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Grandmabee is correct. The way this actually works is that it is all accounted for and reconciled on that year's return even though the excess is paid back (or refund received) in the following year. The adjustment becomes part of the calculation for the deduction on Sch A or for SEHI. Here's how it works: the total gross premiums for that tax year are reduced by the actual PTC that is allowed as calculated on the return. not the amount of advance PTC that was claimed during the year. What that means is that if there was an excess claimed throughout the year, the premiums paid by the taxpayer out-of-pocket should have been higher, meaning that the Sch A medical deduction or SEHI are that much higher. If the return shows that the taxpayer could have utilized more APTC that results in an additional refund, then his out-of-pocket for premiums should have been lower during the year, and therefore the Sch A medical or SEHI would be that much lower. The tax program should be doing this automatically for you, but you should check to make sure this is how ATX is handling it. My program does do this automatically, but I no longer use ATX. If that isn't clear, here is an example: Total gross premiums for year: $12,000 APTC utilized throughout year: $7,000 Taxpyr prems pd during year: $5,000 If the amount of APTC used was the exact correct amount, then the taxpayer has a deduction of $5,000 for Sch A or SEHI purposes. If the taxpayer should have only used $4,000 of credit during the year causing a $3,000 payback, then the share of premiums he should have paid during the year should have been $8,000, and that amount would go to Sch A or to SEH I even though the $3,000 payback occurs in the next tax year. If the taxpayer was entitled to use $9,000 of credit and therefore has an additional refund of $2,000 on his return, that additional $2,000 effectively reduces the $5,000 of premiums paid down to $3,000, and only the $3000 is allowed as a deduction on Sch A or for SEHI.

Has your state waived that requirement? How can anyone be actively seeking at this time except for those that work in essential businesses? I haven't seen my state's online app to sign up for benefits, and I'd assume that the app still has all the standard language as usual, but on the main page of the site it states that that requirement has been waived for applicants whose employers were forced to close because of this shutdown.

Yes, if she doesn't file anything, then the stimulus check would go to the bank on file where other benefits such as SSA, SSI, or VA benefits are paid. How about setting up one of those online-only checking or savings accounts with a nominal amount to open. Would that work? Edit - one I just checked is Capital One. Its "360 Checking" is completely fee free, does not require money to open, and comes with a debit card that is sent by mail. Main link is here: https://www.capitalone.com/bank/checking-accounts/online-checking-account/#id_why360checking and from there check out more account features and terms.

I think it would go to the same account, and the government isn't to grab those funds for outstanding tax debts, but I don't see the bank benig able to make a distinction of those funds if going to an account where funds are automatically garnished. If that is her only income, I'm assuming she has no filing requirement? Drake came out yesterday with the way that those "simple" returns are to be filed if there is otherwise no filing requirement and that would allow for direct deposit information to be entered. If this would work, could she possibly set up a separate account with another bank specific for the stimulus check that she could draw on? That still won't allow her to request a paper check, and that's my only idea and not sure this is possible for her. Maybe someone else will offer another option.

I think that was somewhat addressed with the SECURE act when the RMD age was raised to 72. QCDs could still be made directly to the charity for those over 70.5 but without a "required" distribution, the QCD couldn't be used as an offset. I would assume that the same applies to the CARES act too, but all I could find on it so far is a 3/30 article in Forbes. See "How Does This Impact QCDs" here: https://www.forbes.com/sites/jamiehopkins/2020/03/30/cares-act-drastically-changes-required-minimum-distribution-rules-for-2020/#3eb1b00519a0

Thank you, Dan.

I'm happy to have helped solve the puzzle.

OK, I looked back at the pdfs you posted. Is there a 4th rental with income of $3,091? I think this return is probably correct. Property A had a current loss of $1850 plus the suspended losses bring it to a total of $44678. There's some sort of worksheet you referred to that is netting all of that with the gain from its sale of $174928 to arrive at a positive number left over from the gain to apply to the other rentals that also have losses (current and prior coming forward). That number is 130250. That figure is what is allowing the carryforward suspended loss on property B to be deducted in this year. That positive balance is allowing the current loss on property B plus its suspended losses to also be utilized in 2019. Those losses total $45231 Then there are properties with net income: property C of $165, and another that isn't shown on the schedule you shared that must have income of $3091, All of that nets out to the loss allowed of $86653 (-44678, -45231, +165, +3091) The other schedule you shared was Schedule 1, line 5 showing a net loss from all Schedule E activity that would include the K-1 activity. The figure on line 5 is -3893. Does the K-1 for being a physician have ordinary income in box 1 of $82760 that is shown on page 2 of Sch E?

