Terry D EA

I agree with both Catherine and cdslee. Those were my exact feelings, that either they don't trust me or they want to toss me under the bus when things go south.

Because of the tone of the text message and what they may be implying, I considered contacting my E & O insurance as to how they would suggest I handle it. I did the 1040X pro-bono cause I took the blame for leaving the dependent off of the original return due to lack of information. I have not charged anything to handle this at all. Firing them is something that is already in the forefront of my mind.

I am looking at using either zoom or webex to meet with clients this upcoming tax season. I'm not sure which software provides the best level of security. Any suggestions? I know Zoom was full of holes at the onset but has now tightened things up quite a bit. Still would like to know what others say.

I filed (by snail mail) an amended 2019 1040X for a client in April. An error with the 500.00 other deduction was found. Amending the return changed from a balance due to a refund. No much money but that's not the point. My client received a bill from the IRS for the tax due from the original filing. Once the amendment is processed, the tax due plus penalties will disappear. Normally, I would have told any client to pay the tax due to avoid penalties and interest and wait for the amendment to process for the return. This client did not want to pay so here we are. I contacted the IRS in August to see if the amendment had been received and if they had any record of it. The agent responded yes it was in processing and assigned to a human on Aug 28th. Told to allow 15 weeks. This client received a bill showing additional interest. Once again, I called the IRS PPL and the agent told me the same thing the amendment is still processing and for the client to disregard the bill because it will wash out and the refund will be issued. So far no problem. But... here is my concern. I have my notes that I maintain in the doc cab of Drake. This client wants copies of my notes to prove I have contacted the IRS and wants me to put in writing that I and the IRS agent advised them to ignore the bills. The client sent me a text message with this request and I told them because of what it appears their intentions are, I have no legal obligations to provide my work or notes. This sounds like the client will say that when and if trouble arises, that I as their preparer and the IRS instructed them to ignore the bills. Would any of you give the client a copy of your notes?

I have used Reimage for the last two years. Some will say that reimage is a virus. It is a legitimate program and I have had good success with it.

I got to go with Danrvan on this. If the deposit was made to the decedent's account then reversed, how does the estate get to make a claim for the refund and I also agree with the scenario he gives. So, if the withholding is returned in 2019 it would be income and federal w/h of the same amount. That gives you the right to file a 2019 tax return for the decedent which the decedent's representative could claim the refund.

Wouldn't this trigger a dispute on the client's part? If so, I think the bank would investigate the charges to see if they are indeed legitimate. I would recommend the client go to the top in the bank and then maybe contact an attorney to possibly pursue this further. The statement it is too late from the bank is disturbing. I agree with Gail, I would want to know what the definition of too late is exactly. Did they see the statement on line and immediately call or did they receive it in the mail and then immediately call. Either way, too late doesn't cut it.

Gail, Thanks for the reply. It makes perfect sense to allocate as you stated. Finally after three days of trying and being placed on hold, I got in touch with an IRS agent on the PPL who was very helpful. He was on the verge of explaining the percentage calculations when the line went dead again. I assume it was the IRS hanging up when 7:00 PM hit. The guy was trying hard to hear me but then that was it. So, I have filled out the requested 8962's and faxed everything just like they said. Now the waiting game again. Hopefully it won't take too long to get this young man's money.

Client and son came to me this year for 2019 taxes. Client listed his son with the health care market place. His son began working sometime in 2019 and his income was too high to be claimed as a dependent on his tax return. I did include form 1095-A on the client's return. No dependents were claimed on the return. The premium tax credit was calculated correctly with the amount of the over payment listed on Sch 2 of form 1040 and line 12b form 1040. Now the plot thickens. I prepared the son's return. Son claimed himself and his employer provides the health care. So far no problem. I filed these returns in July both accepted. Son's refund still has not been received and his return status is still being processed. Son now gets a letter from the IRS asking for his form 1095-A. He never purchased insurance through the market place but as I mentioned above, he was covered on his dad's market place insurance for a part of the year and the remaining time by his employer. I will see the letter from the IRS tomorrow, but I am totally confused with what to do with this.

I can tell this much. My personal return was extended and had to be mailed in. I mailed the check for the balance due with the return. In less than 10 days, the check was deposited and cashed by the IRS. Still no confirmation on the processing of the return. I sent it certified mail, got the greed card, they got my money. I guess it is they'll take the money and run and wait forever and a day to process the return. I thought for sure that mailing would have floated around somewhere in Charlotte for at least three or four months. However, it is proven this was not the case.

I too am using Drake Accounting for payroll processing. Agree it a bit quirky at first but now that I have learned it, no problems.

