Terry D EA

Can't, mom is very elderly and has no filing requirement.

Client received a 1099G with amounts in box 6 which are identified as taxable grants. Ths is a fellowship grant that I feel is not taxable becasue it meets the condition below. With that said, does anyone know if there is a requirement to report the amounts from the 1099G as non-taxable? I don't get an option in the software to identify what the grant funds were for or if they are taxable or not. The instructions for form 1099G say not to report fellowship grants but to follow the instructions for form 1099MISC which states fellowship grants do not have to be reported anywhere. So, is form 1099G part of the income matching system? The only other thing that makes me wonder is if this has been reported wrong by the agency issuing the grant. You must include in gross income: Amounts used for incidental expenses, such as room and board, travel, and optional equipment. Amounts received as payments for teaching, research, or other services required as a condition for receiving the scholarship or fellowship grant. However, you do not need to include in gross income any amounts you receive for services that are required by the National Health Service Corps Scholarship Program or the Armed Forces Health Professions Scholarship and Financial Assistance Program.

Thanks Judy for doing research for me. I feel embarrassed that I could have looked that up. Is too tired and hungry to think a good enough excuse? I have been at it all day and all weekend and now I think I finally have some time to grab a bite. Thanks again.

Client paid the real estate taxes for her elderly mother. Can client deduct the RE taxes paid for her mother on her Sch A? I have discussions on paying the mortgage interest and being able to claim the amounts paid regardless of who's SS number is on the 1098 form but can't remember if there has been any past discussions with RE taxes. This client does not live with her mother either.

Thanks to all who responded. It is greatly apprecited

Thanks NECPA and Judy. My initial thinking was correct with the health insurance added to the W-2 form just as Judy stated. Even though the life insurance is not deductible, doesn't it still get placed on the K-1 as a non-deductible item? I did this with a partnership and I am assuming it is the same with the S-corp. Also, if the bookkeeper did not include the health insurance properly on the W-2, then I will need to issue a corrected copy right? I just can't add it to the officer's wages and deduct it from the 1040 without doing so.

I know this has been discussed many times here but as everyone else, i am too tired to research right now. I have a single S-Corp owner/shareholder that the S-Corp provides health insurance and life insurance. Does the amount paid for the health insurance go on the shareholder's W-2 form or is this an expense to the S-Corp. Also, if the amount paid goes on the W-2 then it is deductible on page 1 of form 1040 correct? What to do with the life insurance? Thanks in advance for helping me with this. BTW- I did not prepare the W-2 form nor have I seen it yet. If the amount of health insurance paid goes on the W-2 and if it wasn't on the original W-2 then I guess I would need to issue a corrected copy correct?

I agree with replaced 27.5 years and repaired 10 years and would consider looking at the safe harbor rules as Judy pointed out.

I too print the BS, P&L, adj entries & TB for Sch C clients. As for S-Corps I do the same and make sure the RE is aligned. Some of my S-Corps are accrual so they get treated a bit differently with the review of the adjusting entries. I have one S-Corp right now that for the life of me I don't understand why they have two accounts with the same name ex: travel expense under auto expenses and another stand alone travel expense account. Same client gave me the report on some assets that were sold with no amounts or date of disposition. I guess they don't understand that the light in my crystal ball has gone out. This one will be extended.

If you use OneDesk, a return can be removed from the transmit que but as Catherine said, it has to be quick.

I think this maybe the last year I use this software. Having some issues that I am beginning to feel uncomfortable with. Send me a PM and I will discuss.

I think I have to agree with Jack. I've not heard of this exception either. Please post your source

Anyone who is claimed on a return as a dependent, must have insurance meaning the taxpayer has to provide the insurance or pay the penalty if they claim them.

Agreed, but... if the parents claimed him/her as a dependent then as Judy says, they get hit with the penalty.

HBe is required to purchase insurance anywhere he pleases as along as it is MEC (Minimum essential coverage). He does not have to use the market place. However, it is recommended due to the fact that the market place is the only place he can get a subsidy if he qualifies.

I don't like to do both nor do I recommend it to my clients simply because of the possibility of a conflict of interest. I think we should do one or the other and not both.

