jklcpa

You're welcome.

I think it depends on the type of business before you can say for sure. If the business is somehow related to firearms, shooting, hunting, etc, then the range fee might be considered directly related to the business. If not, then you need to decide if the entertainment meets the "associated" test. The range would have significant distractions and would preclude conducting any sort of business meeting or discussion while actively participating on the range, but if a meeting is documented either before or after, then it might be possible to claim a deduction. Also, if some of this does turn out to be deductible, if he paid for someone else to attend the meeting that wasn't necessary to conducting of business, that portion is not deductible. Check out Pub 463 for the "directly related" and "associated" rules. The owner's personal firearms and ammo would not be deductible as an entertainment expense. That would fall under the same rules that say a person's yacht can't be deducted for such purposes. I doubt this person has any deduction. It sounds like he's scratching around for deductions of expenses that aren't really deductible.

Reporting the entire sale IS the election, and don't use 6252 at all. Use the other appropriate forms of 8949 and 4797.

Yes, the portion that is nonrefundable is considered prepaid medical expense, and this is an exception to the rule that says payments for medical that are substantially beyond a year aren't deductible in that year. You need to look at the policy though. Here is the section from pub 502 - Lifetime Care—Advance Payments You can include in medical expenses a part of a life-care fee or “founder's fee” you pay either monthly or as a lump sum under an agreement with a retirement home. The part of the payment you include is the amount properly allocable to medical care. The agreement must require that you pay a specific fee as a condition for the home's promise to provide lifetime care that includes medical care. You can use a statement from the retirement home to prove the amount properly allocable to medical care. The statement must be based either on the home's prior experience or on information from a comparable home. Dependents with disabilities. You can include in medical expenses advance payments to a private institution for lifetime care, treatment, and training of your physically or mentally impaired child upon your death or when you become unable to provide care. The payments must be a condition for the institution's future acceptance of your child and must not be refundable. Payments for future medical care. Generally, you cannot include in medical expenses current payments for medical care (including medical insurance) to be provided substantially beyond the end of the year. This rule does not apply in situations where the future care is purchased in connection with obtaining lifetime care of the type described earlier. If any of the cost was paid with tax-free funds, then that portion wouldn't be deductible. Here is an article that popped up in my search that discusses the types of contracts and their levels of service. You should look at the contract to see if it covers other services besides medical such as bill paying, housekeeping, running errands, etc, that aren't medically-related. The article states that these can be deducted under sec 213, and talks about the actuarial and percentage methods of allocating when policies cover more than just medical expenses.

Marilyn, I know that's how ATX works, and so do many other tax programs, including the one I'm now using. I was asking the OP since she's concerned about it being taxable or not, and how to get rid of the refund off the return. The refund isn't taxable since the income on the return was negative, and even the AGI was negative, so the OP should simply delete the entry from the input screens. Really, I was anticipating her next question of "will that generate a notice if the client received a 1099G?" and that is why I put that in there.

See pub 525 concerning recoveries of amounts included in itemized deductions in a prior year. Maybe this part will help you: Negative taxable income. If your taxable income for the prior year ( Worksheet 2 , line 10) was a negative amount, the recovery you must include in income is reduced by that amount. You have a negative taxable income for 2013 if your: Form 1040, line 42 was more than line 41, Form 1040NR, line 40 was more than line 39, or Form 1040NR-EZ, line 13 was more than line 12. At the bottom of Worksheet 2 linked to above, in reference to entering taxable income for the prior year it states: 4 If taxable income is a negative amount, enter that amount in brackets. Do not enter zero unless your taxable income is exactly zero. See Negative taxable income . Taxable income will have to be adjusted for any net operating loss carryover. For more information, see Publication 536, Net Operating Losses for Individuals, Estates, and Trusts. The NOL was created in 2013 and wasn't from a carryforward from a previous year. Because you say that the tax didn't change with or without the Schedule A, there is no tax benefit to the state tax being included in the Sch A and therefore the state refund shouldn't be taxed. I'd just delete the entry from the return and move on. Is this question coming up because ATX included the state refund when you rolled the data forward, or did your client actually receive a 1099G for the refund?

