jklcpa

No deduction for your client because she is not the legal owner.

Stockholder of liquidated C corp was just notified by the electric company about overcharges spanning about 10 years(!) due to a faulty meter. The overage is being refunded in 2017 to the former stockholder and the amount is not insignificant. The electric company may have asked my client to provide a W-9. I have to find out about that. At the moment, I'm not sure what to do with this? Should the corporation go back and amend its final return to include the income and related tax effect on this (would be at 35% instead of at 15% had the utility company not overcharged in each of those years), and should the stockholder's personal return for that year also be amended because the liquidating distribution should have distributed the receivable less the related tax liability that the corporation also should have recorded? I'm really having a difficult tax season and now this is the icing that has my head spinning. If anyone has dealt with something like this, I'd appreciate the advice on proper reporting.

Well, this will end up with the proper tax result if the full amount was rolled over, but the notation will be missing from the face of the 1040 and the backup schedule will show the wrong code, if you do happen to print those for the client. If you want the software to print the proper notation of "ROLLOVER" in the margin near line 15 of the 1040, you should enter the 1099R information into the software with the code 1 so that the distribution is entered in box 15a, and also enter the amount of qualified rollover that was transacted within the 60 days. If the full amount was rolled over, then 15b will net out to zero.

Did this family receive a 1095B from Medicaid last year?

But did everyone in the family have some sort of coverage, either through the Marketplace or covered by Medicaid? Most Medicaid does qualify as MEC under the ACA, and if that is the case, why would you not check the box? The 1095A is to reconcile the APTC received to the final amount that this family was eligible for. A 1095B might be received showing the medicaid coverage, and I think the due date of these forms was March 2nd, so it is possible that they may still receive the form...I think.

Catherine is right. We still need to make sure of what the school has included in the numbers on the 1098T. The last one that I saw had some expenses included that do not qualify to be included in the calculations for any of the credits.

If I wasn't clear, those were the choices I gave to my one client so far that had a penalty. He chose to not extend.

Keyword: proposed Until I know more, I'm still going to suggest an extension but let the client decide. I've only had one so far that owed the penalty and he was still getting a refund. That client chose to allow the penalty and receive the reduced amount. His penalty was prorated and was around $300.

I googled to try to find the worksheets that are typically provided to stockholders when mergers occur. The FirstMerit/Huntington investor relations pages had only the tax filing and press release. If I were you, I'd try googling each of the bank's names and look for the information in the investor relations area, or ask your client to provide the information that he or she should have received in a package of information describing the tax effects of the merger. I did find this post by a CPA that talks about the merger and mentions the $5 per share with the merger to be completed in the fall of 2016 so I assumed this is the one you are referring to. Maybe you can match this blog post up with other documentation to determine if the facts presented in the blog are the same as your transaction. http://www.schlabigcpa.com/income-tax-effect-on-the-cash-received-in-the-huntington-firstmerit-merger/

"Unaffordable" is determined using the Affordability Worksheet that is part of the form 8965. If your client meets that test, code A would apply to this situation, and that code does not require any sort of exemption request from any Marketplace. I'm assuming that ATX has the worksheet and generates the "A" code if applicable information is entered.

My piece of "ugly" work this week was been a b!tch of E&P calculations that I had to reconstruct years worth. I made a theoretical error early on in it that is compounding the ugliness, and I knew something was wrong and was too tired to grasp what it was. When I woke up this morning it hit me exactly what the problem was, so I've spent a good portion of the afternoon reworking that portion to correct the errors I made and the mess it created.

I've had progressives with 2 prescriptions for years now, and I had trouble with my latest pair, now about 4 years old. I'm a little afraid to get new ones after all the troubles with these. When I went for that eye exam the doctor said I needed a change and ordered the glasses. There was something "off" with them right from the start, and I noticed that I felt like my left eye was being pulled in a little while wearing them. That problem was the focal point in the lens wasn't aligned with the center of my eye. I also had trouble reading the computer screen. I'm nearsighted so the top part was adjusted for distance, but I also need some help with reading and the doctor thought that the computer screen would be close enough to use the bottom reading part of the prescription like most people do. Wrong, because they assumed a certain distance to the computer screen for that. Turns out that my screen is about twice the distance at the back of the hutch and adding in room for the part where the papers are, the pull-out keyboard drawer, and me sitting in the chair. They kept asking me to read something like would be on my screen and when I set it off to the distance where my screen would be they finally figured out what was going on. The solution was to have a 3rd prescription for that intermediate distance to the screen built in to that progressive lens. It also solved some of the problem those have with bifocals that cause wearers to have to tip their heads back while working on a computer.

