artp

Taxpayer, married 2 children. Wife had family coverage through her employer Jan-Jun. Family moved in July when husband got new job-no medical coverage. Wife did not work after June 2017; stayed home to care for children. H&W got coverage thru Market Place Aug-Dec. Application for coverage to include children was re-routed to MO Medicaid. After 4 month delay they only gave taxpayer's one week deadline to provide additional documentation. Unfortunately, they were out of town and did not get the notice until time to reply had expired. Result-no coverage for the children from Jul-Dec. They finally did get full family coverage starting in Jan 2018. Any relief for penalty in 2017? art

Employee excludes his 25 % share of medical insurance premiums under company qualified plan. He will be retiring later this year. Under company plan the employer will continue to pay 75% and the employee pays 25% after retirement. Employee wants to pay the balance of his entire share of this year's premium on a pre-tax basis. He also wants to pay all of his share of next years premiums on a pre-tax basis before he retires in 2017. I have never head of anyone trying to do this. Has anyone run across this before? Your thoughts? Art

Pastor makes several overseas missionary trips each year. He is a dual status taxpayer in that he receives a W-2 for his "wages" but pays SE tax on his earnings. Pastor's wages are reported in box 1 with no other entries on W-2 except for parsonage allowance in box 14. The church does not withhold FIT or pay in Medicare or SS. For SE tax he is allowed to deduct his 2106 expenses after applying the tax free % from clergy 1 worksheet.The church synod pays for the air fare and room accommodations only. He pays for everything else. My question concerns the use of State Dept M&IE allowance tables to substantiate these deductions much like the CONUS tables for travel in US. For example in he travels to India and the State Dept tables allow $90/day can he claim that without a paid receipt, just a daily log entry with the business purpose of missionary teaching/preaching? If so, then could he use those expenses (after applying the 50% limit) in computing his SE tax? Is my understanding correct? Art

After 2016 was filed taxpayer informs me he when out to the market place to get his insurance for 2016 rather than purchasing it privately as he had done in prior years and comes in with 1095-A. On the return as filed $4328 of SEHI was claimed. My fault for not asking beforehand. Anyway after completing the 8962 and calculating the repayment of $274 PTC he loses out on $4194 of SEHI deduction. Comparing 2015 and 2016 he actually winds up paying about $500 more for his insurance through the Market place (bronze level), pays back $274 of PTC and will owe about $494 of additional tax. Does this make sense?

Ringers, If the rental property were not available till Jan 2017 would anything be deductible in 2016? Held over till 2017? or just plain lost? artp

Taxpayer bought a house for rental property in Dec 2016 closing on 12/09/16 and took out mortgage receiving 1098 showing interest $216.18, Mortgage Insurance premiums $1972.25 and points $2130.38. She held it out for rent in 2016, but was no able to get a lease signed until Jan 2017. Occupancy will start 04/01/2017. Is any of this deductible in 2016 on Sch E? or Sch A ? or does she have to wait till 2017?

Is there any way to get your password updated other the calling their 800#? I have been trying for 4 days and keep getting message that they can not respond and call back later. artp

Taxpayer is building a 50x50 ft. structure next to his existing residence. This structure will include a completely finished living abode-kitchen, bath, bedroom ect and will also service as a garage, workshop and storage area. The living abode will meet all codes requirements for a dwelling unit as he plans to use it as a residence for an elderly family member. If he decides to install a geothermal heating/cooling system in the structure will it qualify for 30% energy credit? My concern is that although the structure may meet the definition of “dwelling unit” he may not meet the test “used as a residence by the taxpayer”. I would welcome your input on this as I have never had this situation before.

One further thought. Does the fact that the brother can not deduct the $18K loss ($30K-$12K=$18K) have any effect on Mom's basis that gets passed on to the son for that 50%? Is that $18K just lost out to everyone?

Thanks for the reply. There were no improvements made.

Taxpayer (son) sold investment real estate acquired by gift (quit claimed deed) from Mom. Sales price to unrelated party was $60,000. Mom inherited 50% interest in the property from her father. The other 50% went to Mom’s brother. Property was valued at $66,000 in the estate. Several years later when value was depressed Mom bought her brother’s 50% interest for $12,000. Question: What is son’s basis in the property? Does he get date of death value for 50% interest that his mother purchased from her brother or is that 50% based on the $12,000 that she paid?

