations.

I will need invidual returns, all entity returns, and all state returns that work.  Years ago I had TaxSlayer, which had excellent, excellent customer services, but was weak on state returns once you left SCarolina and Georgia.  If there is nothing better to look at, I might be best advised to take the gentleman's advise - don't risk changing and build the increase into next year's fee structure.

 

If price is your concern you might want to take a look at Sigma Tax Pro. They are a reseller of Drake as well as other major tax software providers. Current pricing for Drake for 2024 is $999. You may want to look at postings under the Drake Forum for more comments.

Taxpayer called that the IRS had shorted his 2023 refund by $1620 (direct deposit) and was wondering why. No correspondence from the IRS.  Looking at his return he had a LT capital loss of $13,500 which of course was limited to $3000 as shown on the return.  Looks like they adjusted his refund calculated $13,500 at his effective tax rate of 12% = $1620. Does not make sense. If they were disallowing the loss then should have been $3000 at 12% = $360. Seems very strange. Am I missing something?

Thanks Lynn and Margaret. Sounds very interesting.  I will certainly checked them out.

I have been using Drake Portals for several years and it has worked fine for my needs. However, I am considering moving to a different tax software provider and looking for alternatives for secure sharing of tax data with clients. Any suggestions would be appreciated. I have a small tax practice so cost effectiveness, ease of use and of course security is important.

22 hours ago, mcbreck said:

I buy via Sigma Tax, $999 for the last 2 years and the same next year.

Just took a look at their site and the offerings I see range from $295 to $695. Just curious what are you getting for $999? 

Client got married in 2023 and filed joint return with new spouse. Fed refunded shorted by $25---processing fee?? Spouse made quarterly payments electronically under her SSN. All payments cleared the bank for the amount submitted. IRS transcript matched the return as filed showing refund $969 but only $944 was directly deposited in their bank. No correspondence from IRS. No outstanding balances on prior years accounts.  What gives??

Spouses CO estimated payments also sent electronically under her SSN was refunded to her by check with cover letter stating "the direct deposit refund was converted to the enclosed paper check per our fraud prevention measurers". However, the refund requested per the return was $2295 and the refund check was only $407, the amount of the estimated tax payments. Assume the balance of the refund will eventually get direct deposited??

Have not seen the issues before.  Any other ideas?

Complex trust document allows trustee the discretion to pay corpus (principal) out of the trust for the sole beneficiary if he deems it necessary to meet her support and maintenance. If there are capital gains from the sale of investment assets in the trust can the trustee decide to pay out only a portion of those gains to the beneficiary and have part of the gains remained and taxed in the trust if she only needs a portion of the gains to meet her support and maintenance or is it an all or nothing situation?

No. Just farm land.

Correction: This was a revocable trust.  See below:

Got confirmation that no gift tax return or estate tax return was filed in 1982. The wording in the trust is as follows:

Mr. X (father) as "settlor of this trust, hereby declares that from after the date hereof he shall hold and administer as "Trustee" the property described in Schedule A (farm ground ect.) and any other property which may be added to the trust as follows:

FISRT: As long as Settlor is acting as Trustee, he shall have power to withdraw any part or all of the net income and principal of the trust.

I would take that to mean he could have pulled the farm ground out any time he wanted as part of the principal. So until he died he in effect had control over the assets in the trust. Would need to run this by the attorney to confirm.
Anyone have other thoughts?

Farm land from father was put in irrevocable complex trust in 1982 with distributable income going to him and his wife as beneficiaries; capital gains is taxed in the trust. They continued to operated the farm until he died in 2002. Farm continues to operate under the trust with DNI going to widow and capital gain taxed in the trust. Trust sold part of the farm land in 2023. My take is the there is a step-up in basis for the FMV of the land when father died in 2002. Agree??

Thanks Lion I did not realize that!

For 2023 client had $227 FTC but was not needed as tax was computed using Capital gains rate which was zero. Regular tax per tax table was $1800. Drake did not show any carryover of FTC. This does appear to be correct. Am I wrong on this

Thanks for the confirmation. These situations always confuse me.

Single taxpayer is sole support for live in girl friend (not related) and her 13 year old son. Girl friend has no income. She and her son lived with the taxpayer all year. Father of the 13 year old is incarcerated. Can taxpayer claim $500 credit for both the girl friend and her son?  

Taxpayer also has an adopted daughter age 3 who he fully supports and lives with him all year. So HOH status?

Clarification: the parents have been appointed by the court as personal representatives.

Client's son (single) retired from the military in June 2023 and passed away in July 2023 suffering a fall while helping a friend do roof repair.  The parents have power of attorney to handle the son's affairs.  They have been unable to get the son's military W-2 as it is only available electronically and they do not have access. They have tried numerous military agencies, but no luck. They are now contacting their US Congressman for help. Can I get Power of Attorney to access the son's records with the IRS through them? Never run into this situation before.  Any suggestions? 

That was my thought as well but had not run into this before.  Just wanted to get someone else's input to confirm. I was only concerned that in Drake that is not on their list, just had to use Other as relationship.

Client has been Foster parent for the same 2 children for the past 5 years. In 2023 the legal relationship has been changed to guardianship. My understanding is that this is a more permanent status than temporary care under fostering. Did not see this relationship specially listed in CTC rules. Client meets are of the other requirements so any issue with taking CTC for 2023?

TexTaxToo

Thanks for the clarification. That makes sense.

Client received 2 1099-Q forms for the same college student from of 2 different 529 Bright Start accounts.  One issued under the father's SSN and one under the son's SSN. The father is custodian on both accounts. FYI, the second account was originally created by his sister-in-law many years ago. After she was divorced the funds were transferred to account under his SSN. When calculating the AQEE and any earnings that are taxable and subject to 10% penalty do you use the full AQEE for each calculation or split between the two? Same question for the amount of AOC. Can you split the amount of AOC? or do you have to take the full amount of expense used for each calculation? I have never run into this situation before. Would appreciate feedback from others on the board. 

21 hours ago, DANRVAN said:

It is still not clear.  So there were additional unpaid taxes after the sale?  And brother A paid them?

Were the legal fees incurred by the brothers?

Brother A had always paid his share of the taxes each year.  The other brothers did not. As part of the escrow settlement their share of the taxes was credited back to A when the funds were dispersed. There were substantial legal fees as show on the spreadsheet.

22 hours ago, DANRVAN said:

 

So there was cash paid above what was owed to the county for taxes and legal fees.

How much did brother A actually receive from the court ordered sale?

i have attached my summary of these transactions to clarify. The results of the partition sale I think are correct but I am not sure about the presentation on the sale to the unrelated party in Nov. Please offer your thoughts. 

TAX CALCULATION Sale of Property 11102023.xlsx

4 minutes ago, DANRVAN said:

 

So there was cash paid above what was owed to the county for taxes and legal fees.

How much did brother A actually receive from the court ordered sale?

After the tax settlement from his brothers his share was $34,731 less $6636 for attorney fees a net of $28,095. 

1 hour ago, DANRVAN said:

So was the county sale to cover back taxes owed by the two other brothers and related legal expenses of the county?

If older brother did not owe anything to the county, then it sounds like he bought out brothers share by paying off their debt.

That would change my answer from previous post.

Let me clarify. The total back taxes of $8398 was owed  by brothers B and C. Brother A had paid his share each year. I ignored the tax payment adjustment between the brothers but reduced each brother's share of the escrow settlement by the attorney fees that were charged as part of the court order disbursement. Was this not the correct way to calculate each brother's loss?