I agree with KC. I don't see how they can justify lumping everything on the K-1. That total from line 1 goes to a different line on the 1040 page 1(sorry line number escapes me at this moment) and does not trigger self-employment taxes. Anyone not aware of this would miss the SE filing requirement on whatever portion on the K-1 that should have been reported on a W-2.

It is so nice to see that we all are among mixed company. I too like the larger monitors and the bigger the better. I can't say I have had anything like Randall's post but I have asked clients to verify numbers as well. What I always like most in life are the incredible disappearing ink from receipts. Just have to remember not to leave them in my pocket too long.

Well I have all of the financials separate on spreadsheets from the tax return. So, maybe I go overboard with records but the tax return is one thing and financial reporting is another. I guess it does no harm to enter the balance sheet information in the tax return.

I don't have any particular reason other than those mentioned here. My software does have the box to check to force the balance sheet. I too just thought it would be a good idea even though it is not required.

Nope, not a thing about that at all.

I have prepared a partnership return that is all residential rental activities. Also, I have prepared all of the financial statements as well as including a policy for the new repair regs. The partnership is excluded from completing the balance sheet due to the income level. Would any of you add it to the return anyway? I'm thinking of doing this.

So much for hoping for a slam dunk answer which I really didn't plan on getting. I will read the two cases but as I said in my original post, I think it is imperative to know if there were jointly held assets that generated the loss and were part of the marital estate. I know one thing for sure, I have advised my client as to what my fees have totaled so far. She keeps giving me various amounts of information which is indeed helping with how to accurately prepare her return. Each time I think I have it correct, she sends me, via e-mail, more documents, changes her mind regarding claiming her son which we are now not doing and only using him for HOH purposes which I have researched and she can do this and give the exemption to her ex. I only found out last evening about the divorce agreement and settlement sheet that is very vague and contains none of the language Catherine spoke of and yes, I have combed over it several times. She is still afraid of his retaliation in some manner. I've told her that her return is none of his business and that her return will be prepared accurately and according to the law and to not share anything with him other than the 8332 form. What he does is his business and none of mine and I don't want to know.

I do apologize for the lengthiness of this post but this situation is driving me crazy to say the least. In an earlier post that involved a couple who had recently gone through a divorce and at one point in the marriage, the husband invested an inheritance his ex-wife, (my client) received and lost $67,000.00. To add some additional information, the husband is required by the court and had to relinquish his retirement benefits to my client in the amount of roughly $428,000. Part of that settlement identified the $67,000 loss to be repaid to my client with the remaining amount as alimony and cash to reinvest. No other mentions of what the retirement funds were to be used for. Due to this fact, I feel my client is not entitled to claim a loss on her tax return as she has been or will be repaid from the retirement benefits. All is well to this point. My client provided me with the 2012MFJ tax return and a loss over and above the 67,000.00 was reported and carried over. I do not know the sources of all of the loss only the $67,000.00. There were both LT and ST loss carry forward in 2012. The difference minus the 67K is $47K. No mention of this loss in the divorce decree or financial settlement statement. If this was indeed part of the marital estate prior to the divorce shouldn't my client be entitled to claim one half of the remaining total loss which would be 23,500.00 taking 3000.00 per year for the next 7.5 years? Opinions and guidance will be appreciated.

Thanks Cathy and I have advised her that my responsibility is to prepare an accurate return for her. She still wants to give up the exemption and I have convinced her that she is entitle to take the entire loss of 3000.00. I got her to agree that moving forward it would be important for the IRS to see the declining loss total from year to year. My program would not allow me to enter a less loss value unless we were using MFS which we can't for obvious reasons. So, we will be filing HOH and claiming the 3000.00 loss. Pacun, the child has never lived with his father and spends no time there. As I said earlier, he is not my client and what he does or how he files is not my concern. I have to see who paid the education expenses. The 1098-T came in the son's name and no scholarships or grants were used. Yes, I know the 1098T form is always in the name of the student. I am really tired right now but am thinking the person who claims the dependency can claim the education credits. However, my client sent me the 1098T form and I don't know where or what direction this is going yet. I will look into this tomorrow.