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I'm in NY. NYS likes to do more auditing than the IRS here. But I have successfully argued my way thru a handful of farm/ag audits. The first issue in NY is the ridiculous property taxes. Try to have a farm without property. Try to have profitable farm when you have to pay property taxes here. (yes - there are some credits available.) Second is interest. Farmers are always indebted. Interest is a fact of life eroding the profit. And third is depreciation. Most farmers are turning around equipment and taking advantage of bonus or Sec 179. After taking these things out of the picture, the hobby argument tightens up. Now we can talk about hours. And we can talk about why someone would do all the stuff as a hobby. And then I can start my rant about how the farmer can't seem to raise his price on milk as he needs. He can't recover the increasing costs of trucks or equipment or electric by raising the price of milk, or soy, or any other product Uncle Sam has his hands in. Any time the government subsidizes the price of the ag product, you will have a farm loss. So most of the time, the IRS or NYS ultimately have to back off.

For a business devoted to buying and selling houses, I'd say it's listed under inventory costs, to be used when the house is sold.

MD and Marilyn, I really feel for y'all, what a nightmare. Certainly sounds like an ATX glitch; fortunately here in my last year I had no extensions. And the IRS seems better acquainted with Federal disaster areas than ATX--two of my clients had most of the underpayment penalties calculated by the software returned to them.

Correct, but for a continuing client, the losses roll over on the Personal tax return.

Not sure how to handle this for 2024. In late 2023 T/P forms single member LLC with the intent of buying and flipping houses and shortly thereafter buys first house. He doesn't start work on the house until mid 2024 and incurs approx. $30K in expenses which he has broken between materials, labor, utilities, etc. Work was not completed and thus house not sold as of yet. What, if anything needs to be reported for 2024? Thanks very much.

If the losses are handled by the 8582, then these are regular partnerships and not PTP partnerships. But in either case, if this is a new client, you enter the losses on the K1 input screens.

Doesn't the K-1 input sheet have a place for this? That is, prior year info if this is your first year for the client. If this client is a continuing client, doesn't that info rollover?

I am aware that I am doing way too much work. This has never happened to me before. I am doing what I have to in order to make it work and get this tax year over with. I know that you are all correct, but I cannot handle any more frustration with my assistant and getting this to work correctly. I filed several (including my own) yesterday and have no outstanding issues. Thank you all for your attempts to help me. We had way too many extensions and my resolve is to cut back next year barring another health crisis. Thanks again.

Thanks Lion. I have provided him with the Direct Pay website. I hope he knows how to use it.

Send him to IRS's Direct Pay immediately. He gets an instant confirmation of payment. You can calculate his P&I to pay, or he can wait for the IRS letter with P&I.

I arranged for "Bob" to pay his tax liability ($3000) with a bank draft to occur on 04/15. Didn't happen. Bob says all that happened was a $30 charge from the credit union for a disallowed check. Here's why (I think). On such planned withdrawals, Drakes asks us to designate "checking" or "savings." I indicated checking, as the taxpayer did not indicate any other preference. "Bob" says he put $3000 in savings for the IRS to take. When confronted with a draft, most banks/creditunions will transfer the money to checking so long as there are funds in savings to cover. This credit union did not. These are the facts. My question now is "What should the taxpayer do to pay the IRS?" Will there be a collection letter forthcoming? Will the IRS try again? If so, when?? "Bob" is waiting for me to tell him what to do. To be honest, I don't know.

@mcb39I am with @Abby Normal on this. You are doing way too much work. I have extensions every year and I have no issue with efiling the extension and then working on the return and when I have everything, efiling the return. Something is not working for you the way ATX works for me...... Tom Longview, TX

That should not be necessary.

Partnership losses are carried forward on the Individual Partner's 1040 return on Page 2 of the Schedule E. You always have to keep in mind that Partnerships do not pay taxes; profits or losses are passed through to the individual partners. My husband has carry forward Partnership losses for the second year in a row. His loss wipes out my tax liability but, unfortunately, does not wipe out my SE Tax.

When I filed, I did not click on the 1040 or the State return; only the 4868. I have found, as I stated before, that I now import the finished return as a copy; rename it "Client Name 2" and then file it separately from the previously filed 4868. These are working out and all going through. My belief is that no work should be done on the return before the 4868 is filed. That seems to be where we made our mistake. I am taking all of your suggestions to heart and using my workaround and hope that I survive this tax season; which is the worst that I have ever experienced.

Because they are separate efiles that can both be filed. You can file 4868 and then 1040, or vice versa. You can't amend a 4868.

I'm confused by this. How is it possible for the ATX program to allow the 4868 and the 1040 to be filed at the same time? Extensions I file are because I am missing data and the input has estimated amounts in it about 99% of the time. Will these returns require amending now?

I just found out that the two efiles that were rejected did, indeed, go through with the extension filing. Clients can see the refunds pending in their accounts. I am putting it all behind me and moving on. Everyone who has an extension will get a copy of their return created before it gets efiled.

You can't create the 4868 efile unless you check either the lock amounts box or the set all amounts to zero box.

I am sure you checked this, but did you "lock" the 4868 before you filed it? I still wouldn't have thought it would matter once the file was actually accepted.

Maybe ATX accidentally sent a batch of 4868s twice? I didn't file my 4868s on the 15th. I always do them at least a week early. I would just delete the rejected acks.

All of the above, believe me. I even went into my ATX and looked at the efile record. Some returns were marked as accepted on the 15th and rejected on the 20th. The 15th should only have been the 4868. I am not stupid enough to check Federal and State for the efile when I know that the return is not complete. My take on this whole thing is not to file for an extension if ANY of the information has been entered into the return unless you create a copy of the finished return to efile. End of story. Maybe I am losing my mind.

I find it takes just a few minutes, and you have to receive acks to update it.

Thanks everyone. I went to ATX customer support site and checked client's efile status - one of the ACK's listed was the Form 4868 showing accepted on 4/11/25. If I understand the rehang process - if I click on it then in about 20 minutes the ACK will show back on my computer - is this correct?

Do you have Efile status box at the bottom of your Return Manager screen? If not, change your settings to show that. Then when you highlight the return, does the extension show as Accepted? I just made some changes to a return that was extended, and I did not have that happen. Are you sure you actually transmitted the extension efile? With the return open, go to the E-file menu and choose Display Acknowledgement History. What does that say?