If there was no activity at all and no returns ever filed, I don't believe there is any requirement to file a final return. There is nothing to report. If the LLC had an EIN that has gone unused, the IRS will eventually make it inactive and reuse the number at some point in the future. I am curious about what these LLC members were doing for the 11 months that you said they were active in the LLC. What exactly were they doing for the 11 months?

How I wish we could! We had sleet and freezing rain most of the day and everything is like an ice rink. My back yard has 1/2 inch of ice on top of snow that hasn't gone away, and tomorrow it will start to melt into small ponds and refreeze later as the temps drop down into the teens. There was the possibility of power outages, but the wind was light enough that we seemed to have dodged that one. I'll be cancelling more appts tomorrow morning until my sidewalk and office steps are safe. ~sigh~

If the college student is a dependent on the parents return, then the parents will be responsible for the penalty. Also, the student's MAGI will be included for purposes of calculating the penalty if the student was required to file a return. Don't include student's MAGI if student files only to receive a refund of taxes withheld or estimated taxes paid.

The year I switched away from ATX to Drake I had 2 companies come late and I missed filing the 1099s through ATX and was too late to get everything set up for the FIRE system to use Drake. It was only a few 1099s so I used efilemyforms. You can choose to print and mail the recipient copies or have them do that too. It was easy and worked well. There are several other sites for 1099 & W-2 filing that I saved into my favorites that I didn't use, so I can't comment on how easy or effective: http://www.bgtaxforms.com/e-file-s/7.htm https://efile4biz.efile1.com/Default.aspx http://tax-print.com/index.html FIRE isn't all that difficult, but one more place to learn, log in, create files, etc.

http://www.ssa.gov/ Click on Business & Government, then click Business Services from the list that appears. Scroll to the bottom and at lower left click Log In or Use Business Services Online. Upper right, select Register. From there you can set up your user account and will be assigned an 8-digit User ID that you'll use to log in each time. If you are using the ATX payroll program, you'll need to enter that for efiling those. Once you have that, you can upload your files directly to the site and check on their status by logging in to business services.

I had to increase the size of the display on my screen in the last year or so. I understand completely about the size of the fonts, and I think there should be a minimum set. I had someone fax me several forms that were missing and I was barely able to make out the numbers!

Oh, I do always enter it so I do have the info, but if the box is checked 'yes' for "Do you meet these requirements..." then in order for it to print on the return, the user must check a box to force its inclusion. Isn't ATX still this way?

I give only what is required, nothing more. I do check the box to force the balance sheet to make sure I'm in balance while I'm working on the return, and then I remove that before filing. What is your reason for wanting to include this?

Adding to Ron's post, consider deducting costumes, props, a portion of internet access, supplies. Treat this like any other business, explain to her about expenses needing to be ordinary and necessary, and have her give you a list of expenses that she can document. I'd treat her like any other client, and if I couldn't then I wouldn't have the person as a client.

Wasn't thinking would be more like it! Do you think it was to record the personal use of a company owned auto since the debit is to compensation, or do you think the CPA was trying to record business miles of a personal auto since the credit is to add'l pd in capital? lol Hard to guess what was going on there.

Dividing the loss carryforward IS a sticky situation and goes back to whether state law, the divorce agreement, and settlement interpret that carryforward to be property of the marital estate. Then, there's also the consideration whether state law preempts Federal law, the tax code, that says that the loss follows the legal title of the account and transactions that gave rise to the loss in the first place. It can be further muddled if separately owned assets generating losses are used to offset gains from jointly held assets, and that may have been claimed over years. At least this case involves only the wife's inheritance and one tax year. There have been cases about this that go both ways, so the answer isn't always clear at all. I don't know if these will help. The first one has some cases cited and a concluding section (that doesn't really reach a conclusion we want) that mentions valuing the loss carryforward by the future tax benefits that it will produce. That probably wasn't done in the case with Terry's client since the wife got $67K more because of the husband's mishandling, so not sure if the loss itself was considered a marital asset. It doesn't sound like it. http://www.divorcesource.com/research/edj/tax/05nov121.shtml The second link is about a particular case in MD where a divorcing couple had jointly held investments that generated cap losses. The wife relinquished any right to the jointly held account, and then used ~ 50% of loss c/f on her next return. Husband sued that she didn't have the right to the loss c/f and court held in his favor. Wife appealed and the appeals court reversed the decision in favor of the wife stating that the carryforward was not an interest in the investment account itself. http://www.marylanddivorcelawyer-blog.com/2015/02/12/maryland-court-interprets-settlement-agreement-dividing-marital-property/ That's a long-winded way to say "it depends."