Client apparently overlooked (their statement not mine) some depreciable items they had purchased beginning 2016. Form 3115 with a section 481 adjustment will be completed. I don't do too many of these so I was wondering what the average invoice is for preparing these forms. Thanks!

You know sometimes these colleges get on my last nerve. The 1098-T is an important form. While I always recommend seeing receipts and statements from the bursar's office the 1098-T is important. If the son has not claimed himself and has no education credits on his return, mom should be able to claim the AOC because the son has not completed the first four years of school according to your post. If the son is over 24 and mom and he still qualifies as a dependent on mom's return then you should be able to claim the LLC. I am saying this without knowing all of the detail so I could be incorrect based on the circumstances.

Max, as Judy said Box 16D is the amount of distribution to the shareholder that affects their basis. So the answer to number 2 in your OP is no. However, without further detail the amount in 16D could contain a portion of the gain of the sale that was distributed to the shareholder. Can't determine that unless you see all the transactions and basis history detail. I don't thi9nk you would make any adjustments just enter the items in the appropriate boxes as indicated on the K-1.

Thankyou!!! This is exactly what I needed.

Abby this will be interesting. I partially agree with your position. However, if a deceased person's tax return was checked as final, there won't be a filing requirement for 2020. Or if the return was not checked as final, the decedent would not have income (maybe some would as an estate winds down) and thus no need for a personal 1040. Not sure if this would be handled on the estate tax return if there was one. A lot of unknowns. I have a check for my deceased mother and plan on holding onto it until further guidance is given. I'm definitely not cashing it. The IRS mail is a nightmare and no guarantees the check won't get lost.

I always question them and advise them as Catherine has said. I tell them I don't want any surprises in an audit. Also, if it is a new client, they get questioned a bit harder and if I think I smell a rat, then I set them free. Agree, document. I use Drake and keep notes in the client file. I add the date and time along with the details. I show it to the client for their approval.

Sorry everyone, I typed the OP in a hurry and was not very clear. So, here goes, this client purchased this home approximately 5 years ago. After living there for three years, they converted the property to rental and it has been rented for the last two years. I understand the two years doesn't have to be consecutive and I also understand that any depreciation taken has to be recaptured when the property is sold. Because it is still rental property and they are looking into selling it, I don't think the 121 exclusion applies. I understand it would if they convert the property from rental to personal use. If the 121 is allowed due to the five year rule, the depreciation would have to be recaptured which would result in a capital gains tax. I am advising my client against this because they maybe selling their primary residence as well and can only take the 121 exclusion once every two years.

Client lived in the home for three years and two years ago and converted it to rental property. They are selling the property, I don't think the 121 exclusion applies here. Need a reference as well if someone could provide one.

At the top of the general forum, Judy has pinned the all QBI posts and discussions. There is a wealth of information that will help. Everyone here has given you excellent and expert responses. However, under the QBI tab you can find resources and code references you may need. I didn't read all replies in depth but your client has to make the safe harbor election if they qualify. Depending on which software you are using, you may need to include this yourself. Drake has an election that will go with the tax return when it is transmitted.

Drake provides both Federal and State tax comparisons with each return processed. Most folks don't give much attention to tax rates. During the review of the tax return, I explain the tax rates but the looks I get suggest they are not all that interested. Usually its the folks who are investing and my larger rental clients that are concerned with tax rates and capital gain tax rates.

Exactly what I'm going to do. Gail made me take a second look at how the check was addressed. It is in my mother's name but the word dec'd was not beside her name.

I received a stimulus check for my deceased mother. I know the envelope says check the box and drop in the mail. But....I don't trust the mail and with the current IRS back log of everything, I am feeling uncomfortable just "dropping" it in the mail. Has anyone seen any further guidance on how to return this? I've read several articles some questioning the legal aspect of the law regarding returning it, the fact it is a tax credit and will be reconciled on the 2020 return, Munchin stating the checks "should" be returned and future guidance is coming. As for my situation, there won't be a 2020 return for my mother. If anything it goes to the deceased's estate. But, most estates are closed. My mother didn't have an estate due to being a Medicaid recipient. So, at this time, I'm just going to hold the check for a while Anyone agree or disagree?

I too would have never thought anything different. I guess the key word is "common sense"

I believe I read somewhere that these checks issued in error would have to be reconciled on the 2020 tax return. I think it may follow the same example of the person who has not filed a 2019 tax return but received a stimulus check based on 2018 and their 2019 taxable income is above the threshold, they will be required to reconcile that with their 2020 filing as an additional tax due. Too many scenarios and mistakes makes me glad I haven't got mine yet. I'm one of those who paid by direct draft for 2018 and have not filed my 2019 yet. Working on it but it may be a moot issue at this time to be in any hurry to get the 2019 done. I'll have to pay again so......