Margaret CPA in OH

Very much missed for many reasons...

If I enter what the 1099 shows, I can just enter the bottom line total with the appropriate box they list on top. Each has the corresponding box with basis shown, A or D. Nowhere is there a code W, just the verbiage I mentioned. There were no prior year sales or, so far as I can tell, any other sales until these holdings were liquidated in 2013. The client has provided a spreadsheet showing original purchases and all reinvestments taken from statements. I think I will just list as the statement shows with the code the statement says to use. Just seems weird to have the listing this way. Thanks for the help!

I'm not clear on how to enter it, then. They have completely liquidated the account do perhaps that is why those are listed under short term. I am not listing these as separate transactions, right? It seems the additional days for holding have been taken into account when the sales were reported. There are also a couple listed on the long term list with basis reported. They show 600+ days added with purchase dates within a month of sale but in the long term listing. Should the entry be something different? Do I need to isolate these and indicate wash sale?

On a limb here: I wouldn't use it because I would deem it a breech of client's confidential records (those records with that ssn). Call your EO insurance company to be sure.

1099B shows several sales including 3 "Wash sale: 354 days added to holding period FIRST IN FIRST OUT" and 323 days and 295 days. I've not seen this before. Correct way to handle? What does it mean to add days to holding period?

Which you both correctly reported as barter transactions per IRS Tax Tip 2014-26 which arrived in my email box just a bit ago. http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Bartering-Tax-Center

I think it has to do with trying to be distracted from the piles of stuff we really don't want to do at this moment.

Karen, that would be me and 1099C and Form 982 and all related stuff! You are not alone!

David1980, that makes perfect sense! My old eyes must have been glazing over at that passage. I have read the pub but admit to not digesting every word. I still then am foggy on where/how to reduce basis. If I do this before disposal, do I change it in Fixed Assets before the 4797 calcs? If so, as I posted earlier, he would show a gain of $47,000. That plus including $87,000 of COD would be impossible for a tax to pay. I clearly am missing things here. Thanks for whatever help you are willing to provide. I did send him the insolvency form to complete. We shall see what that reveals!

Thanks again, Tom. I reread the 982 instructions. Line 1d mentions the amount excluded limited to ...(as of the first day of the next tax year or, if earlier, the date of disposition). I think 'if earlier' is operative here so it seems 982 is included in the 2013 return. The fog is a bit less hazy now, but not much! I look forward to your later reply and, again, thank you so very much!

Okay, new technique to learn - screen shot and email to self. On my list

I really appreciate email because I can save it easily into their file as a pdf. What do you do with texts? I have only a couple of folks that even know how to text (I just got into it this year) but really don't want info that I cannot save somewhere besides my phone for future reference.

Thanks so very, very much, Tom! This may seem simple to some but not so much to me. And I never expected any of my clients to be faced with this. I input the sale data and arrived at ~ $24,000 loss. There was a PAL adjustment of $26,553 from Form 8582 for special allowance for rentals with active participation the standard for which I believe he met. I will have to ask him to complete the insolvency worksheet but my guess is that he was not insolvent when considering retirement assets. Of course, if he had to liquidate everything to pay the tax, then he would be insolvent. I reread the qualified rp business info and think this works. However, in the example it mentions that the basis in the depreciable property must be reduced by the cancelled debt. So does that then mean that the disposition of the condo must now be changed to basis of $135,090-$87,881=$47, 209 and then the sale is $92,000-$47,209 and thus a gain of $44,791? And how does Form 982 data enter into any calculations? I just don't see where the data flows. The examples in Pub. 4681 all seem geared to principal residences. I sort of understand the first one but not the others. And I have no understanding about your comment that "the 982 reduction in tax attributes does not take effect until the first day of the new tax year for the client. DO NOTHING WITH THE BASIS AS A RESULT OF THE CANCELLED DEBT IN 2013." He owes $21,000+ without something on 2013 and I know he cannot pay it. Does he just owe and owe and wait until filing for 2014 to do something with this? I so appreciate your time and assistance. I think if I have any more of these, I will pass!

I've been doing that for about 5 years now. Best idea ever! I have a ScanSnap right at my elbow. It was about the best investment I have made to date.

