jklcpa

I think, we as practitioners, need to be mindful of not missing planning opportunities with clients that we put on extension that may find themselves in situations such as Lion's client is now facing. This is the sort of scenario that exposes us to more risk because of the April 15th deadline for making prior year contributions to IRAs and HSAs that have the potential to possibly save the client thousands of dollars in repayments of the APTC. By the way, I'm not suggesting that Lion did anything wrong here, only that her client's income appears to have only slightly exceeded the 400% of poverty threshold and that in these cases it is sometimes possible to lower that AGI and lessen the burden of repayment. If this client had been $1 below the threshold, she may have still owed something back, but if the income didn't exceed that 400%, the payback would have been capped. Also, I'd like to know if the entire $7000 is all due to repayment of the APTC, or is some portion of that because of low/no withholding on the IRA distribution or a penalty on that? She was only on the state's marketplace policy for 8 months, so if the entire $7K is all APTC repayment, then she was getting $875 per month in help paying her premiums? Just curious.

Yay! Glad you worked it out. Overthinking...we all do that!

I would amend the returns. Although there will be no refund received from 2011, any time there is a change in income, deduction or credit, amendments should be filed. While this is a carryover that you say will not affect the outcome of other years, the c/o had the potential to reduce income. It will also give the IRS the proper paper trail and flow of the loss carryovers from year to year that you can point back to in the event it is ever questioned. Also, be sure to include the 8582s on an AMT basis too because the IRS has no way of knowing how much the 8582 calc'd on the AMT may differ, and I've had the personal experience of amended returns being held up in processing and questioned because the AMT calcs were not included.

re: recapture - maybe all or only part. See the instructions for line 21 of the 8824. I don't know what worksheet you are trying to make work, so let's try using the 8824 step by step: line 15 will be 150. That is cash of 125 used for mortgage + 25 not reinvested into any new property. Not reivested is the 225 cash received by the intermediary - 200 used to acquire the new property. line 16 - 200, the FMV of new property line 17 - 350, a subtotal line 18 - 120, the adjusted basis of prop given up line 19 - 230, the realized gain (SP of 350 - adjusted basis 120) from there, you'll have to work through the recapture for line 21 to determine the ordinary income portion. I can't do that since you didn't give the details. Your total gain recognized shouldn't exceed the 150. I hope that helps.

To indicate full-year coverage, be sure to check the box on the 1040, pg 2, line 61. It's to the left of the column. jmdaviscpa's answer above is correct. She is not eligible for the PTC so all will be paid back without limitation. Fill in the 8962 monthly, no need for the 8965. ETA - I'll be moving this topic to the health care section later on, but leaving it here for now so Lion can easily find it.

You're welcome. Glad I could help to clarify.

I agree with Dan that the numbers don't make sense about the $50K difference. Part of the problem that I see, if I'm interpreting your post correctly, is that the mortgage debt of $100K on the relinquished property was paid off with exchange funds so that is creating the addtional boot, and also is the reason that the client was able to only reinvest $200K in the acquired property. The realized gain on the property given up is $180K, but the form should work out that the recognized gain is limited to the $100K of boot not reinvested in the new property. It is as if the client received that $100K in his hands and then took it to pay off the bank even though it was paid on his behalf directly at settlement, and any time the seller touches the money, there will be gain recognized. Ultimately, to answer your question, the entire $100K would be capital gain if this was income-producing or investment property, if there was no ordinary income recapture component carved out due to depreciation.

No info on the link yet. I'm sorry, I'd help directly if I could but I've only had a handful of these and don't feel comfortable giving advice.

That's not an error message but a footnote that's actually been required since the tax act of 1986 and fall within the scope of sec 263A interest cap rules and the related party rules. The article below gives an overview of when costs are required to be capitalized, possibly even some costs outside of the partnership. It also talks about when capitalizing might not necessary under deminimis rules depending on the level of ownership but that related party rules must be considered before making a final decision on that. http://www.gilaberttax.com/2013/03/26/avoided-cost-k-1-footnotes/

A baggie would handle that one...or a hammer.

Link to IRS page re: Closing an EIN

Thanks, Elrod! That's very helpful.

Depending on the path of the hurricane, we could have anywhere from 4-10" of rain this weekend. Ugh! On the funnier side of things, our county police dept was having a some fun on Facebook this morning with the forecasting. Don't worry, they all promised to keep their day jobs.

It might have been stated in the will, either at a stated amount or percentage, but why didn't the executrix decline to take the fee?

I agree with Ron and will go one step further. Deductible medical travel/transportation includes those expenses for the patient, and someone accompanying, for the patient to get medical care or treatment. In your case, the mom isn't traveling anywhere. Also, specifically excluded from deductible medical travel expenses are those that are merely for the general improvement of one's health, so even if the travel we are discussing was the mom's travel, the travel to interview and hire specific caregivers (vs say, choosing an agency from recommendations or others' feedback) would more likely be related to generally improving mom's situation as opposed to receiving specific medical care or treatment. The travel for sons to get to mom is personal commuting, nothing more. If mom wants to help the sons through her estate beyond their inheritance and reward one or more of them over other siblings or beneficiaries, she can bump up their share of the inheritance or increase the executor fee they might receive. Of course, any executor fee would be taxable income to the recipient.