You are correct. This qualifies as a gift of a present interest, the parents recognize the amount of the gift as payments received on the installment note and report their proportional share of the gain for the year on the 6252. It's as if the children paid on the note and the parents gifted that same amount of cash back to the child and child's spouse. Same next year when the note will be satisfied by the gift of the remaining principal forgiven and will be the final year of the installment sale. The children will have the full basis in the company according to the original agreement with no reduction for the amount of debt forgiven by the gifts. This is similar to self-cancelling installment notes, aka death-terminating installment notes, that allows transfers of a company or highly appreciated real estate to a child, bypasses the estate tax, and the child still receives a step up in basis.

Weird, almost this same question appeared over on the Drake forum recently. I had one years ago where a client was contributing to an IRA and not telling me because she was covered by a plan at her work, and the entire IRA was n/d so she thought no need to report anything. I wrote a letter that accompanied all 8606s for the prior years that should have been submitted to document the basis. From there I properly included an 8606 with each year's return after that. IRS didn't assess the $50 penalty for not filing those back years, and client never heard a word about basis not being allowed either. I totally agree with Tom's first paragraph about basis being created and calculating the deductible and nondeductible portions of each year's contributions. No to the 3115 also.

This is going off-topic pretty far and bringing politics into the discussion once again. I've had a request to lock the topic, but anyone that wants to discuss guns and shooting could start a new topic and leaving out the politics. My husband has several coworkers that have built their own guns. That is perfectly legal to do here and to own and shoot them, but not OK to sell them. Last time he was at the range with them he tried one out and I think he'd like one too. He's not too subtle about dropping hints about prezzies he'd like to have. lol

Here in DE, if person dies intestate the court would appoint also, but they would first consider any spouse, parents or siblings over an unrelated administrator. Also in my state, any estate assets would be used to satisfy debts of the decedent, and if debts exceed that when all is liquidated, then no one else would be responsible for the remaining debts unless there were things like someone had guaranteed the debt, co-signed a loan, was co-applicant on a credit card, etc.

Yes, that falls under "exception 1" as described in the instructions for the 8949. You aggregate the appropriate totals and report them directly on Sch D. No need to use the 8949, and you do not need to attach anything to the return either. This only applies if all are covered securities and you aren't making any adjustments to the amounts reported on the 1099B. It's on pg 3 here: http://www.irs.gov/pub/irs-pdf/i8949.pdf

The point of the article in the original post said that the IRS isn't going to pursue collecting additional amounts owed due to their error, so it won't be a wash that benefits their side of things because some of those affected will choose to amend for refunds due back to them, and yet others are waiting for the corrected form.

The IRS can't fix this for many taxpayers because even if the 1095-A had shown the 2014 SLCSP instead of using the 2015 amount, those aren't always the amounts that should be used on the form 8962 and need to be adjusted. Below are 3 examples of when the 1095-A figures might need to be adjusted because the taxpayer failed to notify the exchange of a change in their circumstances, especially if they contacted the insurance company directly and effected the change in that manner. When an infant was born during the year, if the parents contacted the insurance company directly to add the baby and didn't notify the exchange. In this case, the coverage family would have increased by one person but the 1095-A reporting of the SLCSP would still have been based on only two people. Another good example would be a married couple where one of the parties went on Medicare during the year and didn't notifying the exchange. The 1095-A would have reported the cost of the SLCSP for 2 people but should have decreased to one person starting with the month that Medicare coverage started. Third example is if someone moved and didn't notify the exchange and the cost of the SLCSP was different in the new location. In each of these scenarios, we would have to look up the cost of that SLCSP for the proper number of people or locale to properly complete the form 8962.

>goes to the VA for medical issues/prescriptions< So he just goes to the physical place, the VA hospital or clinic in your area, and he wasn't actually enrolled in the VA health care program?