BulldogTom

I think you are overthinking it Deb. It is just a Cap Gain. If the TP sold shares of his stock in his S Corp for a Gain, would you put it on his CA NR? I don't think so, so I think Drake is doing this correctly. Just thinking out loud....I did not research this (and I am not doing any research for a couple weeks, I am taking a break). Tom Longview, TX

Max makes an important point. Even if they were Domiciled in CA, they needed to title the property purchase properly. I just assumed that everyone who is domiciled in CA would title their joint property as CPWROS. Tom Longview, TX

I don't think so. But it is possible. Domicile at the time of purchase is the controlling factor (at least that is how I understand it). If your couple were both domiciled in CA at the time they made the purchase of the property, then the property would be community property and carry that designation even if they subsequently moved to a separate property state. If they were domiciled in NY (not a community property state) when the purchase was made, then the step up would only be for the half of the property owned by the decedent spouse and the living spouse would continue with their own basis. Double check this because I am commenting from memory and not research. Tom Longview, TX

We have had this client for many years. They are friends so I don't fire them...but I should...but my wife won't let me...so it is not going to happen. Never listen to my advice and warnings. Whatever....their personal problems become their tax problems, I can only tell them what they should do. We did their bookkeeping for several years for their SP business plus their personal tax return. At the beginning of 2022 they stopped sending their info and stopped answering our texts and emails. OK, so maybe they found someone local? Kinda happy about that because their issues put a strain on our relationship. Last night, my wife gets a text "We put everything in the mail today. Let us know if you have any questions." On Oct 3rd they sent via US Postal Service a full year of bookkeeping records to get done so the tax return can be completed by the 15th.... Not gonna happen. I can't fire them (because my wife...see above) but I can raise the price! Tom Longview, TX

I don't like divorcing couples. I try to run them off by telling them that I will not do their returns unless they can work together to get the best result for their overall tax situation. I tell them they need to agree which checking account the refund will go to (if there is one) and who is writing the check to pay the taxes if there is a balance due. I promise them that if they fight in my office I will hand all their documents back to them and not complete the return. So far it has worked. But I may just have been lucky. It is a conflict of interest trap to do MFJ for divorcing couples. It just can't turn out right. @GraceNY My first blush take is the estranged spouse is angling for an argument in court that the other spouse makes more and therefore the halves should be bigger. I would run from it. Hand them back their docs and say "sorry, I cannot help at this time". Send back a certified letter the the estranged spouse terminating the engagement, and CC the attorney. Tom Longview, TX

@DANRVANIs first time abatement possible for Corps? For some reason I thought it was for 1040 returns only. Don't know why that is stuck in my brain that way. Something about businesses being held to a higher standard.... Tom Longview, TX

A lot of the stories are biased one way or another, so I am not going to post a link. But you can google the story. It is all over the web. IRS Consultant illegally downloaded decades of tax returns of the nations wealthiest taxpayers, including a "public official" widely believed to be former President Trump, and leaked the information to news outlets, most notably the New York Times. He faces up to five years in prison if convicted. ***warning - rant coming*** I HOPE THEY CONVICT THE JERK AND MAKE HIM SERVE THE WHOLE 5 YEARS WITHOUT A CHANCE OF PAROLE. I wish Congress would pass a law that says anyone who distributes taxpayer information without written (not click through T&Cs on a website) agreement of the taxpayer should face the same 5 years. ***rant over*** Tom Longview, TX

@Gail in VirginiaTake a look at Rev Proc 2013-30 for the late filing of the 8832 and the late S election. I think you have 3 years to file this...but check it out yourself, I only skimmed it. It may be your "magic bullet" to pull dumb and dumber out of this mess. There will most likely be a late filing penalty, and I don't think you can get them out of that (and frankly, I wouldn't try, they need to pay the price for their actions) Tom Longview, TX

Can they file a late 8832 to claim the Corp status and then make a late S election? Normally an automatic approval from the IRS from what I understand. And since the IRS does not have a 1065 on file, since this is the first year filing, they should be good to go if the 8832 is included with the 1120S. Just a thought. Tom Longview, TX

She can be a dependent qualifying as a full time student until she turns 24, provided the rest of the dependency requirements are met. The mom can get AOC for 4 years if daughter is he dependent. LLC is available for any years in which AOC is not claimed. Tom Longview, CA