Maybe. The legal fees would have to fall within the scope of those that would be deductible on Sch A as a miscellaneous deduction subject to the 2% of AGI haircut.

I don't agree with the above statement on when the 10 year statute began, and the OP didn't provide enough information for anyone here to determine that. Here's a snippet from the IRS manual on collection procedures, specifically about the the "Collection Statute Expiration Date" or CSED as abbreviated below. First, we don't know when a Substitute for Return was generated by the IRS or when the first deficiency assessment was dated. That is the date when the 10-year collection period starts, and that date is not adjusted later on if the taxpayer files an "original" return that then replaces the SFR created by the IRS. Here's that section from the manual I linked from: 5.1.19.3.15 (01-01-2006) Substitute for ReturnWhen a taxpayer fails to file a timely income tax return or files a false or fraudulent return, the Service may execute a return under the authority of the IRC 6020(b) deficiency procedures. If the taxpayer fails to respond to the 90 day notice, the Service makes a deficiency assessment. The Service may also make a deficiency assessment if the deficiency is upheld by the Tax Court. Upon that assessment, the 10 year period of limitations on collection, provided for in IRC 6502(a)(1) begins. If the taxpayer later files their own "original" return showing a tax liability smaller than the assessed liability, and that return is accepted by the Service as filed, the tax liability may be reduced to show the amount of tax reflected on the taxpayer's return. The original CSED date remains intact. If the taxpayer's "original" return reflects more tax than that assessed from the statutory notice based on the section 6020(b) return, then an additional assessment is input for the increased amount. In this scenario, the original CSED remains intact and a second CSED will be systemically established based on the additional assessment.

Thanks for sharing that. I haven't been to one of their seminars in several years, since the year after I switched. While it is a sales seminar, I did pick up some useful information on shortcuts in the program and some features that I didn't know existed that help me to speed up the input process even more. It seemed like the one I went to was attended by many existing users that were asking questions about some of these features and new ones that had been added, so the presenter was flexible enough to add those things into the program.

I enjoy having 4 distinct seasons. Our weather is gorgeous right now with daytime highs in the mid 70s, lows in the low to mid 50s, and lower humidity. Perfect early fall weather.

According to your article and cite, companion sitter would be reported as an independent contractor. I think it is interesting that this one job has been statutorily defined because the job of sitter also has duties that overlap into other areas that a hired housekeeper might perform. Based on the limited pages I looked at, it seems that the caregiver's status could go either way and that the determination is made using the facts and circumstances and rules we normally use for deciding if someone is an independent contractor. ETA - yes, they are different jobs. Caregiving definitely requires more training and skills. The medical community also has a specific view of what "caregiver" means, and it does involve someone that assists with the ADL, and some people hire caregivers so that they can remain in their homes longer instead of having to move into assisted living or a full-care nursing home.

Gail, I like your post above with the definition of a companion sitter and the cite, however I agree with Jack that "caregiver" and "sitter" denote two distinct categories as to the level of services provided. While both may work with the elderly and disabled, to be a sitter requires no specific training is more of a companion, much like babysitting. The caregiver may provide all of the same services as a companion but is also able to provide assistance with the activities of daily living and may also provide limited medical care. Here's a good page that discusses the distinction. I only went so far as to visit the IRS site and perform a search for "caregiver", and this IRS page was the first on the list. It has a discussion of caregiver reporting and refers the readers to pub 926, and there appears to not be a statute that requires caregivers to be reported only in one way. I didn't research further, but this page sounds like most of the others when weighing the issues of independent contractor vs employee.

Great question, Yardley. What's interesting is that the IRS came out with Rev Ruling 2013-17 mentioned here and another one for employers relating to payroll taxes, and discusses on that page about amending returns for tax years still open when the couple was legally married during those years. The interesting question is how the states are dealing with this in those states that piggyback the federal definitions and rules about filing status and income. I did a little poking around the internet and found this extensive summary done by a benefits attorney posted this past June. Be sure to scroll all the way to the bottom. Lots of information is contained on that page. Take it as a starting point and definitely check with your specific states' departments of revenue.

Since that is the area you work in, would you mind elaborating on those services that might be included and warrant a higher fee?

The IRS will announce the date of the e-file shutdown in a Quick Alert. Anyone who hasn't signed up for these can do so at the link. It's a safe link that goes to the IRS site.

I hid Catherine's and my latest posts so that this topic isn't further derailed into discussing attachment limitations. I added a post in the Help section that covers attachments. I hope that helps and will try to keep this topic on track. Thanks!