jklcpa

already took care of it

Sorry, I thought my posts would be helpful for some. Since they are not, I took my posts down. Everyone should check with his or her clients' states dept of revenue websites and states legislation to determine proper handling of the unemployment income.

As Slippery Pencil posted above, the IRS has revised its worksheet for calculating the unemployment by using the literal writing of the word "section" contained in sec 9042 of HR 1319 rather than Congress' intent. What this means is that the $150K AGI limitation is computed by excluding all of the unemployment. Here's the IRS page that contains the updated calculations for the worksheet. Scroll to the bottom. This page was updated as of today: https://www.irs.gov/forms-pubs/new-exclusion-of-up-to-10200-of-unemployment-compensation

Your thinking is correct. Taxpayer will need a qualified appraisal to determine the FMV. The client ends up as both the seller for the cash received and the donor for the excess of FMV over the selling price. Basis is prorated to between the portion sold and the portion donated. This has a pretty good summary of how it works: https://www.ccim.com/cire-magazine/articles/287370/2013/03/real-estate-gifting-realized-bargain-sales/

That may have already been fixed. I filed at least one where this was the case and have not had any rejections this season. There were rejections for returns filed with forms 8917 and 8962 that the IRS needs to fix though.

From Drake's and other providers' announcements (not ATX so far), the software vendors are awaiting clarification from the IRS regarding the PTC calculation.

From the IRS later in the year, as others have said. The problem with getting it from IRS is that it will not show the state wages or state withholding, so you'll still have to obtain that from somewhere else.

I'll be moving this topic to the TW forum shortly.

Welcome to the forum. The above posters are talking about Taxwise software. Drake updated its software about a week ago. ATX has a projected date for its update closer to the end of the month, the 29th iirc.

If the numbers aren't changing, I wouldn't amend to add an indicator. Perhaps a call to the practitioner priority line would be the better option where the agent may be able to add the indicator or notate in the file so that the return can be continue through IRS processing.

cbslee, sorry I misunderstood. I see now that you weren't talking about a new PPP loan but an existing one. Do you have any client's who have started repaying their PPP loans, or were they all forgiven?

What kind of documentation did the client receive for this? I have a client that received a loan of ~ $80K in early May, 2020 that was supposed to have a monthly payment of ~ $4,400 iirc, and afaik he has not received any bill or any other correspondence, and has not made any payments as yet. In fact, he has someone looking into figuring out who the actual lender was in order to ask for the forgiveness. When he was first approved, he thought he understood that proceeds were supposed to be deposited within 2 weeks, but he kept asking his banker about it because there was delay and no one could figure out why or who to contact. I think there was some issue where the loan processor wasn't the ultimate lender, or something like that. It was early on during the time when the small banks first came on the scene and then the next day or so many pulled their applications back temporarily until additional guidance was issued by SBA. I'm just glad I declined to be involved in this process.

I see where H.R. 1319 has changed PTC to no repayment of excess APTC for 2020 and made changes for 2021 and 2022, but I don't see a change anywhere in the bill that modifies the definition for "household income" used in sec 36(b) for calculating the PTC allowed on a 2020 return. That calc starts with AGI and makes modifications only for: untaxed foreign income, non-taxable Social Security benefits, and tax-exempt interest. If you have a cite that adds the nontaxable portion of unemployment to this list, please share it so that I can finish the affected returns. I think this is one of the clarifications we are waiting for because the bill didn't address this as an add-back of the non-taxable portion of UI like it does for the other 3 items to arrive at MAGI for the PTC.

Agree it's more complicated than it used to be. Here's another from JoA, starting at the 3rd paragraph, that explains the dates for electing to waive the carryback: https://www.journalofaccountancy.com/news/2020/apr/guidance-nol-carryback-tentative-adjustments-coronavirus-cares-act.html

Not true. I have clients that didn't take the max APTC during 2020 and will have an additional credit on the return if the IRS determines that UI is excluded from MAGI for this purpose.

Right now we are also still awaiting guidance regarding the PTC and whether or not the MAGI should include the unemployment income or not. This is one of the items that the IRS has to make a decision on, so there is more involved with this area than just allowing an override of a penalty.

One of the problems I had with the whole process was that a business had to take the full amount it qualified to borrow according to the data in the application and didn't have the option to borrow a lesser amount. I had only one client call to ask what the monthly payment would be if borrowing the eligible amount. I'm sure many borrowers didn't consider that and assumed the forgiveness would be an easier process.

Does ATX have the option to generate and send form 9325 automatically? Drake will do this by simply entering the client's email and checking a box, and it auto-generates and sends that form when the IRS accepts the return. This all must be filled in before e-filing. I tested it on my own return but generally don't use it for clients because the email looked too generic, and with the form's attachment, I thought some clients would be suspicious that it was a scam or some virus-infected document. The email sender is noreply@drakesoftware dot com, and if the client responds to it, the system will route the email back to the preparer set up in Drake's Enterprise Office Manager. It's also possible to set up to have the software generate the 9325, not auto-send, and then the preparer may choose to print the form to paper or pdf to supply to the client.

I'm sorry to hear this, and of course I'll join in the prayers for your daughter.

Mom and son are both clients and mom thought she'd slip it by me to sign the e-file forms for her adult son. I guess she thought I wouldn't notice that the signatures are all in the same handwriting and that she returned them all together in the same envelope. She tried to lie and say it is his signature, but didn't have a response when I told her that the signature is vastly different than that of the prior two years. All of a sudden she remembered that he won't be able to sign until next week because he is on call for his job, so that is the real reason she tried to get this by me. What makes me even more angry besides the lying is that this person is a bank officer and definitely knows better. I may just fire her because of this. ETA - and when I say "adult son" this guy is 34 years old, not a child that recently reached the age of 18!

You'll have to look at the partner's detailed instructions for each item, decide if it applies to your client or if your client needs to file the forms that these relate to, and enter each item directly on any of those forms' input pages.

I don't think it was anything I did and have asked Eric about it. I wonder if it is something built into the forum when a very active topic has a lot of replies.

A little déjà vu? Did you try marking the return as filed by ERO only?

One of the requirements to be qualified property under sec 199A is that it must be held and available for use in the trade or business at the close of the year, and this may be why the program is stopping the deduction. I think it is available at the close of this person's tax year because the tax year for the deceased ended on his or her DOD, but you may want to research this or wait for someone else here to chime in. Perhaps someone else has run into this, because I have not as yet. Rather than marking this as disposed of and not calculating gain, you could try indicating that it is out of service and see if that correctly calculates the depreciation and still allows the QBI, or override the depreciation expense and not indicate out of service at all to allow the QBI to calculate. Sorry I can't be more help.

Delaware's calculation has also been corrected as of last night.