Max W

The garnishment should be a payroll deduction, the same as taxes, tax garnishments, union dues, 401k's etc. Since it is coming out of the employee's paycheck, there is no expense to the employer, so they are 100% wrong to be issuing any 1099.

It is called bureaucratic creep (with creeps). They have to justify their positions, so they keep inventing things for people to do, such as writing 87 pages of regulations on how to pack and ship potatoes. Budgets, instead of starting from a zero basis each year, start from the prior year and add a growth percentage to it. When politicians talk about cutting spending, they are talking about cutting the Growth, not the amount spent from the prior year. Most of that additional spending is for hiring more bureaucrats and inventing more unnecessary things for them to do.

Trust ended 07-31-17 and assets (rental property) were rolled into an LLC, or so the client thought. Checking the state records showed that the LLC (CA) was not filed until Feb 8, 2018. So now, there is a gap of 6+ months, between the two entities, that has to be filled. I think the only option is a fiscal year partnership and then a calander year LLC from Feb 8. The original trust beneficiaries were a 3 member LLC and an individual. Thanks for any ideas and comments.

An estate trust ended 7-31-17 and was to be succeeded by an LLC (this will be another thread). The preparer failed to check Final Return for the 1041 and also the K-1's. Can the return be amended by simply checking the Final box, or is there some other way? TIA

After preparing the 2553 and emailing it to them, I got back from them an IRS acceptance letter for the S-corp, dated Feb 26. I guess the question to them should have been - "Do you remember signing form 2553"? I am willing to bet, however, the answer would have been - "What's a form 2553."?

Thanks, Abby. It's good to know that the IRS is still lenient on this.

It is a moot question, now. I see that the phase out for AOC, for HOH, is $90K, which is the exact amount earned. It is even lower for Lifetime learning. Thanks for all the input. It has been very interesting.

A new client used a well known corporate organizing and legal filing firm to set up their corp. They requested that it be an S-corp. The corp was filed Nov 18, 2017, so the 2553 election was due early in Feb 1 (75 days). The reason they are giving for the late filing is that they relied on the filing firm to follow through with the S-corp requirements and since the owners are new to the corporate world, they were unaware of the 2553 election. I know that in the past, the IRS was pretty lenient about late filing, but don' know about recently. Has anyone had any recent experience and would their explanation suffice? TIA

This is sounding good, so far. Abby says it is a deemed distribution. There was nothing on the child's K-1, so would the distribution be income to the child?

The trust paid for it. There was no distribution to the daughter.

Foxit PhantomPDF allows you to sign and watermark "Copy" or anything you want and in any color. I never have to print a hard copy. I also use the signature feature for all kinds of docs, including 2848's.

I agree.

Client's daughter, dependent, rec'd 1098-T. Client earned $90K, daughter $1300. Deceased father's trust paid $5500 tuition. Any way that either daughter or mom can claim Ed Credits? I think not, but just want a back up opinion. TIA

Even if it is an unrelated party and the rental shows a loss for 3 out of 5 consecutive years, it could be classified as a not-for-profit rental. From Pub 527 Presumption of profit. If your rental income is more than your rental expenses for at least 3 years out of a period of 5 consecutive years, you are presumed to be renting your property to make a profit.

And what makes you so sure that those are secure, unless they are stored off-line, if banks and credit agencies and even the gov't and IRS can't secure their info? Practically all identity theft nowadays is by electronic means and it is done by the tens of millions. It is probably safer to just have an alarm for the office/home and just keep paper records. Locks on most filing cabinets can be breached in seconds. Then the thief has to either copy or cart off the records. One office I know of is vulnerable as there are cleaning people that come in in the evening. The filing cabinets are unlocked, so someone could theoretically copy several dozen names and SSN's every night.

Wait! Owner can be reimbursed for Home Office Expenses, as an employee, under an Accountable Plan. My only question is can the garage be included for parking the company vehicles?

Clients has a new S-corp and wants to claim home office and attached garage for parking company vehicles overnight. Is there any problem with this? TIA

Being responsible to the lender is one issue. Being responsible for the 1099C is another. The 1099C should not have been issued to the guarantor, but the banks invariable do this. Unless the bank issues a corrected 1099C, which is a near impossibility, the only solution is to wait for the IRS to issue a CP2000 and then appeal it. In fact, I´m doing just that for a client that co-signed on a $500K loan that defaulted.

Well, it is only about $2800 when you take the Adjustment. That's a little over $230/m, so a lot of people might not want to risk losing the job for that.

The first thing that struck me was that this looks more like baby sitting. or senior sitting, than health care. It doesn't look as if there is any health care, or health assistance involved and the people are not health professionals. I do have a client that pays for a person to provide for health care and other non-health tasks. He only deducts 50% of what is paid as medical. So, this could be insurance fraud unless the insurance provides for providing company and performing odd jobs. I don't know what would happen in NY, but in California you can claim that you should be treated as an employee and if the EDD decides in your favor, they will come down like a ton of bricks on the employer, with a lot of penalties. If the IRS gets involved, and they too determine that these people are employees, they can go back to each quarter and assess late payment penalties.

There is an exception in California. The property has to be titled as 'Joint Tenancy with Right of Survivorship" (JTWROS), to get the full step-up basis. A revocable living trust will do the same thing, at least in CA. Don't know about other states.

Could be a huge problem here, because basis is that of the donor. What was the mother's basis in the house? My family sold a large, 3 story home , near Boston, in 1951, for $6000. If the basis were something like that, basis would be $2000/child. Since it is unlikely that any records still exist, the basis could be Zero.

The 1040 is only a preliminary document when applying for a loan. Returns are verified from the IRS transcript. That is why form 4506-T is submitted with the loan application.

Not a problem!

Reread my post. I said I would prepare ALL the missing returns.