In 2013 taxpayer agrees to purchase a small tract of ground FMV $35,000. He gives the seller $15,000 in cash and he agrees to do excavating work for the seller (on an unrelated project) as payment for the balance of the purchase price. Taxpayer personally owns the excavating equipment that he uses on his farm. He is not a contractor and does not do excavating work as a business. Taxpayer should have reported $20,000 of barter income in 2012, Correct? If so, would he then have a tax basis in the property of $35,000? If he sells the property 2015 for $55,000 he would report a capital gain of $20,000 assuming the property was held for investment. Correct? Problem: If taxpayer did not report the gain in 2013 and refuses to amend the return how do you report the sale in 2015? I would appreciate feedback on this as I not sure how to handle this. Thanks, Art

Thanks, just was concerned that I was missing something.

I have W-2s that has been stuck on "submission" status for over 10 days. I emailed a "wage reporting expert" per the website, but have not gotten a response. Has anyone else having this issue? Or is this just "normal" processing delays.

I have also used Nicky's folders for years. They are extremely durable, with dual pockets and a business card insert.

You are correct as long as the interest expense she is paying out is not greater than the interest income she is receiving on the note from the buyer.

Terry, Pub 523 and TC case Keith 115 TC 605 (referenced by another preparer) support the position that the contract for deed is a completed sale under state law. But the deductibility of the interest expense on Schedule A still bothers me. Since she no longer lives there, it is not her personal residence. So how does it meet the test to be a "qualified home" ? The only thing I see is if you can fit it in as "second home not rented out." Since she still has legal title to the home (the buyer only has an "equitable interest" in the home) and she is not renting it out or holding it out for sale, she does not have to use the home herself. Does this meet the test or is there something else that I as missing here?

Thanks Terry. I started working on this very late last night and I did not see this in Pub 523. I will check again this morning. Art

IL taxpayer (single) sold personal residence for $ 150,000 under contract for deed in Sept 2013 receiving a down payment of $15,000 and took back a 30 year 5.5% note with a 5 year balloon. She purchased the home in 2003 and used it as her personal residence unit Nov 2011 when she acquired a new residence. She had attempted to sell the old home, but could not find a buyer to do a straight sale and finally had to do the contract for deed. Taxpayer still has a mortgage on the property and continues to make her loan payments. Taxpayer meets the 2 out 5 year rule and the gain is less than $250,000. Question 1 Does this qualify as a 2013 "sale" for purposed of the Sec 121 exclusion with the result that she only needs to report the interest income on note payments from the buyer? Question 2 Is the interest she pays on her mortgage on the old home deductible on Schedule A?

I have an Illinois resident who received a K-1 from a MO trust showing dividend and capital gains on the Fed K-1, but he did not receive a MO K-1. Are these items considered MO source income for a non-resident that need to be reported?

Thanks for the feedback. I apologize for not acknowledging sooner.

Church reimburses the medical insurance premiums that are deducted from the pastor's wife's salary. She is employed as a nurse for a local hospital. Since the medical insurance premiums for the family medical coverage are deducted on a pre-tax basis on her wages, the premium reimbursement payments that the church pays to the pastor would seem to be taxable income to him on their joint return. Pastor is a dual status filer (no 4361 exemption) so what is the proper way to report the premium reimbursement? Add the reimbursement to his church salary and report the total on his W-2 in Box 1 only ? Pastor has no other self-employment income so there is no Schedule C to be filed. His W-2 salary is included in the clergy income worksheets so the insurance reimbursement would also flow through as taxable income for SE tax purposes. Does anyone have an alternative way to report this item or a suggestion for better way to structure this benefit?

Taxed I have used their folders for the past 3 years. They look great and hold up well and clients appreciate the "finished" look and I think they are a great value. Art

In the past I have used the BNA portfolio 564 which has excellent coverage on this topic and lays out the relationships in a straightforward manner...just rather expensive at $400.