Pacun

lol. Now you really make me think about this. Technically is Schedule D but I don't have any documentation since the bank is in Chile. He said that Chile was going to charge him taxes on the profits. So I am waiting for the amount paid to get a credit on the 1040.

I have a client who opened a bank account in Chile with 20K. Then he traveled to Chile when the exchange rate was better. He then took out the money and exchanged it for $25K. He brought that money back to the US and fill out the custom forms and he held the money and later he deposited it back and then he went to Chile again and did the same thing and this time he made $29K. So he did it 4 times in 2016 and now I want to included that income about 18K on line 21. He has a full time job in the US and that something on the side. I told him that he needed to read about FBAR and to file the form. Am I on the right track? Thank you in advance.

I thought you couldn't borrow from an IRA... if you did, that was an illegal transaction and killed the IRA. If it is a Roth IRA, you will have to pay taxes and penalty only on the gains, not the basis as Rita pointed out.

I sent a VA return last night and this morning it was accepted. So it didn't even take 12 hours to process.

Well, in this case a traditional IRA will not save not even a penny...hence my suggestion for a Roth IRA in situations like this. By the way, do you have a bank that would pay some interest on IRAs? After I have suggested people have opened IRAS and they make pennies in a year. I wonder if there is a bank that will pay some few dollars without risking the money.

I saw KC answering this post and I got happy to see her again... EXCEPT that this is an old post. What were they renting? Maybe it is not material and you can just calculate the depreciation allowable reduce the basis and be over with.

Take the deduction and rest. Keep copies of the contract and the checks issued. If they are not answering his phone calls, chances are that you will not be able to get their SS#. Maybe they are in jail already... sorry, I couldn't resist.

Lion, why will you open a Traditional IRA since this is the perfect example for a ROTH IRA. She should pay the $150 SE tax and open a $1,200 Roth IRA. Changing it from box 7 to 3 doesn't change the character of the income. Why would you suggest that? No wonder he was reluctant to the suggestion. Remember that they have direct access to the barber and even the barber knows that changing it from box 7 to box 3 doesn't make a difference. You also said "without her exemption she owes SE tax". She will owe that tax even if she claim herself and her 13 years old brother OR she claims herself and her 9 years old sister, for that matter.

Do you use the software for personal use? If not, you just depreciate it while the company is open and waiting for clients.

Most likely this old lady doesn't like to live in the US and that's why she is enjoying the tropical weather of Guyana. No dependency if I were I.

You can claim dependents only in Canada and Mexico.

OK. Yes, you are Judy are correct. It seems the lady will have a hard time proving she is HH.

How old is the child? Maybe I didn't read correctly.

You are right, but isn't amazing that the IRS computers don't match on the spot? With all the horse power that the IRS computers have, we have to wait until December to be told that we left one w-2 out. DC does it on the spot and I guarantee you that that's is a good deterrent for people from India filing fraudulent returns.

The child will be her dependent EVEN if she paid 0 for his support.

The IRS computers are that way also. When you request your W-2 from the IRS they drop all pennies. Except that the IRS doesn't generate a letter for $5 or less discrepancy.

I have noticed that the IRS doesn't use cents on their reports. So when we file returns, they don't match most of the time because we round up after .5. I guess the IRS ignores any mismatch less than $5, I would say. I always wanted to ask this question but I always forget. NOW DC is enforcing the dropping of pennies. My people are panicking when they receive a letter with two columns with a lot of lines like this: Reported our records 20,230 20,230 Income 1,000 1,000 Tax liability 1200 1,199 Withheld on W-2 200 199 Refund. A few people got that letter and the first one called when we were really busy and may assistant told him that it was only one dollar less, so not big deal. The rest of the family (4 other clients) didn't come back this year. Later a client came with the later and the check asking why he was getting the letter and her reduced refund ($1). I read the letter and from now on, I don't round up on W-2 line 17 if the state is DC. I always say that DC had better computer system than the IRS but people don't know who to use and this proofs that DC is on top of fraudulent returns. They are on the spot matching the payroll records reported to them. Two people were asked to bring their W-2s to the office, so I guess those employers didn't report the W-2s to DC yet.

I am going to start a new topic which might be similar to this. I will label it... Transcripts from the IRS... maybe we should follow.

If the child didn't provide more than 50% of his own support... support has nothing to do with head of house.... let me say it again... support doesn't have to anything to do with HH. If the mother kept up a home which was the main home for her child for more than 6 months, she will qualify for HH. If not, she is single with one dependent.

Jill. then file the way you think it is correct and then file a gift tax form because he is getting a gift by paying less than FMV. You don't seem to accept the consensus on this site. Michaelmars made excellent observations: "If they break up does the girlfriend get to stay there and share his bedroom anymore? Is there a lease? Is there a profit motive?"... but you seem you want to do it the way you want. Lack of profit motive by itself doesn't exclude income from taxing but with the other circumstances of your clients, I agree that you don't have a reportable rent, but again, we only suggest since they are your clients.

10% Penalty Exception • Qualified public safety employees may take distributions from a benefit plan after separating from service at age 50 – Without incurring additional 10% tax (IRC § 72(t)(10)) COPIED FROM ILLMAS LINK ON ANOTHER POST.

If you are a firefighter or a tower controller in airport and you are over 50 years old, you don't pay the penalty. I think they are called "security personnel". See ILLMAS posting regarding "what my barber say". If you are 55 years old and you quit your job or they fired you, then you don't pay the penalty. 55 years old AND you separate from your employer.

The person receiving the money never pays taxes. The person giving it is the one that has to file gift tax if he gave to any one person more than $14K. So, technically if you give 30K to one person, you have to file a gift tax but since the uniform credit (sp) is in the millions, you will not pay taxes every if you estate when you die is less than 5M, I think.

THANK YOU... WHERE IS THE DONATION BUTON.... THIS SITE IS SO USEFUL AND YES I AM SCREAMING.

Bart, This is what I do, when I receive 1099-A, I file Sch D to report the "sale" or reposition. Most of the time, they don't issue 1099-A and 1099-C in the same tax year, but sometimes do. When I get 1099-C I file 982 or pay the tax. I have file about five 982s for houses when I have received 1099-C and the IRS has not questioned the tax payers. So, Sch D takes care of 1099-A and 982 takes care of 1099-C. As you know if both forms are received in the same year, you file both Sch D and 982.