kathyc2

Was this truly a pension and not a 401K? I'm thinking if you want to convert a pension to an IRA you need to convert the entire amount rather than a partial.

I'm not 100% sure I'm following what you are saying, but you need to remember than the partnership and the S-corp are separate entities. If the partnership paid money to the S, then the payment needs to be either 1)an ordinary business expense, 2)a guaranteed payment or 3)a distribution. What does the partnership agreement say about payments to the S?

I'm 99% certain it's because you are taking the "purchases" account on QB to mean purchases, which is is not. QB p/l does not have a COS section for materials. Everything is rolled up into one account, which your client is calling "purchases" So, if you want to come up with actual purchases, you need to do some back calculations: Your beginning inventory was 4. Purchased items totaling 14. Sold items with cost of 13. Ending inventory is 5. 4 + 14 - 13= 5 Or to get cos 4 + 14 - 5 = 13 The COS on p/l (which is labeled) as purchases is 13. You need to put 14 as purchases on TR so that the COS will end up at 13, due to inventory increasing. The 40K I'm assuming is a true-up number from physical count, which doesn't have anything to do with the problem you are having.

I thought your question was why the "purchases" account was different than the BI + P - EI = COS equation? Now you are saying you don't believe the ending inventory amount?????

To further clarify, if set up correctly, inventory purchases should be debit Inventory asset and credit A/P When sold it would be a debit to purchases and credit to inventory. Even though it's being called purchases in QB, it's actually a COS account. What I do on tax return is have the add change of inventory to QB purchases account.

The change of inventory is likely already reflected in the "purchases" account. IOW actual purchases were likely 14M, with 13M being used and 1M increasing inventory.

Never mind, I see I was wrong after reading the 590B that's still in "draft" mode. Arggghh!

FYI I contacted the broker this morning, and they are issuing corrected forms.

My understanding is that if an IRA is inherited by a sibling or equivalent, the age of the deceased determines whether they need to take distributions. If the deceased had not reached age where RMD's are required, beneficiary can wait until year 10 to take distribution. If the deceased was RMD age, beneficiary needs to take out at least the RMD. Am I correct or confused on this?

Have you checked that the default printer didn't get changed in Adobe?

There is also a 1099DIV. Total foreign dividends from the statement are less than $200. The DIV also shows a small amount of foreign tax. The point of foreign tax credit is so the same income is not taxed at full rate for US tax. Since there is no US interest income for this account, I think I should just not show the foreign tax on return???

Client has a 1099INT from brokerage account that show ~400 of foreign tax paid. Interest income and all other lines on form are blank. I don't know how you could pay foreign tax on zero interest income? If I look in the detail pages it shows it is for Curacao and references Pimco All Asset Fund. Can this be correct?

$200 federal credit. https://www.energystar.gov/about/federal_tax_credits/non_business_energy_property_tax_credits

This morning I had contact with two prior clients. They were both PITA so I didn't care when they left. One was absolutely indignant when I passed on taking her back as a client. LOL!

The ones that smell like they were soaked in perfume/cologne are just as bad.

Wouldn't it only apply to money that was actually paid? In other words, if student loans were taken out, I don't think that amount would qualify.

Correct. She is responsible for the remaining payback. See 5405 instructions.

The AOC is only good for the first 4,000 of tuition/fees. If they already have that much, I'd pay the Spring in 2023 to at least get some Lifetime Credit if the AOC has already been used 4 years.

If the student files on their own for the non-refundable portion, their income would need to be over 17,550 to see any net tax benefit. After standard deduction, 17550 earned income would have $500 tax offset by the non-refundable AOC. Mom loses the $500 other dependent credit, so break even. Also, it money Mom took from retirement was an IRA, see if it can be exempt from 10% penalty for higher education expenses.

I think you misunderstood me. I was pointing out that while it can only be used on 4 tax returns, there may be multiple years available to choose which are the "best" 4 years.

That will be over 5 calendar years though, as the student almost always starts in fall. In actuality, it can run over several calendar years as the requirement is "at least 1/2 time".

I have the plastic sleeve client, several don't open envelopes, a couple staple happy ones, some that use a box of paper clips and one that puts sticky notes on everything. Like I need a sticky note to tell me a W2 is a W2.

Part III of 8812

LOL! I don't think seniors that have Social Security and a couple hundred of interest income need to worry about SOL. No reason to pay me to prepare a return that is not required or offers them zero benefit.

I have a lot of senior clients with AGI below the standard deduction. The only reason I still file for them is that IN has such a low filing threshold.