Randall

I haven't gotten into this yet. But it sounds like a good work around within the software. Slightly off your topic, but I assume Buildings are included in the fixed assets number? If put into service within the last 10 years? Am I reading the time period correctly, the later of 10 years or depreciable time period. So a 7 year asset fully depreciated but placed in service 9 years age would be included? More to your situation, if the multiple rentals are on an LLC 1065, Form 8825, is the election to aggregate at the entity level? Just thinking ahead. I'll have one of these coming in and they have no mortgage interest and are generating nice profits.

Thanks Eric. This seems weird. I have a client with suspended losses. The S corp is turning a corner and will have profit in 2018. The individual has no basis in his share and his past losses have been suspended. For 2018 he will have a profit on his K-1. If I understand this correctly, he will not show this income as taxable (because his suspended losses will offset) but he can then use this 2018 income to calculate a QBI deduction (assuming all other things allow so). Is this correct?

I hope it doesn't happen. Enough changes already. Extenders are a joke. Make it the law, pass it with enough time to let IRS and software companies get it done. We don't need one year laws.

Eric, did you mean before 2018? I have been looking for something on this and can't see anything specific other than the current year loss carried forward to next year. However, I did see something on suspended losses that they retain their character and are treated as 'incurred' by the corp in the succeeding tax year with respect to that shareholder. That would lead me to believe that prior years suspended losses would be treated as incurred in the current year and offset any current year income from that activity and therefore reduce QBI for the current income. Do you have any quick reference regarding losses from prior years not counting against the current year income?

I put my Roth amount on 8606 and it flowed to 1040 correctly. With another client, there was no Roth, but pension money plus an IRA. I checked the IRA box on the 1099R input and it didn't show up on 4a, just 4b. Some of the pension money was nontaxable so 4b was greater than 4a, which didn't look right. I just unchecked the IRA box and the total gross flowed to 4a, taxable portion to 4b.

Do losses only begin counting this year? If K-1 shows income, would prior year loss apply toward QBI this year? I'm assuming at the 1040 level, if individual has PAL suspended loss, then that would offset current year income or basis limitation loss from prior year, that too would offset current year income for QBI purposes.

Exactly how much info do we put on the K-1 if we prepare the 1120S? I would think if income is QBI income, we note that but if there is 179 info (or SE income for 1065) on the K-1, it would seem the preparer of the 1040 (if not the same as 1120S preparer) would know that the QBI income would be reduced by the 179 amount before inputting into 1040 199A worksheet. Does the 1120S preparer have to include on the K-1 notes how to calculate all this if the info is there for the 1040 preparer?

Yes, KY, 1065. I agree 8825. From my reading, it is a 'rental', therefore Form 8825. But for purposes of the PAL limitation, it is one of the exceptions and they can claim the loss without being a real estate professional. Short term rentals averaging 7 days or less.

And maybe Ed credits for parents?

Thanks for the info. At least I know there's no way around it. Ugh. Are you referring to the City of Milford tax office?

I don't think the RITA return is available yet in ATX. The General City return shows a place for the credit. But the instructions to the RITA return says Milford requires a return and there is no credit for tax withheld and paid to Lockland (work location). Besides his W2, wife has a home business with 7k profit on Sch C. It appears to me Milford wants their 1% because of residence and Lockland wants their 2.1% because of work location.

Thanks Margaret. I worked thru the RITA form showing the additional tax plus estimate for 2019. I'm looking at the General City return which is available in ATX.

Question on RITA. Client is a resident of one RITA municipality and works in another RITA municipality. Employer withholds local tax for the his work location. His resident municipality requires an individual return and tax for his resident location and gives no credit for payment to another RITA municipality where his work location is. The work location municipality does have a credit for tax paid to another RITA municipality. Is he just out of luck, paying to two municipalities or can he file a separate RITA return and claim a credit for the part of the tax withheld. Is the RITA return just for the resident municipality and he's stuck living in a municipality that gives no credit for his work location tax withheld?

Yes, average stay 7 days or less. Total receipts for year over 60k. Spread over all 12 months. Big loss with depreciation, mortgage interest.

KY has always allowed Sch A itemizing even if you took the standard deduction on Fed. But new Ky tax law is now limiting Sch A to mortgage interest and charitable contributions only. Still the Ky standard deduction is very low so itemizing still helps out.

Client rents out a cabin, average 7 days or less. Pays the state lodging tax. It appears this is a rental but not for purposes of passive activity loss. It is in an two member LLC. Losses to be reported. My questions: Does this go on 1065 page one or Form 8825? For Sch K-1 input to 1040, do I check at top number 3 (Vacation, short term rental)? If I check rental activity but not passive activity, ATX doesn't show the loss. If I don't check the rental activity, ATX shows the loss. If the two members are husband/wife, can both qualify for material participation if one or both are doing the related work? Do both have to qualify individually?

Ok, thanks for the tip.

Yes. Originally to be yesterday, then I saw the date pushed back to Friday. Nice surprise to see it out today. Now for the planner.

In ATX, when you hit print 1040, all six schedules print. There's no selection of the schedules to print or not print. Just as well, I too don't know where everything is so might as well have all six schedules printed whether there's anything on them or not.

Sorry, yes under Returns. It's the first tab far left. In other software, that's usually 'File'. I sent that off the top of my head.

I'm not sure what you're doing. I go to File/Change Printer and set my printer (my paper printer). When hitting the print button, my File copy printer is set to the printer I set under Change Printer (paper printer for client copy). Under Print button, for preparer copy, I change it to my pdf printer.

It ain't me, it ain't me, I ain't no fortunate one.

I thought banks only issued 1099-INT if the amount was $10 or more.

I think I understand it except when it comes to the rentals. I'll need to take a closer look when those come into play. For rentals with a loss, someone mentioned, the loss will have to be netted against any other qualified pass thru income. And the loss will have to be carried forward to offset a future profit. Is this true? Also, if the rental is showing a profit in the current year, do we have to bring forward past year losses to offset the current year profit?

I went to 365 a year ago when I got a new computer so I should have the latest. It was only $99 a year.