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That is what usually happens, that the spread in option's increase in value from award to exercise is considered additional compensation taxed at ordinary rates, and that is reflected in the W-2 wages and reported with code "V". The basis and proceeds are usually virtually the same, possibly with a small loss on 8949/Sch D for the transaction costs/fees or possibly one day's change in price if exercised one day and the sale not finalized until the following day. It is usually simultaneous. I do have one client that works for SAP, Inc that has had two years where he swore no 1099B would be issued, and I made him call the broker to make absolutely sure of this. I was sure that he was wrong, and I still don't know why there was no 1099B, but there wasn't. Still can't explain it!

Yes, changing brokerage firms for the SEP is allowed. The employer would be adopting the SEP plan of that new broker by filling out a new 5305-SEP as part of the setup, provide the employees with the required documentation, and must set up an IRA for each eligible employee. You weren't asking about having 2 running at the same time, right? Or changing mid-year? SEP-IRAs are considered defined contribution plans, so make sure that the employer stays under the contribution limit allowed for all defined contribution plans in aggregate.

Like cbslee, I would treat this as property that's been idle and put back into service, meaning to put it back into active status and use the same basis and accumulated depreciation. To do otherwise would risk losing track of the depreciation already taken that will be subject to recapture when the property is disposed of.

I actually had someone utilize a portion of the AMT credit last year, and that was a first for me in all the years of its existence.

This topic was from 2015 and the original poster had moved on to another software provider since then.

Did you realize this topic is almost 5 years old?

What Sara is saying is that the estate threshold is high at $11.58 million before the estate itself becomes taxable, so for most people there may be no need to file Form 706 even with the value of the life insurance included.

^ Yes, what Abby said. With multiple accounts, I have individual line items on the 8949 for each short or long grouping that ties back to each account, and I use a simple description something like "S/T - basis reported". The description is redundant since it shows in that section of the 8949 already.

Yes, as long as basis is reported to IRS, and there are no codes and dollar amounts for adjustments, then totals can be used. I've had some with all basis reported and with tiny amounts for wash sales that I still reported using only totals and never heard from IRS. If they ever ask, I'll send that page of the broker summary. Gain was correctly reported.

There are a few more restrictions, mostly related to depreciation, beyond using the mileage method the first year that may disallow using mileage in future years. Tax Topic 510 gives an overview: https://www.irs.gov/taxtopics/tc510

It's not you. See the topic in General Chat called "Efile Error Notice" talking about the same error.

A male duck is a drake...Drake software.

That field would be to enter the code section under which the asset is being amortized. Example - sec 197 for amortization of goodwill, sec 248 for organizational costs, etc.

Right, and you also wouldn't have the credit affecting PA that my clients have because MD and PA have reciprocal agreements. With PA having a flat tax of 3.07% and DE's top rate being higher and the fact that that rate is reached relatively quickly, it is entirely possible to help my clients lessen the overall state tax burden by filing MFS in DE and still getting the full credit that is allowed in PA.

The name on the W-2 isn't just an "in care of" is it? How about the EIN, is that also not your client? I looked at the Paymaster website and appears that it acts like other outside payroll services plus HR. I didn't see anything to indicate an arrangement like you describe or for something like leased or outsourced employees.

at ILLMAS' youtube!

I was thinking more of PA gross income that may differ significantly. PA does not have any deductions and does not allow losses. PA taxable wages are always different for anyone that has pre-tax contributions to a retirement plan. PA doesn't allow the reduction for deferral to plans like 401k and taxes that as earnings and then generally doesn't tax it at retirement unless it is an early withdrawal.

Lion gave you great advice on how to process. Keep in mind though that with all but the most basic of PA returns, PA income rules do not follow the federal and so the two states may not exactly add up to the federal income. Just make sure that you've accounted for all the items of income and that they are properly flowing to their respective state returns.

Abby Normal's post above shows why no program is a "one size fits all" for our practices. As well as checking for federal purposes, I check MFJ vs MFS for state purposes because I have PA residents working in DE and filing nonresident DE returns that allow the choice of joint or separate. With DE's graduated rate, the interplay with the credit back to other states, and splitting Sch A and other deductions, credits, exemptions, it's been extremely helpful to have the function built into the program that will efficiently and accurately create the split separate returns, and with my town being located right on the state line, I have a fair number of clients that are multistate where this may be of benefit.

Quack, quack. The program I use does the comparison and will split the returns. It doesn't cost a million and is less expensive than all but the most basic ATX version.

No, he can't do that even though they would have been eligible and able had it been done in 2019 prior to the wife's death. Any contributions after death would be considered excess contribution, subject to the excess contribution penalty each year until removed from the account.

From what Christian provided, the trust has gross proceeds but there is no "gross income" because the stocks were sold at a loss. The general definition of gross income in the tax code would include NET gains from sales of stocks, not the gross proceeds. Trusts and estates use the same definition of gross income as for individual returns, and the general definition at IRC sec 61(a)(3) says "gains derived from dealings in property" and more specifically for trusts and estates at sec 1.641(a)-2 that says this: As an example, a person whose only income is $15,000 in social security benefits of which none is includable in AGI, that person's gross income for tax purposes using the general definition is zero. If that same person sold stock for $6,000 with basis of $4,000, the person's gross income for tax purposes would be $2,000, not $6,000.

To answer your specific question, the form to use when the employer has not issued a W-2, or issued one that is incorrect, is Form 4852. That being said, when and employee finds an error on his or her W-2, the first course of action should always be to go back to the payroll department to verify the amounts used in calculating the imputed amount and to ask for a corrected W-2 if needed. Before using this form so that you don't do a disservice where the client ends up with notice and assessment based on an indefensible filing, I'd suggest that you should have the actual the lease agreement and any other forms he was given at the time of the lease that may show other charges added in such as taxes, licenses, and insurance. He should have some sort of documentation that shows what was supposed to be added in to his compensation. Also, if the lease ended during the tax year, ask for any documentation that may have charged him for excess mileage.

If I found the correct Nissan document for the employee Lease Vehicle Program dated in 2012, the imputed income is supposed to take into account the amount paid and be the IRS market value less the amount paid. The way it is spelled out in the agreement is the proper handling...if that is what is really happening. Are you sure that your client is giving you the correct figures? This is on page 5 of the Nissan document: I have 2 clients similar to yours that work for Mitsubishi, and their W-2s each have lease vehicle comp also that runs around $3,500 per vehicle with one of them leasing a total of 3 cars for his family.

Because we all don't use the same software and each of us has our own reasons for preferred methods of working within that software, and because this specific topic is apparently being given as a reference out on the internet and linked to for the public to find, I've recently removed all the old chatter and am locking the topic so that it does not continue to draw comments. If anyone has the information for any of the remaining states, please feel free to PM me directly. I'm no longer able to edit the original post that started this topic so I will inlcude any new information in another post below.