DANRVAN

Is son personal rep? Maybe he would at least authorize bank to release statements to you. PR is responsible for filing final tax return.

Yes fairly recently. See 501(c)(13). The are part of a bigger E.O., the Church.

Actually in this case there is no conflict. Mother is the custodial parent, she can either claim the dependent or release it to Dad's estate. His estate has no choice in the matter and can only claim the dependent via form 8332.

Sara is correct. There is no doubt that ex is custodial parent and you are aware of that fact. But you need to confirm that with her. I suggest you meet with her first and explain that she has the option to release dependent by filing 8332. Off the top on my head, I don't see any ethical issues in this scenario.

I have had clients receive payments and W-2s from DHS that were for non-foster care and taxable.

See section 131. I would make sure that the payments are in fact for foster care. Did they receive W-2s form DHS?

If they are otherwise entitled to them, but I am not aware of any exception to the dependent rules in his favor. In this case child did not live with dad for over 1/2 year, so mom would win in a tie breaker case since child lived with her the greatest number of days. But in fact, only one can be the custodial parent for tax purposes in a normal 365 day year, since the child could only spend 183 nights with one parent. If one parent breaks the agreement it is a legal issue, not a tax issue. For 2023 it looks like mom is clearly the custodial parent (unless there is some special rule for the deceased taxpayer). You might be able to navigate through form 8867 in favor of deceased dad, keep in mind mother would prevail in tie breaker case.

Interest taxable for sure. I would check it out to be sure they are not overlooking any premiums that were not paid back as dividends.

If the SSA-1099 was under the estate EIN it would be a good idea to report the gross and deduct the nontaxable portion in order to prevent an under reporting letter.

Report any taxable amount as other income.

I believe an estate is treated as any other taxpayer under section 86(b). 86(b) does not make any reference to "individual" vs estate. Instead the code refers to any taxpayer in which the taxable portion of benefits applies. Therefore in my opinion an estate is treated the same as an individual in computing the taxable amount. I have seen it and reported as mentioned above.

Duplicate the entire file, then rename it xxxxxx 2ND QUARTER. Then make sure you delete the first quarter data in the second file and start fresh with the second Now you have a new file to work with that has not been accepted; and a record of the first that has been accepted.

The dividends are considered a tax free return of dividends; any excess is taxable. But in this case did the dividends offset all the past premiums paid? If he has been receiving taxable dividends that would be an indication.

Then he needs to ask why a distribution was reported.

Box 1 should show the total distribution = amount received. Box 2a should show the taxable amount, box 1 less basis (premiums). If

I am curious if he is a Roman Catholic Diocesan Priest. Our diocese has payroll procedures for individual parishes to follow.

I answered your question on another thread, but will give you more details from my experiences. If your client wishes your assistance in this matter you need to make it clear how you will go about doing this. Most likely you will need to send a letter on his behalf to the church explaining why they should treat him as an employee instead of an independent contractor. You will also need to inform them of the requirements to file all federal and state employment reports as well as workman's compensation coverage. You will also explain the issue with the housing allowance. In my most recent experience after going back and forth, the client told me to go ahead and fix it on Schedule C.

It depends the facts and circumstances. Is it a sporadic activity vs trade or business conducted on a regular basis? Four times a year for three years most likely will not pass the sporadic test. I don't think you will find an authoritative cite to treat it other than SE.

Your second statement contradicts the first.

Easy for you to say. I have been able to help some, but on others spent hours trying to resolve cases that have gotten nowhere.

If that is the case then you will need to report it on Schedule C and then back out housing allowance. Your client probably does not want to go the SS-8 route. But that can take a lot of time an energy for someone who is only getting paid to prepare a tax return. I have been down that road before, finally threw my hands up and fixed it on Schedule C.

You really have to give the son credit for carrying out the "will" of his mother, even though it was not in her "will". Otherwise he could have personally received a benefit as an heir to her estate. I would go with that and claim the charitable deduction up to the amount of total income received by the estate. Also consider electing accrual accounting and short first year to match deductions against income.

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This is their problem not yours! If they are treating him as an employee then you should as well. I would not want the liability of making that determination for a number of reasons. They need to issue a W-2 and any state report. Since he is dual status there would not be any fica or m.c. to withhold. But that really has no bearing on how the church report his wages. Since he is dual status he reports on Schedule SE unless he has filed Form 4361. The church does not withhold for fica regardless of the 4361.