Lion EA

I deal with a lot of NY issues, and YES an employee in a different state working as an employee for a NY employer DOES create nexus for the employer in that other state. Judging from my CA clients, CA is as aggressive as NY. You can try. Good luck. Most states now use a single/sales criteria for nexus, unless it benefits them to use Sales/Employees/Property instead.

I think I said something above backwards. Your software, when asking it to amend, will suggest putting your data in Column A. You need to say no in whatever way your software requires. You want your data in Column C. Then you type the client's data into Column A. Easy to do; hard to explain!

I still think the IRS definition of "simplify" is different than mine!

Because you need relative values, percentages to allocate, can you use the depreciation values, the original cost basis, to compute the percentages? I'd rather have sales values, but I'd rather the client do the research or pay an appraiser! How much will your client pay you? Is it enough to research current FMVs? Do you even have the time without shorting your other clients?

Darn. I just got POAs signed yesterday for a 2017 issue, so requested 2016-2022, I think, but anyway more than one year. Hope CT and NY accept them anyway, since the states are what I'm worried about, states requesting more information after amending. The IRS is getting their CP2000 with lots of documentation, so hopefully they won't need a POA, won't need any more info.

Sometimes, it's hard to create an incorrect return. I go for easy. If the original return is not in my software: Create the return as it should be, as if it's the original return and not an amendment. When I have the return the way it should be, I call up the X forms (I've done this at Block, with ATX, and with ProSystem fx, but ATX was a long time ago). When your software asks you if you want to transfer the data to "Column C," say NO or check/uncheck the box or however your software works to keep your data as amended now. Then you just have to type into "Column A" the amounts from the client's original return and add the explanation. This is often a whole lot easier than trying to recreate your client's original return in your software, especially if he had errors. And, it's easier for me to proofread the return I'm creating as if it's an original return, then turn it into an amendment. I can follow the flow better.

The Form asks for Year(s) and the Instructions state: You may list the current year/period and any tax years or periods that have already ended as of the date you sign the power of attorney. You may also list future tax years or periods. However, the IRS will not record on the CAF system future tax years or periods listed that exceed 3 years from December 31 of the year that the IRS receives the power of attorney.You must enter the description of the matter, the tax form number, and the future year(s) or period(s). If the matter relates to estate tax, enter the date of the decedent's death instead of the year or period. If the matter relates to an employee plan, include the plan number in the description of the matter.

I've met preparers who have all clients sign the POA when they sign the engagement letter every year. And, some that use prior and future years on each form, so a new copy is not needed every year. I have a client sign a POA when needed, but I put prior/future years on the same form. Once in a great while, if a client alerts me to a potential issue, I have them sign a POA while they're here, prophylactically.

I have a lot of trouble understanding the OP scenario. If father has been giving son money all along, then whatever it is now (rent? gift?) it probably was earlier when college son lived there, also. Yeah, I don't know who's collecting rent and paying operating costs, just that father is paying an amount equal to mortgage payment to son who owns the house and is obligated on the mortgage. My advice would be to use bullet points, a timeline, actual dollar amounts, cash flow, etc., to clarify the earlier and current situations as clearly as possible and take the whole mess to a lawyer to work out ownership, rent, gift, personal use, other income, etc. issues before you try to compute tax consequences.

