DANRVAN

"Corrupt? Incompentent? Or both?" Maybe both, be curious to see how he justifies $500 on his invoice, if he prepared the K-1 he should take responsibility for it. I agree with all of that. Also a call to TPP hotline might even solve it.

If you are going to file a final return with income under $600, then should probably go ahead and report on K-1 and show as an income distribution deduction. That will result in a complete and accurate tax return whether required to file or not.

I believe a "volunteer grant" is a donation from a company a volunteer is employed with - to a charity the employee volunteers for. The org. uses it for it's charitable purposes; it is not disbursed to the volunteer as in the case of OP.

Excess deductions on termination. The 2020 Treasury reg. made that possible after TCJA took it out. There is an allocation process to follow.

Probably not if gross less than $600. Still no need to file since gross is below $600, and net further reduced by legal and accounting fees. And most like there is not any capital losses or other tax benefits to pass through on K-1s.

As I understand OP, grant was made to a charitable org which then divided it up among the volunteers. While grant was not taxable to the org, I can’t see where the distribution of the grant to volunteers would be non-taxable if it was above and beyond a reimbursement. The IRS rules are strict in such matters. I would be curious in how the org. classified the distribution to the volunteers on form 990.

Most likely, although it could go several different directions depending on facts and circumstance as well as dollar amount. I would be curious as to how the org. reported the distribution to the volunteers; sounds like more than a matter of reimbursement of expenses. I think that would only apply if put on schedule C. Without any further information I would go with other income on 1040X.

If less than $2,400 , then not subject to SS on Schedule H. If paid $1,000 or more in any quarter, then subject to FUTA on Schedule H. W-2 should be filed regardless. If less than $2,400 and ss withheld, should consider refunding employee for fica since it was not required.

I don't think that is fair statement, but you are entitled to your opinion.

I That is what I have been saying all along.

Are you saying employee should file H and pay the FUTA, tax, which is the employer's responsibility? The exclusion does not have anything to do with FUTA, and I don't think I ever said it did. What I am saying is the employee does not have to make up for it; whether it was due on form 940 or Schedule H. The code says that wages paid to a household employee below the threshold are not subject to FICA/mc. Why should a taxpayer working as an employee with wages below the threshold pay into them by filing a schedule C?

Right, but that applies to employer; so would not directly effect the client of OP who is an employee.

There is a threshold for paying and withholding FICA/mc for household employees. If she is under that threshold then why subject her to SE tax unless she choses to?

Since she is under the threshold for household employees fica, I would not put it on C.

There seems to be endless possibilities here. I think estate would have burden of proof that it was already taxed by decedent. Otherwise I agree with Sara, estate steps into the shoes of decedent and it becomes IRD.

I question that. For example let’s say charitable organization distributes meals to shut ins. Meals are delivered by employees of the org. and volunteers. Employee’s and volunteers all use their personal vehicles; and are all reimbursed under an accountable plan using the standard federal mileage rate. The standard rate is bases on the estimated cost per mile of operating your vehicle. For whatever reason, IRS does not allow you to deduct the full cost for medical or charitable travel. However, the cost is still the same whether you are driving for business, medical or charity. So if a volunteer/client came in and said they received $xxx.xx from charity as reimbursement for travel under accountable plan, I would offer the position that it is not taxable income over the standard rate for the charitable deduction. Instead, they have been reimbursed for the cost of operating their vehicle for the benefit of the organization. That also appears to be the position taken by Oregon DAS as mentioned above.

Good point. So unclaimed income was received by "the state" X years ago and then paid to estate year after death. I think I will crawl back into my rabbit hole for the night.

I have not seen an authoritative cite one way or the other. However, the Oregon Department of Administrative Services claims there is no tax consequence if volunteers are reimbursed at the GSA rate under an accountable plan: https://www.oregon.gov/das/Financial/Acctng/Documents/40 Travel search.pdf 128. "Volunteers are eligible to receive a mileage reimbursement of up to the GSA rate, as identified in Appendix A. As long as the reimbursement is handled through an accountable plan, there are no tax consequences related to the reimbursement. Refer to paragraph 111 for information on an accountable plan."

That makes sense, as mentioned above $2,000 income vs $10,000 in property does not sound right for year after death. So maybe no income to the estate.

Good question.

and I was clawing my way out!

But OP specifically referred to 1099 B, That tells us that property of decedent was sold and estate would have basis equal to fmv at date of death. I can not think of any circumstance where estate not have basis in property sold.

But off hand I can't think of any unclaimed property that would not receive a step up basis and sold for $10,000. Can you? What else would the proceeds be from?

I would rely on the Cohan rule for a reasonable estimate of basis with in one year of DOD; if not otherwise determined. This is obviously not high dollar property (like real estate) that would have appreciated in value. On the flip side, I don't think auditor would have much of a case to deny it.

Maybe I am missing something, but It doesn't seem right to have $2,000 of income from $10,000 of assets.