@kathyc2 CA uses the phase "CA Adjusted Gross Income" and it throws a lot of people off. What they should say is "Federal AGI recalculated under CA laws as if you were a CA resident." But CA being CA, they do their own thing... Tom Longview, TX

CA NR filing requirements look at your AGI from all sources within and without the state to determine the income threshold. Take a look at the 540NR booklet on FTB website for detailed information. Tom Longview, CA

I have heard of sharecropping, but I thought that was (and I don't mean this to be political but historical) how landowners after the civil war pretty much kept former slaves impoverished. Is this still a practice? Excuse my ignorance and please don't take offense. Tom Longview, TX

Be careful that your client is not getting into a partnership with their renter. If they are sharing income and expenses, it sounds a lot like your client is putting in land and the "renter" is putting in labor to produce a crop that each will then share the profits from. That looks a lot like a partnership. If that is what they are wanting to do, that is fine, but there are tax/legal implications to consider. Tom Longview, TX

The estate should have an appraised value for the property at DOD, and if you are lucky, it will break out the land from the improvements. If the estate did not do an appraisal, or if they did but did not break out the irrigation improvements, then it would be best practice for your clients to have an appraisal done when they get the property. If they have to get an appraisal done, it would be a good idea to show the appraiser the valuation at DOD so everything matches up. I believe the irrigation improvements will be 15 year property, but watch for anything that can be segregated out that is less than 15 year property. There may not be any, but you could potentially accelerate some of the assets if they are a different class. Tom Longview, TX

Another Random Thought....these fractional CFO companies may have to be included on the reports as CFO's are explicitly included in the section on persons having significant control over the company. And the "catch all" provision states that the work you do is determinative of the requirements for reporting, not the title. So a CFO cannot have their title changed to "Finance Manager" just to escape the reporting requirements. I wonder when FinCEN is going to start auditing the reports, if they ever do? Tom Longview, TX

I agree that the plain reading of the guide seems to exclude C&Fs. It appears that the trigger for most of our clients is a formation document filed with the SOS of the state in which they are formed. Just a random thought, companies that form after 1/1/24 have to include the "applicant". Lawyers and Public Accounting Firms who set up these entities are going to have to be included on the report as the "applicant"? But Law Firms and Public Accounting Firms are exempted from the reporting requirements. I wonder how that is going to play out? Tom Longview, TX

I downloaded the guide and it is pretty well written for a government document. Cleared a lot of my questions up. Notice that there is a "Catch All" for each class of reportable persons...very slippery when a $500 per day penalty is on the line. I sent a .pdf copy to all my clients who have LLCs, Corps & Partnerships. Told them I can't do the reporting for them but as a courtesy I was providing the guide to let them know about their requirements. Tom Longview, TX

Love that song. Tom Longview, TX

Wow....they finally put their foot down. I applaud them. Wait for the news to find 2 or 3 people who are legitimately claiming the credit and now have to wait months to get the funds. They will start crying on TV that their business will be shut down if they don't get the money and in an election year, no politician wants voters crying on TV that their business is closing because of the IRS. Just my cynical take on the situation. Tom Longview, TX

Smokey and the Bandit? Tom Longview, TX

I don't think so. It is not listed in the instructions for the form for types of income to include in investment income. Tom Longview, TX

I remember something about them, but I am not going to show my ignorance by telling you what I think I know. Can someone explain to me in 4-5 sentences what a QSUB is and how it is taxed and its relationship to the parent and the parent's taxation. I plan to read up on this when I get some time, but I don't have a lot of time right now. Thanks Tom Longview, TX

Catherine, I think the TP would have CA source income and required to file a 540NR. Where are you showing him domiciled during that period? You may be able to wipe a big portion of the income from CA because if he was "traveling for business at a temporary worksite" and returned to his domicile, he can take, for CA purposes, the unreimbursed travel expenses (Air BnB, meals, transportation, etc). CA never conformed to the 2017 tax law changes related to unreimbursed employee expenses. Take a look at how he was paid. If any portion was considered a scholarship, it would be excluded to the extent of tuition, fees and materials. Tom Longview, TX

Make sure to keep your eyes down or you will look right over the top of her...... Love ya @Catherine but you are short! Tom Longview, TX