Pacun

I am checking the box or filling out the other required forms and I have noticed that if you had two months without insurance, you don't pay the penalty but efile will read "accepted with message". Or if you have someone who is paying the penalty, then you will get that. If you ignore the whole health insurance question, then the IRS doesn't if you didn't have health insurance the whole year. On the other hand, you are saying, I didn't have health insurance but I qualify for an exception or I am paying the penalty, the IRS knows and suggest that you get insurance. To mitigate your frustration, this is what the code means: "On your return there is at least one person who didn't have insurance for at least one month by the fact that you claimed an exception or you paid the penalty, so please go to www.obamacare.com to get insurance".

I have the date incorporated as 10/05/2016 and the program is giving a yellow alert. Do you mean to enter 01/01/2016 and ending date 12/31/2016 on top?

A client started a C corp on October 05, 2016. According to the IRS letter, the IRS is expecting form 1120 by January 15 2018. Which makes me believe that they requested or were granted a fiscal. Client wants to file calendar year and so do I. I have prepared the very first return with the income and expenses for October, November and December, 2016 and I wonder if I need to send form 1128 with this filing. Since this is the initial return, wouldn't the IRS automatically adjust the filing requirement to a calendar year?

Jack, maybe the tax payers don't want to skew the rules but (Maybe) the tax preparer is suggesting to report this as rental income. I said on my original post that if only the girl friend lived there... to be careful. I amended a tax return a couple of years ago because the preparer included the whole payments received by the girlfriend from her boyfriend as rental income and that included money for food. They lived in an apartment. To me, I don't see a rental situation here. What if I live in the Pacun Towers, around the statue of libety, which costs millions of dollars in rent and I have my girlfriend live there rent free... Will I have to file a gift tax return?

Insolvent is what I meant to say... not bankrupt. I have done about 5 of them and the IRS has not questioned them.

I think your approach is wrong and "home vacation" or personal use doesn't have anything to do with the situation. Do they have more renters or just the girlfriend? Let's say that you own and lived in your house the whole year. On July 1st, you started renting half of your house and don't charge for water. So you open Sch E and enter the amount of rent collected. Then you see how much you paid for water between July 1st, and Dec 31 and you enter as expense half of it to Sch E. Depreciation starts on July 1 on half of the cost or FMV on July 1st of the structure (whichever is lower). Let's say that you fixed the toilet in your room in Sept and spent $100, since the toilet is now working, you can flush the receipt. On the other hand if you repaired the toilet on the rented room in October and spent $80, save the receipt and enter that expense on Sch E. RE taxes and Mortgage interest will be 75% on Sch A and 25% on sch E. Let's say that your keys were compromised and you replaced all the locks in December and spent $500, then you have $250 expenses on Sch E or you can depreciate them on 27.5 years. You really have to think about this situation because if the girlfriend is the only renter, she just want to help the BF and she is not paying rent but paying for rent and other "services" or physical security.

For a bank to forgive a debt (on a non-primary residence), it is about 99% chances you are/were bankrupt.

I file form 982 if the client received form 1099-C and I do it when I prepare the return and send it together. Yes form 982 is a simple form but I don't know if it can be file by itself.

With that many returns (and their type) to prepare by yourself, you must be the meanest preparer of PA!!!!

Only separated parents when the custodial parent release the dependent to the other parent can one be HH without the child being his/her dependent. Deb is correct.

Wife registered a business "Let's Make Your Car Great Again, LLC" under her name ONLY. Husband is the mechanic and they file jointly. Technically the husband works for the wife. Of course the husband is not an employee because the wife doesn't know what a "perno" is, neither does she control his schedule or visit the shop because is greasy . Should I give a 1099 to the husband from the wife's LLC?

It makes sense that depreciation starts as soon and it is ready and waiting for clients. When you buy machinery and it is in place and ready to go, you start depreciating it even though your clients will get there in a few months.

As I said before... if it is your permanently disabled child, he/she can make millions and you can claim him/her as long as he/she didn't provide more than 50% of her own support. By the way child means at least son and daughter, regardless of age.

On another post, someone said that non taxable doesn't count. I don't know if it does. If your child is permanently disable, you can claim them regardless of how much they make as long as they don't provide more than 50% towards their own support.

If the property was not ready for occupancy until January, the add everything to the basis. Good point from Ringers... I always thought depreciation started until you put it in service which is the day tenants move, but I think I was wrong.

I think you have it right. He can claim her if they lived in the same household the whole year, he supported her more than 50% AND she didn't make more than $4,050. He will not be able to claim the mortgage interest or file as HH. Let me make a twist, what if the old lady was his mother? I believe it will be the same, except that he would be HH.

Give him the donation and report the gain. Do it on Sch C so he feels the SE pain. FMV or cost, whichever is lower is the rule.

Year up sent a letter to my client stating... "during 2016 you received educational reimbursements from Yearup. This stipend income is not for services performed but is a scholarship and it is taxable". The amount is about 5k and it is correctly reported on line 7 with a SCH label. When I interview this millennium, he didn't why they gave it to him... so I am wondering if he might qualify for any educational credits. He didn't attend any university so I told him he was going to pay taxes on it and that was it. I have the return ready to be efiled but I just want to check if I missed something since I have never dealt with Yearup.

I would do each property since you will not sell them in bulk. It is easier for depreciation if you list them individually.

One more question... If you take a position that it was a gift and therefore they will deduct their RE interest on sch A, will you be required as a perparer to let the IRS that you are taking that position?

A completed gift has an important condition, which is that you will not receive anything in return. So technically a child who pays his/her parents' mortgage will get more affection in return. I would not go that route and let RE interest alone.

TerryD This site is for us to discuss tax matters so you and I are just doing that. I do agree that we should file as accurate as possible but sometimes, as Jack said, you will get a CP 2000 no matter what and technically what they will have is a 1040 with a correct entry that it was a roller. No matter how we do it, during an audit, you will have to prove with bank documents that the money was put back. Do you agree that Judy has the best answer to this issue?

Since no one has answered... I would show it by using the FMV or the sales Price whichever is higher on the seller's return. I would use the FMV or the sales price, whichever is lower on the buyer side for depreciation or basis.

The end result is the same. That amount is not taxable and the 1040 will be correctly filed. If the IRS questions it, to which it has the right to do so, you will have to prove that the amount was deposited back. By the way, the IRS has the right to question every form you submit, including but not limited to W-2 series, 1098 series 1099 series. I do like jklcpa's comment so I think she has the correct answer. What do you do with a form 1098 that reads that the tax payer paid 10K in mortgage interest and you find out that he didn't pay that amount of interest and he is not qualified to get the deduction? Do you call the bank to correct it so that the form shows 0? Or you simply (technically) correct the form and enter 0? How about if your client tells that their son paid the mortgage interest and that he has his taxes prepared somewhere else? Do prepare a Mortgage interest nominee form for the son so that his preparer can see if he qualifies for the deduction?

Just change the code to G.