I think we aren't communicating fully here. All the rentals are passive. The distinction of "active" or "materially participating" each have their own limits on losses, BUT losses should be allowed in full on the property that was fully disposed of regardless of the designation. The gain may also be sufficient to allow some, or all, of the losses on the other rental because that is also a passive activity loss. The K-1 activity for his physician business is non-passive income and does not factor in to the passive losses allowed. In your first post today concerning the K-1 income you wrote this: "the gains from the S Corp K1". Are there some sort of gains on the K-1, or does the K-1 only show ordinary business income in box 1?

Possi, if there are gains on the K-1 that are related to the non-passive activity of being a physician, then those gains would also be NON-passive. I agree with Gail that you should have a way to tell the program to NOT allow those gains to offset the losses. Only the gain on the sale of the one rental should be what is allowed, so that should be the amount of the losses used, and the rest of the losses should carry forward.

Same question that Tom asked. Is the K-1 income passive? That is the key.

I've always reported these costs exactly as Dan has described too, that is as long as they would have qualified as additional basis or expense of sale. I'm not sure whether or not there is some authoritative source for this handling though, but this is how I've always seen it handled.

@Christian ,there are a couple of other good posts with ongoing discussions on this same topic over in the COVID-19 subforum that you might want to read also. I'll be moving your topic there in a little while.

I don't mind deleting the links, but when I clicked on the first link I was able to view the entire 11-page document. The second link took me to an email that I've deleted and included the modified contents without links and that removes the ability for anyone to unsubscribe you. If that isn't sufficient, please let me know.

Thank you, Lynn. This is good news for those that don't need to file, but that leaves the question about my clients I was trying to help and other seniors that do file and whose 1040 always shows a balance due. Will IRS look for the direct deposit information on file with SSA?

Thanks for the heads up. I fixed the link in Lynn's post to go to the proper page, now found at "sm967".

Thanks, Gail, that does make sense in a way. I'm going to drop my suggestion and see if some family member will be able to help these few folks when the "portal" becomes available.

That's an idea but I have several returns like this where the clients are elderly and have never used the internet. I was trying to come up with the easiest solution for all of these people and me at this point. Plus, you know how many older people worry, worry, worry, especially when it comes to money.

No penalty if the withdraw is for the excess contribution and any earnings on it. It's as if the excess was never in the account. Total distributions including any excess and related earnings withdrawn would be entered on form 8889, line 14a. Then the amount of the excess contribution and its earnings that were withdrawn would be reported on 14b, distributions for qualified medical expenses on 15. Any earnings withdrawn are reported as "other income." So we're all on the same page, below are instructions from Form 8889 that I referred to earlier. The instructions for Form 5329, line 47 say the exact same thing too.

Client always has a balance due so IRS does not have banking information from any return. If client wants direct deposit of the stimulus check, could the client set up a nominal 1st quarter estimate withdrawal authorization to be transmitted with the e-filing, and would the IRS use that banking information for the stimulus amount too? Any other idea besides waiting for this "portal" that's supposed to be set up?

Give it a couple of minutes and someone will disagree.

From your description, I'd deduct the costs if the course work maintains or enhances his current role and as long as they do not specifically qualify him for a new position or other job.

The excess contribution and any earnings can be withdrawn before the due date of the return. Page 5 of the instructions for From 8889 covers this. Look at the section " Excess Contributions You Make".

My client copies do not have the SSNs masked in Drake. The only thing I've noticed where the SSNs are masked is on the main demographics page of the organizer. Masking SSN, EFIN, and PTIN on the client and preparer sets is an optional setting found in Setup>Options>Calc & View/Print tab.