Thanks, cbslee! So this disposition does not go on 4797 at all? What about the Sec. 1245 assets put into it (stove, refrigerator, etc.) when rented? Is this also capital, not business? Is the basis reduced somehow on those items or only the condo? For the condo basis, do I reduce the adjusted basis (after depreciation) by the 1099C amounts or only the first from the first mortgage or both mortgages? Then to enter on Schedule D, use whatever that reduced basis is for the basis? Closing costs were $5700. How do I get the assets off Fixed Assets if I don't use 4797? How do I arrive at the number on Line 4? How is that different from Line 2? If this is now back to principal residence and capital, how can I consider this business indebtedness? So sorry to be so dense. I am obviously missing some very obvious details (to others) and can't see the forest for the trees.!

Does it have the disclaimer about 'no goods or services were provided' language or similar? Our statements list the dates and amounts and totals for each fund at the bottom. To my knowledge, however, there has never been a "Total Non Tax Deductible Amount" listing. I wonder how/why they keep track of that.

Yes, he used to live in it but it has been a rental since October 2010, so 2 1/2 years. Because it was rental and the second mortgage was obtained after it was placed in service, wouldn't it be business property? Why wouldn't it be 4797 when depreciation has been taken for the rental period? If it would still be considered personal residence, how do I dispose of the business part? I still don't understand what to file on 982. I have read the instructions and Pub. 4681 but I still can't quite get it. Thanks for guidance as I am just not comfortable with this at all.

I just can't follow the instructions for this stuff. Client had condo but was relocated with job. Client couldn't sell in 2010 when moving so rented. Client lost job in 2012 finally getting another paying half. Result was that condo has to be sold for way less than hoped as client could no longer subsidize expenses. Condo basis $150,000, dpn $14,090. Contents $1200, dpn $883. Selling price $92,000. First mortgage 1099-C, $57,023; second mortgage 1099-C, $30,858. I believe this is qualified real property business indebtedness, right? I am confused by the reduction of tax attributes Part II. I found the data entry on Other Income for the 1099-C additions but not where or how to take out the amount excluded or how to account for any reduction to the amount excluded. Thanks for some hand holding here. I know several of you have been through this but this is a first for me and, frankly, I am lost.

Maybe this will answer my similar question about KY unemployment benefits paid to Ohio resident.

I would have to override the ssn on the form and the filer's name would then not match the ssn. The each do have foreign source income hence the need for two 2555's, one for each. For the filer, I have checked the box for filer and the name and ssn carry over. For the spouse, I have checked the box for spouse and the name and ssn carry over. But the message says the second 2555 (in this case for the filer) must match that of the spouse. It has been entered but carried over from the data entry. As noted, I have deleted the second 2555 and reentered all data with no effect. Next option, delete both and re-enter all the data, not my favorite thing but.... Thanks for suggestions. If the total redo doesn't work, I will configure my schedule to be on hold for a while

Hmm, these have been rolled over since 2003. But I did as you suggested anyway with no change. I deleted the second 2555 and input data on the FECWKST and reentered. No change. The SSN on the second form is entered, I see it in the box. It, of course, does not match the spouse because it belongs to the filer whose Form 2555 this is. Other ideas? It would be a nuisance to have to paper file when efile should go just fine...but for this. Thanks for suggestions!

Clients in Australia both have earnings in 2013, just one in 2012. Filed smoothly for 2012. For 2013 I get an error message "The SSN on the second Form 2555 MUST be entered, and MUST match the spouse's SSN." If followed exactly, then the filer would have 2 Forms 2555 not one for filer and spouse, right? When I click on the field it takes me to the data sheet showing both SSN's but what is shown on the second form matches the person's ssn, not the other one's. Any ideas?

Anyone know this answer? It just seems weird to not file and pay KY tax on KY income but...

Ahh, good to know it isn't only me. I've had 3 Schwab trust accounts with the wrong code on every one. Because the dates are listed and I figured the software will want the code they show to match the dates, I input the code with the correct description. All efiled fine and I am assuming that the dates will be the controlling factor in the long run, anyway. There weren't too many entries so I just entered all transactions.

That happened to me, too, so I just did again. Second time changed the version and all seems to work fine now at 13.4.2.35. Goblins? Identical setup to yours.