I had a problem with this too. In my client's case the student had just enough in wages that she spent on herself and also borrowed on student loans heavily, and if I read the rules correctly those loans factor in to the funds that she provided for her own support for the dependency test. In this case the numbers worked out that the parents did not provide more than 1/2 of the support and could not claim her as a dependent, not that they forfeited it, but actually didn't meet the rules. Part of the limiting factor for the parents was that the daughter didn't live at home for a couple of months and so some of the living expenses were prorated for the part of the year that she was at home. Student claimed herself. Then on top of that, she fell into that over 18 but less than 24 age range, and it worked out that her earnings were not more than 50% of her support, so she couldn't claim the refundable part of the AOTC. I think I got it right, but I reread those rules and what I'd saved for my files over again. At least, I hope I got it right....

Terry, this is slightly off-topic, but did you know that you can also save your Word and Excel files directly to the DDM directory and folder for that client, and you can do the same thing with pdf documents the client sends to you. You can also print any document using a pdf printer and save it there as well, such as email correspondence. Sorry for the hijack.

I brought up the land initially because the original question asked how to fix what the original poster thought was the incorrect basis being used when it was first placed in service, so I asked if it was because the land was broken out. Then when he responded to Pacun, he said that he thought the difference from the depreciable basis compared to the original purchase was indeed due to the land. I got the distince impression that he seemed to think that it should be the full amount of the orginal basis (minus the land) in the property on the depreciation schedule, and that may not be the case if FMV was less, as we know.

Ryan, be careful here with calculating a loss. Were you the preparer back in 2008 to know that the depreciable basis placed in service was the original cost after breaking out the land, or could it be that the FMV at the time of conversion to rental was less than original cost? I'm asking because that 2008 time period was when the housing market had significant declines in value, and there might be other reasons for that smaller amount being used for depreciation. When that happens and the property is subsequently sold, if that sale results in a loss using the full basis, you can't use the part of the loss attributable to the decline in value during the period it was used as a personal residence prior to conversion to rental status because a loss on a personal residence is never deductible. This is an excellent and slightly older article from The Tax Advisor that you might want to review before finalizing that return, and even though it is an older article, the rules haven't changed. Pay particular attention to the caution at around the 4th or 5th paragraph, and the detailed discussion of calculating the gain or loss on these converted properties. It also contains the reg. references to the pertinent sections that apply to this type of situation. http://www.thetaxadviser.com/issues/2008/jul/convertingaresidencetorentalproperty.html

Do you know what the $222,750 represented at the time it was put on the depreciation schedule? Was this after a salvage value or after land was broken out?

It's because contributions to the traditional IRAs aren't disallowed due to income limitations, they merely become nondeductible contributions and create basis in the IRA. With the Roth IRA, there are specific income limitations that will not allow the direct contribution to the Roth, so to get the money into the Roth it is this 2-step process.

If you request a wage and income transcript it includes the details of the information returns, and that should give you the employers' names. You son will then have the list of employers he worked for and can contact each of them for a copy of his W-2s.

You're thinking is correct, and yes, there are lots of things that aren't going well this season. Ugh!

I see it now. I was wondering about the duck comment.

I didn't look at that post because I don't have firsthand experience with per diem & truckers.

They are not allowed when moving out of PA. This from the PA DOR website, see pg 2, right-hand column: http://www.revenue.pa.gov/FormsandPublications/FormsforIndividuals/Documents/Personal Income Tax/rev-637.pdf

For the exact definition of "surviving spouse" contained in the tax code, please review IRC sec 2(a), and look specifically at the wording of 2(a)(1)(B) here: https://www.law.cornell.edu/uscode/text/26/2 You can review IRC 152(a), 152(b) and 152(d) here: https://www.law.cornell.edu/uscode/text/26/152 and review IRC 151, if you want to, here: https://www.law.cornell.edu/uscode/text/26/151 OR, if Reg 1.2-2(a), sub items (i), (ii) and (iii) might be easier and look at the specific way it is worded, you can look at that and note that it refers back to IRC 151, and keep in mind that, in general, IRC sec 152 defines a "dependent" a either a qualifying child or a qualifying relative.

I had to retype the characters that made up the links, use one of the blue colors available for the font on this forum, and use the underline to format so that it appeared the same as the link in your post. Sometimes it is also necessary to insert spaces when the link starts has "http" or "www" because it was still trying to create a clickable link when I typed it without spaces. That is also why sometimes you'll see people actually type "dot com" because that also disables a clickable link. After that, I then deleted the actual links. In your browser when looking at any site with links, you should be able to see a small popup somewhere on your screen when you point to any link. Mine shows up in the lower left corner of the screen and will show the actual web address where the link will take you to without actually having to click on it. It works in emails too. Try pointing at THIS LINK and you should see that it would take you to my profile here on this forum.