jklcpa

Maybe I'm missing the logic, but if the software is creating Sch B, it seems a straightforward process to print the Sch B as a single pdf and then attach it to the e-file. If the process is this easy, why suggest forgoing taking the credit? Also, if the taxpayer is able to utilize the credit carryover in the current year, then the credit would not be available in a future year just because someone decided to skip a year. Example: If one did skip 2021 when the credit c/o could have been used, the credit coming forward in the following year of 2022 would still have to be reduced by should have been used in 2021.

I also disagree with Slippery Pencil. Drake gives some messages within the program's calculation function and many more messages when one looks at the notes and e-file error messages that are part of the return that has been created. I always flag the "e-file ready" box to hold the return so that there is no way anything can be inadvertently e-filed in advance of having signed authorization forms.

Yes, absolutely! I have a few like that and it is very possible that the entire local tax is eliminated. There is an interplay with the state credit that comes first though, or should I say that is the method the local jurisdictions' calcs work in the locals I prepare. If you notice, that is why the income taxed in both states is multiplied by the PA rate and subtracted from the nonres state tax. In that way, only the excess is available for the credit on the local return.

Agreed. Drake rolls it over and flags it so that the preparer has to make a decision to accept it or make some changes on that screen. Eta - I think it is a setup option that Drake give the preparer to roll that information forward or not.

Is ATX creating the attachment for you? I haven't had one yet with a c/o, but did play around in a return to see that my software is giving the same warning that an attachment is needed. I didn't go so far as to see if the software actually creates it automatically for me to link the attachment to the e-file. It does create a pdf of nonresident returns required for attachment to claim the out-of-state credit on the resident state.

Sch B is new for 2021. I'd guess that IRS has decided to not devote the resources for the testing through e-file and is instead requiring the pdf. The 1116 instructions say that Sch B replaces the required attachment for line 10 that was needed in prior years.

Why do you say the community college doesn't qualify? If it is only because the student didn't attend at least 1/2 time at that school, the student already qualifies for being 1/2-tme student during 2021 at the university and meets that requirement. As long as the course at the community college qualifies as part of his/her course of study that will ultimately lead to a degree, then that requirement is met also. If the course isn't part of the degree program, then don't include it.

Yes, it does. A taxpayer can claim only one of the credits per student per year, so you have to choose which one works out better. The only way to have both credits on the same tax return is if there are two or more students where one takes the AOC and the other takes the LLC. As Slippery Pencil said, add the two amounts together and use that total for one of the credits.

Were QB balance sheets and P&L statements both printed using the same basis of accounting AND on the same basis as used for the tax return?

So do I.

"Binary attachment" refers to the pdf attachments to the e-file.

This was in one of our local online papers I follow: At least one business was not local, but was a bar in FL that had been closed down since 2018, and there were obviously many other falsifications. If you'd like to read the details, here is a pdf of the indictment: Indictment_-_A_Soto_-_21-cr-049_-_2021.07.06.pdf

Did he withdraw only his contributions, and does he meet the 5 year rule?

I think you need to look at the facts and circumstances of this particular taxpayer's case. As Gail from Virginia asked early on, does this person have another job and is part of that travel considered commuting to the 1st pick up of goods and from last drop off to home? Or the alternative, does this person have another job, does the person do the doordash on his otherwise day off? Next, Bulldog Tom mentioned that he thought the mileage would be commuting if the person did not qualify for a Home Office deduction. I do not believe that is the case. One does not have to actually qualify for that in order to say that the principal place of that business' activity is the home. Example - taxpayer could fail the exclusive use test of the space while the overall principal place of business is still in the home if there is no other.

Is it possible for you to file the federal as is, and then delete the 1095s and file the CA as a standalone filing?

It appears that Drake has both the 1116 Sch B and 8801. I added them to an existing return and they are showing up without watermarks or any holds on e-filing. Drake does offer a PPR option at a base price of $345 that includes the first 10 returns. Are there any other forms or schedules in the return that may cause a delay? If you list those, perhaps I or another user can check those too, or a Drake sales rep should be able to help with that also.

I'm not saying that this isn't true in the OP's case, but for other readers in future, this isn't always entirely true and is dependent on what else is on the return, where the taxes were paid, and if the tax is creditable or not. While the 1040 instructions do give this as general criteria of when the 1116 may be bypassed, if one reads the instructions to form 1116, it is an election to not include the 1116, and one must still consider whether the general limitations apply, whether a tax is actually creditable or not, and must still figure any amounts that would be shown on line 12. I'm sure that there are returns that should include the form 1116 that don't and are never caught by the IRS.

Capital loss carryforwards of a decedent die with the decedent and must be utilized on his or her final 1040, and that would have been 2020 for the husband's losses. The surviving spouse of a married couple filing a joint return in the year of spouse's death may utilize the loss c/f because that is the deceased spouse's final 1040, but then it is lost. Rev Rul 74-175 In your client's case, the only way the woman would get 1/2 of the carryforward is if the property that was sold that generated that loss had been jointly held property at the time of its disposition. For tracing the prior years' losses between H & W when separate and joint returns may be involved, there are specific rules with examples in reg sec 1.1212-1(c).

I've never encountered that. If google is correct, that error is either for an older version of QB or an incorrect data path. You are using the function to restore from the backup, right? The *.qbw is the working copy and *.qbb are the backups. The other thing I can think of is to try an earlier backup if you have one in case the one you are trying to restore is damaged in some way. I have mine set to retain the last 4 backups, so I might lose the most recent session's activity if I had to restore from an earlier one.

Yes, and for many of my older clients as well. I really don't like scheduling the direct debit through my software but may be encouraging this method for a select few that just can't seem to remember to pay the balance due with the 1040V. They are also the ones that are habitually late in paying their quarterly estimates.

Yes, similar except my client's check from December cleared but IRS still sent another notice. At this point we aren't sure if it just crossed in the mail before the next notice was generated. I try every year and most of mine just won't do it.

Yes, lifetime limits still in place.

Don't think it's required in your case. Sorry for all the posts and fixes. Having a very bad day here. Ugh!

Tom, I was playing with my client's return and made some edits to my post above. Hope it helps.

I reread your post and sounds like the return has some amount of reduced credit on line 12 and some needs to be paid back. I can tell you that I have a similar return in the works right now and Drake IS requiring the 8867 and DD entries. ETA - My client has a reduced credit on line 12 but their ACTC didn't exceed that and and still have small credit available that is being shown on the return so the 8867 and other DD notes IS required. I played around with my client's return and increased the ACTC figures to exceed the allowed credit on line 12, and Drake removed the 8867 from the filing for me but didn't give me and warning errors or messages about its removal at all, and it left my other due diligence documentation in the set if I wanted to include that in the set.