Tracy Lee

TP's wife who has lived in the US for 30 years (green card) starting receiving her Japanese social security this year. She says she doesn't have to pay taxes because it's taxable in Japan even thought she paid no taxes on it because it's below her filing threshold. I have other clients in similar situation from UK and one from Norway and they always report their small incomes and pay taxes on it. From my research the Japanese social security is taxable here in the US. She does not go to Japan, has no home there or job either. Is there any other reason it wouldn't be taxable? Otherwise it is right?

So lets assume he is correct, will a corrected 1099 R be required to file or is there a way in ATX to show that rollover so it is not taxed?

TP received a 1099 R for $227,701.42 (annuity) with a distribution code of 7D showing all of it as taxable. He is insistent that it was a rollover into another account, so the code is incorrect. I have asked him (twice, he's 92 and confused) for the first statement for the company it was rolled over into to show money out and money in. Can I send that as an attachment and do a rollover explanation in ATX and put 0 in box 2a showing it as not taxable? I can't seem to find any other way around this to show it as not taxable without waiting for a corrected 1099R. What is my best option with this, especially working with such an elderly man who keeps bringing me the wrong information.

TP has finally gotten a significant settlement for the principal home that was destroyed in the California Paradise fire. They were told they could write off the $220,000.00 (gross) they received against the Sale of Principal Residence because they lived in it for over their 2 years, it was their only home and it burned to the ground. They did receive insurance money in full for replacement, moved, and are building a new home in Oregon. All I can find is that the house that burned down becomes apart of their basis (money & time) for the new home and there is no exclusion allowed. Does anyone have any experience or wisdom for me on this?

I have a client that purchased a 2021 Toyota Prius Prime and wants the Qualified Plug in vehicle credit. I have gone to multiple IRS sites and the US department of energy site. All I can find is that the credit phase out initiated for this model started but I can't find out much else. How do I know how much credit to take or if they can even get the credit? All the IRS websites just seem to go around in circles?

I am aware of the legal fees being taxable. We are not sure which direction they are going to take. Lawsuit is based on whistleblower but they are trying to stay away from that and use other stupid reasons. They have already paid out two other whistleblower cases and has another suit pending after my sons case. This is definitely big corrupt business trying to squish the little guy!

My son has a large court case coming up in September that has been postponed for 3 years (thanks covid) it looks like he will be receiving approximately $850,000.00 to 1,000,000.00 in settlement. Some of it will be for wages and some of it will be compensatory damages. He files single, although he does have a son (ex wife claims). He is 90% disabled vet with all his health expenses paid through the VA and his disability pay. He is heading off to Nursing School in September (He already has his associates degree) with all of it being paid with his GI Bill and a lot of scholarships. He has no other income. My question is: He is going to have to pay ALOT of taxes unless I can figure out someway to offset that income. I do not do taxes for high income earners so I do not have a good base of knowledge in that area. I know he will phase out of making any IRA contributions, and because of the VA health there seems no point in starting a HSA for that deduction. He does not want to own any rental property or start a business. He is planning on continuing his education in the medical field and working for the VA. Any good suggestions on how to offset his taxes?

TP receives two 1099R's from State Street Retiree Services for United airlines. Gross Distribution shows $2149.94 and $10,749.70, taxable amounts are blank. The money he receives is because he gets it from the Pension Benefit Guaranty Corp, because United Airlines went bankrupt in 2002 and TP lost all his $80,000.00+ in employee stock ownership and his $30,000.00 + annual pension. I can't seem to find alot of information on how much of this gross distribution is actually taxable. TP knows nothing about it and prior tax preparer only claimed a small portion of it, but I have no worksheets to see why. TP says he never had to fund anything into his pension or the employee stock ownership, so there would be no basis. I will go back and ask TP to bring me all the 2020 tax data to see if I can piece it together. Does anyone have any insight into this or links to see if it is all taxable or not? I was wondering if it wasn't taxable because it is such a small amount compared to what he lost?

Same for me

I have several TP's on extension that have started receiving their disbursements from the Paradise Fire in California in 2021. They now live in Oregon. All have different scenarios that will require different ways to file their TR. Is anyone familiar with this? I would like to be able to reach out for guidance on best way to handle these; probably mid May after my tired brain has had time to recuperate. Also, do I have any fellow Oregonian tax preparers on here?

