Margaret CPA in OH

The trust sold the property. Cash is still in account waiting to be distributed - there are family issues. Tenant moved in late March just before grantor died April 2. Trust just had fixing up expenses and utilities, taxes, etc. before sale. The expenses were repairs and cleaning, not improvements. Thanks, Tom.

Nevermind, found it. I wish I knew how to delete the post. Is it possible?

Received a code MEFOHSTATE-901. I have searched OH tax and efile websites without success. It would be great to have an easy go-to list for all efile codes. If one exists, please share!

Good reminder, Catherine. My client withheld so wasn't an issue. Pacun's client may not be happy with the additional amounts 'paid.'

A W-2 is required for the sitter to report income. Did the client withhold SS and MC taxes or was the $100 net? I have had a client for about 10 years with multiple caregivers as she has MS. She pays quarterly estimated taxes to cover the payroll taxes and I put the information on her Schedule H and issue a W-2 to the caregivers. Here they are required to be covered also by Workers' Comp paid twice yearly and unemployment insurance which is paid quarterly. I prepare those reports and client pays with vouchers as needed.

Decedent's home was in rev now irrev trust. Trustee spent a good bit fixing up for sale 7 months later. 1099-S was issued so I want to match with report. Is it just a capital asset in the trust with stepped up basis at date of death? Half the home was rented going back to 1952. I'm thinking there is no capital gain from value back then or depreciation recapture now because of circumstances but can't find direct answers. Any help appreciated! All other trusts I've done have been just cash no houses let alone rental history.

Client has received 1099-LTC with reimbursement benefits paid in January 2011 for his mother who died November, 2010. I cannot figure out any way to report this as her final return was 2010 and it doesn't fit to file 8853 on his. Just ignore and wait for a possible letter? It was reimbursement at least and not per diem.

Thanks, Gerald, for some history. I know it is paid with the 725; that's how I knew there was a payment due. My beef is that it takes into consideration the net profit which is also taxed on her personal 740. Given your explanation, I guess it is much less worse than it could be. At least in this case, I think Ohio is fairer.

It isn't the same in Ohio. As the income is either disregarded for a smllc and included on Schedule which is part AGI, the starting point for Ohio tax or pass through on a K-1 with no filing requirement and separate tax with only in-state members/shareholders, it gets taxed once at the state level with no minimum for tiny businesses. There is a Commercial Activities Tax but that begins at $150,000 gross receipts with a tax of $150 until gross receipts reach and exceed $1 million. I just think this KY tax is onerous.

I have a new KY client (I am in Cincinnati) who just started a SMLLC. I am surprised to see the KY requires a return for this with a minimum tax of $175. For 2011 she has a small loss having begun business late in the year but expects a profit in 2012 and beyond. I think it unfair to say the least that she, with a profit, will not only pay with this but on her personal return. Am I reading this incorrectly?

With an S-corp split I did a few years ago, I knew, as you, the end result needed. So I backed into the appropriate percentages to input to allow the software to manage the figures. I made sure the calculations for support were well documented and asked a colleague to review as well. The shareholders were satisfied with the explanation and the support calculations and, with no contact from IRS, I believe IRS was satisfied as well having received a report of the actual transaction.

I input deductible IRA for clients in ATX via bunny hops to IRA worksheet, entered contributions to traditional IRA's, it shows on page 1 as deductible but also shows on the Roth Basis sheets and the carryover info as Roth IRA's. Any clues or hints? I want to get this out and filed but it doesn't sit well for carryovers to be wrong.

Margaritas go great any time. Like Mondays at El Coyote when all are half price. And I can walk home. I've had the odd business meeting there. Always a gooooood outcome....for both of us.

I checked on the other forum. A couple of others wrote with the same issue. Here is what I wrote: First post: Same thing here and called Efile Help Desk, referred to another number for Efile payments (no help), told to call 800.829.1040, waited 20 minutes on line with Ms. Johnson who researched and said it was not on IRS end and to contact software provider. So here it is and I will try tech support, too, I guess. Second post: I just got through to tech support. Sherrie researched and found that this happened last year for extensions but mine was the first report for returns. I sent the return to her, she will relay to development and reference these other posts and get back to me. Let's hope something is resolved soon! I think this confirms your experience. My concern is that my client wants funds withdrawn on April 2. I think I might send a voucher with the caveat to watch his bank account and send the voucher only if it isn't withdrawn by the 5th. Still plenty of time but what a pain.

