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Is this fee the 1% Foreign Estate Fee charged to MD nonresidents owning property in MD, meaning the property in question was worth $4.4 million. Is that correct? If so, this is a fee charged by MD Register of Wills that allows the estate to convey title to that MD property when it is sold or bequeathed. To me, that sounds like a probate fee or fee that allows similar probate-type authority granted by MD Reg of Wills, and I would probably treat it as such. You should do some more research as this is just my opinion. Maybe some of our MD preparers will chime in on this too.

Do you have any PPC guides? If you have the one entitled "Preparing Financial Statements," it covers the various categories and handling of debt securities including its opinion on classifications and handling of sales in the "held to maturity" category.

Yes, upon termination the unused losses of the trust or estate will pass to the beneficiaries via the final 1041 Sch K-1.

Marie, please see the instructions for form 8582 under "who must file," "rental activities", "special allowance for rental real estate activities," and the 5 "Exceptions" under "Rental activities" beginning on page 3 to determine if you should be checking the box on the sch E input for "active participation". As you read, keep in mind that there are differences in the definitions of "active" and "material" participation. If you check the box A as "active" participation, it will not allow any of the loss and should show -0- in col G and generate the 8582 worksheet with 8582 line 1d being -0- and 8582 line 3 being the -50K. Then the bottom of that is the lesser of 1d or 3, allowing -0- loss. Right now I think you have it allowing the default of Sch E, box D, and it is allowing the full $50K loss to show up in col i on pg 2 of Sch E as nonpassive.

Also, is this showing up on Sch E, page 2, UNDER PASSIVE LOSS IN COL G?

That depends. Again, did you include 8582 in the return? Does the partner have other passive income? Does he have other income or gain from this partnership that is allowing that loss in full?

I have questions rather than answers - Is this one partnership? If one, how is there SE income if it has a loss? Is income subject to SE on the K-1? Are the activities separately reported and then aggregated into one K-1? What boxes are checked for participation, active or passive? Did you include form 8582 in the return? Is there some other income or gain related to this partnership during the year that is allowing the higher loss? Was it disposed of during the year?

Here in DE also.

Length of stay, extent of services provided, and material participation are all criteria. Depending on these factors, it could still be passive. I don't place much relevance on mgmt co providing a flat amount each month. That could be a partial amount set in the contract so that owner has a steady income flow, and then settled up periodically.

I agree. The rule that proceeds must be used to "buy, build, or improve" would apply. It is possible that some may be deductible if the owner used some of the funds for renovations, for example to make the property more livable during aging, handicap accessible, or for upgrades/modernization. Also, the lender may have required some improvements be made in order to qualify for the loan too.

There is the question about not having felony drug conviction by year's end for the AOTC education credit.

Well, I have no idea what you think is not correct. Is it the wording of the ATX warning you are questioning, or is it the form 8889 instructions for line 2? The form's instructions are clear on the handling of pre-tax funds contributed through an employer's cafeteria plan.

I know there are the usual questions regarding ownership and foreigners, but I don't recall seeing any questions specific to the BOI reporting on the 1040, 1120, 1120S or 1065 forms. I pulled up each of those forms for 2023 and searched for "beneficial" and didn't come up with anything. What am I missing?

What would be the need for proof of filing, as a courtesy reminder if they haven't? Will there be questions on the returns that requires us to know this? I did just make 2 reminder phone calls for 3 clients all using the same law firm. The first one has his own LLCs for real estate and also has authority to make decisions for parents' LLC. He received an information package for his own reporting but parents have not. The other client didn't even receive any package for his C corp.

I'll be filing only for my own corporation later this year.

In this scenario, DO NOT ENTER ANYTHING ON LINE 2 OF THE 8889. That would definitely be an error. The taxpayer's benefit is via the W-2 box 1 wages having been reduced.

Drake's program uses only authenticators. It doesn't email any codes, if that is what you were thinking. Here's the complete setup: https://drakesoftware.com/Site/Browse/15895/Drake-Tax-MultiFactor-Authentication-Drake18-and-Future

Drake has had this for years. You just need to turn it on in the settings and set up the app with Drake through your phone.

If the only employEE funds contributed are on the W-2 as a reduction in wages, you don't enter them again on the 8889. The only thing you should enter on the 8889 is the limitation amount or check a box for family or self coverage so that the program calculates the limitation for you. I think you asked the same or similar question back in April here:

Elrod's link in the original post does go directly to IRS' IR 2024-201, and for those that don't like links or won't search for yourselves, here is the text:

What was the FMV of the home as determined by appraisal? It may be that parents sold at below FMV, and if so, that will affect the answer here.

Do you know if the attorney is actually aware of the amount of income in the estate?

Did the program include the worksheet for the General limitation on tax credits and the 2 worksheets (A & B ) for the limitations related to the form 8812? If so, go into the program and make sure that those were calculated correctly when the return was submitted, and that the return submitted matches what you believe are the current correct calculations. In other words, make sure that there wasn't a program update of the calculations after filing this return to verify that you are looking at the return that was actually filed. I once had changes that luckily didn't affect the final outcome of the return, and when I opened the return within the program it didn't match the pdf of what was filed for the client.

Wow, Marilyn, that is quite a story. I am so glad you got the help and are healthy again. Margaret, the same for your husband as well.