I just needed affirmation on the Form 709. Thanks. I didn't think to ask why basis was so high, my brain is fried! Maybe they bought is at the height of the market at that time? I did make sure to ask that they actually got a market analysis and sold it for FMV, which they did. They said they could have sold it higher but chose the lowest FMV because it was for their daughter. The daughter lives down in California and I'm a Oregon preparer so I won't need to address the daughters TR at any point. I'm wondering....how do I respond to an individual answer like I see in these posts?

TP sold their primary home of 17 years to daughter. Basis was $520,000.00 sold for $495,000.00 and a market analysis was done to come up with that FMV of $495,000.00. Title company paid off the original mortgage of $320,000.00 and parents gifted their daughter the $175,000.00 equity in the house. There is a paper trail on the Settlement Statement. I believe all I need to do is File a Form 709 reporting the gifted house equity and the house still qualifies for the maximum exclusion, is this right or am I missing something else?

I agree! Exhausted. I have never had so many new clients in one year. More tax preparers and CPA's are retiring in my area and no new people coming in and replacing them. New client brought me huge tax return with 27 K1s and 4 Charles Schwab statements totaling 264 pages, marketplace and the list goes on. I did do a little crying over that then called him and said EXTENSION!!! And I am so tired of every other TP telling me they didn't get any stimulus!!! It took ALL my will power to get out of bed this morning and come to my office. 10 more days, 10 more days, 10 more days!!! Thanks for the encouragement!

TP bought new home with small apartment attached to back of the house. They rent this out as AirBnB; this I know goes on a Schedule C because they rent it out short term and provide services. They also have a studio apartment also attached to the house above the garage that they rent out to traveling nurses, that come and go anywhere from 1 month to 6 months. No services provided for them. Everything under one roof and all utilities, TV... are all on one bill that I will have to split. Would you put the Garage studio apartment separate on a schedule E or C or just put all rental activity on one Schedule C because it's all under one roof?

I agree with Lion EA. I have a clergy that I have done his taxes for several years. I did a lot of research on this to make sure I did it right. Read PUB 517 for clergy and here is some instructions as well. It is lengthy but has alot of good information. IRS Instructions for SE tax.pdf

That is where I had put it; I appreciate the extra advice and the affirmation that I had it in the right spot!

I had TP and spouse that got married and bought a house together and both sold their own primary homes in 2021, that they both lived in for over 2 years. They both qualify for the maximum exclusion. I do not see a way in ATX Max to do two primary home sales, does anyone have a suggestion, guidance or an answer to what I'm not seeing?

TP gave me his Coinbase Gain/Loss Report showing a Short term $1629.45 gain. No 1099 issued, even though Coinbase states that if he received $600 or more a 1099 would be issued. Should I enter this on Sch 1 Line 2 as Coinbase Crypto? SOME OF MY RESEARCH: 'However, the crypto universe is expanding fast — there’s just so much more to do than simply buying and selling, and crypto reporting can be tricky, as gains you receive from certain activities count as ordinary income. It’s important to note: you’re responsible for reporting all crypto you receive or fiat currency you made as income on your tax forms, even if you earn just $1. If you earn $600 or more in a year paid by an exchange, including Coinbase, the exchange is required to report these payments to the IRS as “other income” via IRS Form 1099-MISC (you’ll also receive a copy for your tax return).'

I had this exact same situation last year. I just put in his W2 and made sure the expenses were correct on his P & L report. As you said, it was all a wash and he was still paying in all the appropriate social security and medicare. Then he got the 'TALK' about why he could not do that anymore. He listened! This year, no problems!

Self Employed Schedule C TP (real estate broker) opened a Solo 401K this year and wants to fund it, which form am I looking for in ATX? This is my first one. Any words of advice I need as I figure out what his contribution can be?

Thank you for the advice. I agree. I don't feel sorry for her, just frustrated that our government is so careless about 'we the people'!

If Oregon had done two separate 1099s, one for each year, showing it was for year 2020 but they didn't. They combined both years into one 1099.

Disregard, I figured it out! Thanks!

TP received a 1099 G with $29,000.00+ in unemployment with over half of that being back pay for 2020 because the state of Oregon screwed up. With that said, she got jipped out of the $10,200.00 exclusion from last year. Any thoughts on whether I can do something where she could still get that benefit or will I have to make all of it taxable? From my research it would seem 'to bad so sad' all taxable. FYI.....the state included both the 2020 and 2021 all on one form because it was all received in 2021. Any thoughts or advice?

Wow, I did not realize about the permanent file either and will definitely be using this feature in the future! I have no idea how to link and would love to use this feature. I don't have time to read the 500 pages of explanation, any chance of giving me the short easy version on how to link?