I'm not telling what I did or didn't do but I did laugh - a lot :spaz:

Indeed, KC, it is sooooo good to have you back in whatever way possible. And Laugh of the Day has helped many of us get through the day with a smile instead of a grimace. This was a particularly good one as I have experienced similar situations much to my dismay. I am glad to read of others who can relate.

Hmm, depending on the business, could it be uniforms or other work clothes?

Thanks for concerns. I am just east of Cincinnati and there was major damage about 10-15 miles further east with deaths. Somehow we were in sort of the hole of the donut. In church this morning several people lifted up family, friends and co-workers within about 25 miles who had suffered significant damage to property. It's a scary time of year.

Would that all our issues were so easily solved - closing, opening, closing, opening... Just glad it worked for you and a good reminder that maybe sometimes that just might be all that's needed. I need to shut down sometimes, too, to sort things out.

Yeah Kea!!!

Thanks all for these really good ideas. Lion, I will create a sheet based exactly on the text and have her complete it but fill in first the student loan amount as his provided support. Let's see where they end up. And you're right, Jack. Even with reducing my practice, I'm not ready to throw in the towel and really want to avoid any of that manure!

Thanks, JohnH, for this suggestion. I will use a modification of it. This person is also my insurance agent, her husband's S-corp is my client, and they have an LLC with rental property as my client. And she is my faith buddy and monthly Margarita pal. I know, I know, too incestuous but it is what it is. We've been through other trying times so will likely weather this one, too. She certainly isn't using me these past 15+ years but I know it will be a financial blow. Maybe she will try someone else and I really don't know everything (can you tell?) - her choice to make and I will offer. Thanks again!

According to the QF summary, LLC can be claimed for a dependent for undergraduate or graduate education. And in the Student Loan Interest section, it states that the interest deduction would not be allowed when the parents claim a dependency deduction and the student takes out the loan because the parents are not legally obligated to repay. However, "it may make sense for the student/child to take out the loan when payments will not be due until after graduation, at which point the child will likely no longer be claimed as a dependent and can, therefore, deduct the interest on his loan." But I guess if the loans total more than half the support, he could not be dependent as the borrowed funds count then, not when repaid. That seems to me that he does qualify from both those perspectives and seems to be clear that the loans can be in the name of the student. But I do believe that the total is pretty clearly more than half his support. I think it would be easier to swallow and for me to explain that the money refunded to him was in excess of the $3700 dollar limit but am not sure that it counts as 'income.' She won't be a happy camper but I don't think it's possible to exceed even the lower amount as 50%. Sigh, because he had no income outside of $56 in dividends, this credit is totally lost. It's a shame that he worked so hard to get this far and arrange his life to be able to finish this degree without having to work and now there is no benefit to him or mother who is providing the home. I suppose he didn't have to choose such expensive education.... Thanks!

Client has 28 year old son living at home finishing doctoral degree. He had no (wage) income in 2011, qualified tuition and other charges of $17,958, nonqualified charges of $1541 and student loans of $23,716. And $4217 refunded back to him. Is the refund back to him 'income' in excess of $3700 which would kick him out of qualifying relative status? QF says "Borrowed funds used for support are counted when support is furnished, not when repaid." But does that apply here? The real issue is more than half the support. So is the education portion of support only the qualified expenses? That plus the unqualified expenses? The total of the loans minus the refunds? I'm already getting some kick back because the client 'cannot answer (my) questions about how much it costs to feed him or provide shelter.' He makes a lunch EVERYDAY (her emphasis) so I assume that she provides all the fixin's. He became engaged in 2011 giving a huge rock to the intended but I wouldn't think gifts would be part of total support - or would they? And I haven't any answers yet about transportation costs (school is about 15 miles from home) or entertainment with intended or travel to and from end of state where she lives. I may lose a friend with this as it would amount to about $2000 with the income tax savings and LLC education credit, depending. And she owes $6000+ without it already. I hate it when things are, to me, a bit murky. Any guidance appreciated!

Congratulations, Ron! Hope you are in compliance ^_^