BulldogTom

TP has been coming to me since he lost his wife 15 years ago. He is elderly now and is relatively well off. Has a trust that is fairly substantial and a big house in the nice part of the Bay Area. Last year got married at the end of the year and wanted me to file him single. Did MFS and figured I lost him as a client since the new wife thought I did it wrong. Got an email from him recently. "Should we file MFS or MFJ?" I feel like Andy Dufrene in Shawshank Redemption standing on the edge of the roof asking "Do you trust your wife?". Tom Longview, TX

@joanmcq the more I think about this, I started to question the domicile of the taxpayer. Did they really leave CA and establish domicile in CO before the end of the year. Domicile cuts both ways, it is not only a tool for the FTB to claw back out of state income. If, and only you will know this, the taxpayer did not make a clean break from CA before the end of they year, you could file her as a CA resident and a PY resident of CO for 2022 and claim the taxes paid to CO as Other State Taxes paid. It might be cleaner for the purposes of an audit (if that were to happen). Just thinking out loud. Might be worth looking at. Tom Longview, TX

Not sure about the CO side, but since the employment was in CA, and the award related to the work performed in CA, and the court that awarded the judgement was in CA, I am pretty confident that your client has CA source income that needs to be reported on a PY tax return. Does CO tax worldwide income like CA does? Do they offer an Other States Tax Credit like CA does? If so, that is how to handle the CO resident return. Tom Longview, TX

@joanmcqNo problem here with your ranting. I still work off QB 2003. I have the install codes, can move it to any computer I own and I keep a copy of the 2003 license in the container with the CD that says I can load it on any computer I own. Don't know if I could pull the trigger on subscription to Intuit. Tom Longview, TX

Either Consulting Income on a 1099NEC or wages on a W2. If they are in CA, I would go W2 because of AB5, but that horse may have left the barn if you are looking at 2022 tax return. Tom Longview, TX

Shhhhhh....that is our little secret that we don't want to get into the ears of the IRS. Tom Longview, TX

It is a little more nuanced than that. The trust instrument should define income. If the instrument does not, then the rules fall back to state law for computing income. Most states define Capital Gains as corpus. Most trust instruments allow the trustee to distribute corpus for various reasons, or in your case, require 10% of the corpus to be distributed. What the IRS is looking for (IMHO) is distributions of CG to low income beneficiaries to escape trust taxation. I believe that so long as you have a viable reason for the distribution of CG, that is NOT lowering tax, and is within the authority of the trust instrument, you are in good shape. Margaret always distributes, so again, no issues with the service because it is a uniform application. If Margaret was distributing CG to low income beneficiaries and other income to high income beneficiaries, then she might have a problem with the service. Tom Longview, TX

@Catherine I know this is not a big help since I use ATX. But in ATX you would use a business use of the home linked to a CA only 2106 that would populate page 6 of the 540 CA form. At the end of the day, it is going to end up on page 6 of the California Adjustments form in Drake. How you get there I can't help with. Tom Longview, TX

If I remember correctly, when I did a conversion from Quickbooks Desktop to Quickbooks Online (QBO) for a company I was working for, each company had its own account (we had 3 companies for regulatory reasons). The account owner then gives access to the Accountant and any other users that they want to. I *think* the accountant was not charged as one of the users for the QBO tier pricing. It has been a minute since I did this (about 2 years ago) and I was more focused on the data conversion than I was on the price of the accounts. And of course I had full admin privileges so I never used the Accountant share login. Sorry I can't be of more help. Tom Longview, TX

I will take the Pecan. Tom Longview, TX

IRS will put 87,000 new employees on the task of determining how much they owe us, and charge their time in the cost of running the program and send us all a bill.... OK, that is stupid, but I thought it was funny before I actually typed the sentence. Tom Longview, TX

Un-researched, but first blush seems like a bridge too far... I think the portion that is related to the installation of the solar is all that you get. Using your above situation and changing it a bit, I want solar on my house but I need to rebuild my house to make it strong enough to meet the local codes. Can I do a full tear down and rebuild and take the solar credit for all the cost? I don't think so. Tom Longview, TX

Will we get interest? And a 1099INT? And a 1099MISC? Tom Longview, TX

@RitaBWow. I want an angel like that in my life. Can you introduce me to Ann and does she have any more lots? But to your question..... OK, you could say that Bob received 2 gifts from Ann ( 10K first, then 7K later). He used the 10K gift to purchase the property. Basis is 10K. Or, under the substance over form doctrine, Bob was gifted the property, in which case Bob gets the basis of the person making the gift. Basis is 5K. I don't get to 3K basis, how did you come to that conclusion? Not criticizing, just wondering what your thought process is to get to that number? Did I miss something? Tom Longview, TX

That is how I understand it as well. Tom Longview, TX

OK, more information comes out from the client. @Possi LES shows FL. No issue there. The spouse DID travel to CA for some of the work. It is hybrid work, not remote. Client does not know how to break it out between in state and out of state, so we decided all of it is CA source income, and the spouse wants to continue working for the company and will travel back and forth to do the work. The CA income is taxable to CA because the military member is not stationed in CA - only spouses of members who are stationed in CA can exclude under MSRA. That is how I am reading the CA instructions. So a 540NR needs to be filed. For GA, I think I file a non-resident return and all income is excluded under the MSRA. That is how I am reading the instructions. Am I correct? Thanks for chiming in. Tom Longview, TX

New client this year. Lives in GA with Active Duty Military Spouse who is stationed there. Domicile is FL. Worked for a company in GA for part of the year. Worked remotely for 2 companies in CA. Both companies show her wages as CA source income, though she never set foot in the state. Both have state income tax withholdings. I think the companies need to correct her W2s? I think all wages are exempt from CA and GA taxes under the military spouse relief act? If the W2s are not corrected, and even if they are, I think we need to file a CA 540NR to get the withholding back. I don't do a lot of Military returns, so any help/suggestions would be appreciated. Thanks in Advance. Tom Longview, TX

HMMMMM.....I like it but it scares me. Safer to amend I think. Need to pass this by the Jedi council to see what the Force says. Wimps like me want to have all my returns accurate before I start fighting the Dark Forces of the IRS. Tom Longview, TX

I don't know what to say. Is a 3115 an option at all? Tom Longview, TX

@Patrick Michael You just got a PA master class for free. Lucky you. @jklcpa You are the bomb! Tom Longview, TX

@Catherine we are in the same boat. I open up the task manager and I have no idea if I can end a process or not. And I know if I do some techie type will tell me (after giving me their bill to fix it) how stupid I am for closing an important process. Tom Longview, TX

Ask him for the regulation that requires it. If he can produce the IRS guidance, then give it to him. I assume it is a partnership return like most law firms. Everything he needs for his personal return should be included on the K-1. Not sure why he wants the actual 1099B. As a partner in the firm, he should be able to get a copy from the partner who handles the PS investments and it is probably discussed at partnership meetings. Weird. Tom Longview, TX

On 2/9/2023 I was doing CA returns that included the Middle Class Tax Relief payments that were taxable until they weren't. This has not been my year for following what the IRS is doing. Tom Longview, TX

Assume you are in ATX. Open the Completed return. Upper left corner above the save button is the "Returns" menu drop down. Select "Amend Return". After ATX creates the new return, close the original return without saving. Make your changes to the new return. Save and name the new return. Tom Longview, TX

Spidell. Did the update seminar 1/10 Tom Longview, TX