Christian

Hardly a tax season goes by when I don't encounter something new. An older client passed on in 2018. She was indigent and on Medicaid in a home. She had a lady who had power of attorney who was selected by the home. Upon passing on the power of attorney of course had no more effect. She had executed a will naming the person with power of attorney as her executor. The attorney who drew up the will informed her there was no need for probate as the client had few assets. He further advised that since there was no one who could sign the return there was no need to file one. She had two pensions and social security income which caused her to exceed the filing threshold and showed a balance due of $608.00 which was eliminated after deducting her medical expenses. I had asked her to consult him before I would prepare a return but went ahead and did a workup for myself. I am wondering if the IRS will not send her a letter in two years about this. What do y'all think? The pensions had no withholding federal or state.

I likely worded this wrong. This is the final year. In reading the instructions for the K-1 I think the loss is placed on line 11 under final year deductions and is coded C. The loss will be passed through to the two heirs. That was my question is line 11 the correct line on which to indicate the loss?

On the K-1 Form 1041 where do you show a long term capital loss? Line 4a, line 9, or line 11.

GOOD GRIEF. I have made an error. If someone can claim you as a dependent DO NOT CHECK THIS BOX. I will let y'all guess who did NOT check the box.

You are right it's her butt. Here's a new wrinkle. If you show the individual as a dependent on his own return the Form 8962 will populate correctly. If shown as a single person the 8962 sends you to the dependent info section. Something must be out of kilter in the program. Maybe I ought to call ATX.

I feel sure you are right. She says she is going to file his return herself leaving off the required PTC form not a great choice. I am going to attempt to talk her out of that but if she does it's her pertute.

HealthCare.gov advises she needs to reprocess his application for 2018. He will qualify for a credit on his income record. Needless to say I told her this last year. Of course, no man will tell you convincing a lady of the best course of action is always successful.

Maybe he can be considered her dependent for purposes of the ACA as he lives at home ?

My thinking is he cannot be claimed a dependent on his mother's tax return as he is was 21 in 2018 and not a student. How can he be a dependent for purposes of the Health Market Insurance ? In looking at the Premium Tax Credit form I thought the 401% was clearly out of whack but the darn phone has been ringing off the hook so I have not had enough time to allocate to this problem just yet.

Quite frankly Lynn I get soooooooooooooo exasperated by these folks like her I really am lost for words. Her excuse "I did it for financial reasons". This after I clearly explained she could NOT carry sonny as a dependent ANY LONGER ! She had already slipped by a year. I am going to direct her back to the exchange to see if there is any way to rectify this mess. There's this also to consider. If a dependent their combined family income will exceed $ 80,000 plus. Further how does play out as she is company insured. It is no wonder the hair on the rear of my head grows less each tax season !

Thanks. Every year a new wrinkle comes along. Most of my folks are retired and this was an item I have never dealt with.

A client last year mistakenly enrolled her son as a dependent on the Healthcare Market Exchange. I told her she had made a mistake and if enrolling him for 2019 he would have to be enrolled as a single man as he is older than 18 and is not in school. He was 21 in 2018. I will be d----- if she did not go back and enroll him under her name for 2018. She herself is covered at work by the company policy for all 12 months. The Premium Tax Credit form shows his income of some $27,500 at 401% of poverty level disallowing the entire premium paid for his health coverage. Anyone have any suggestions? I am tempted to tell her to go to the local IRS office and plead her case. He owes some $3,300 back !!!

A couple has divorced and the former wife has sent me a signed Form 8332 allowing her former husband to claim their son for 2018. It looks like I am going to need to send a Form 8453 with the attached original Form 8332 by mail after efiling the return unless ATX will accept a pdf of the Form 8332 into the efile. Needless to say I do not know how that would be accomplished. Does anyone have any ideas on this or have you sent a pdf file in ATX ?

Thanks to all of you. The only thing I find different. There is no signature line for the former husband on the 8332. And of course his is the return I am preparing. I will be mailing the 8332 signed by the wife and the 8453 myself after acceptance by the Service.

I am wondering if in Schedule B I need place any figure or show somehow the loss is distributed. I see no need to show anything as there is no income to distribute.

A man and his wife are now divorced. As she has not worked this past year she has agreed to sign and forward to me a Form 8332. I read that his return can be efiled and then I must send in the signed Form 8332 with another form to the Service. Since there is no way to sign the efiled Form 8332 I am wondering what information I need to input on it. I am assuming his name, her name and the date she signed the original ?

I thank you for your kindly assistance. I found some material which bore out precisely what you noted. I think I have again muddled through with the help of my friends here on this blog. I plan on contacting the practitioner's help line tomorrow to firm up a few minor points. Again many thanks.

Yes Lynn this is the initial filing AND the final filing as their was no need to file a 1041 until 2018 as the estate income was less than 600 dollars per year. The heirs were having to wait until their mother's home was sold and it took three years to sell. If what you suggest is correct I can distribute the 18,000 loss and the heirs can use it up over time. Maybe I can find the info you have suggested. I rarely do 1041s but can usually do them just fine but this is something I've not encountered.

I am now preparing (grappling is a better word) with the Form 1041 I referred to in an earlier post. The estate sustained a loss of some 18,000 dollars on the sale of the house and land. My expectation was to pass half of the loss to each of the two heirs and they would use it up 3,000 per year. You can imagine my utter surprise to find I can pass on only 3,000 dollars per year and must parcel it out over some five additional years form the estate which is being closed as we speak ? Clearly I must be reading this wrong ? Any input is most appreciated.

Regular clients seem to be coming in much more slowly this season. Are any of you experiencing this ? Maybe it's all that freeeeeeeeeeeeee tax help out there.

I guess Abby they figure dead men tell no tales. Now we know where they recoup those mileage depreciation losses.

An older client passed on in December 2018. She has a remaining capital loss of about $6000 yet to be recovered. I am thinking you simply deduct the full balance on this her final return but knowing the IRS they may require some less simple method. Any input is appreciated.

I found the answer under Pub 449. Now if I can just put the link in this reply. https://www.irs.gov/pub/irs-pdf/p4449.pdf Good grief it worked.

A divorced now single man has a child who lived all year with his mother. She has agreed to sign Form 8332 releasing the dependent exemption to him as she did not work all year. He qualifies for the $2,000 Child Credit but not for the Earned Income Credit as I read the law. Is this correct?

A client has divorced from her former beloved. As a result of the divorce settlement she receives a portion of his federal pension. Her Form 1099-R indicates the taxable amount of the pension is not determined. Correct me if I am wrong but she owes tax on the full pension amount as her husband would receive his portion with a reduced taxable amount as he paid into the pension.