https://www.irs.gov/forms-pubs/error-in-tax-calculation-in-schedule-d-tax-worksheet-form-1040 Error in Tax Calculation in Schedule D Tax Worksheet (Form 1040) The 2018 Schedule D Tax Worksheet in the Instructions for Schedule D (Form 1040) contained an error. The tax calculation did not work correctly with the new TCJA regular tax rates and brackets for certain Schedule D filers who had 28% rate gain (taxed at a maximum rate of 28%) reported on line 18 of Schedule D or unrecaptured section 1250 gain (taxed at a maximum rate of 25%) reported on line 19 of Schedule D. The corrected worksheet is at the end of the updated instructions at the link above. If you downloaded those instructions before May 16, 2019, you should download them again. All returns filed after May 15 should reflect the new calculation; the IRS will update any returns filed after May 15 to reflect the correct tax using the new calculation. Because the IRS has already provided the corrected worksheet to its tax software partners, anyone filing a 2018 return, including those with extensions, after May 15, 2019, are not affected by the error. Those taxpayers reporting these types of transactions typically file more complex returns and frequently obtain tax-filing extensions from the IRS. For that reason, the IRS believes that many potentially-affected taxpayers are yet to file. The correction results in a lower regular tax for most affected taxpayers, and a higher regular tax for a small number of the impacted taxpayers, depending on the taxpayer’s individual return. Note that most taxpayers filing Schedule D do not have amounts on lines 18 and 19, check Yes on line 20, and do not use the Schedule D Tax Worksheet to figure their regular tax, and are unaffected. Affected taxpayers need not file an amended return with the IRS or call the IRS. The IRS is reviewing returns submitted prior to May 16; more information will be provided about this review later. We corrected the Schedule D Tax Worksheet in the Instructions for Schedule D (Form 1040) by renumbering line 18 as line 18a, adding new lines 18b and 18c, and updating the text on line 19 to reflect those changes. A Form 1040 taxpayer’s regular tax calculation using the worksheet is potentially impacted if: Form 1040, Schedule D, lines 15 and 16 are both more than zero; Schedule D, line 18 or line 19 is more than zero (or both are more than zero); The taxpayer’s taxable income is more than $38,600 if single or married filing separately, $51,700 if head of household, or $77,200 if married filing jointly or a qualifying widow(er); Line 15 of the Schedule D Tax Worksheet is not more than line 14 of the Schedule D Tax Worksheet (those lines were not impacted); and Line 18 of the original Schedule D Tax Worksheet (line 18 a of the corrected Schedule D Tax Worksheet) is not more than $157,500 ($315,000 if married filing jointly or a qualifying widow(er)). Potentially impacted taxpayers may recalculate their regular tax using the new worksheet to see if it changes. However, the IRS is reviewing all potentially impacted filed returns; more information will be provided later.

https://www.irs.gov/forms-pubs/error-in-tax-calculation-in-schedule-d-tax-worksheet-form-1040 Error in Tax Calculation in Schedule D Tax Worksheet (Form 1040) The 2018 Schedule D Tax Worksheet in the Instructions for Schedule D (Form 1040) contained an error. The tax calculation did not work correctly with the new TCJA regular tax rates and brackets for certain Schedule D filers who had 28% rate gain (taxed at a maximum rate of 28%) reported on line 18 of Schedule D or unrecaptured section 1250 gain (taxed at a maximum rate of 25%) reported on line 19 of Schedule D. The corrected worksheet is at the end of the updated instructions at the link above. If you downloaded those instructions before May 16, 2019, you should download them again. All returns filed after May 15 should reflect the new calculation; the IRS will update any returns filed after May 15 to reflect the correct tax using the new calculation. Because the IRS has already provided the corrected worksheet to its tax software partners, anyone filing a 2018 return, including those with extensions, after May 15, 2019, are not affected by the error. Those taxpayers reporting these types of transactions typically file more complex returns and frequently obtain tax-filing extensions from the IRS. For that reason, the IRS believes that many potentially-affected taxpayers are yet to file. The correction results in a lower regular tax for most affected taxpayers, and a higher regular tax for a small number of the impacted taxpayers, depending on the taxpayer’s individual return. Note that most taxpayers filing Schedule D do not have amounts on lines 18 and 19, check Yes on line 20, and do not use the Schedule D Tax Worksheet to figure their regular tax, and are unaffected. Affected taxpayers need not file an amended return with the IRS or call the IRS. The IRS is reviewing returns submitted prior to May 16; more information will be provided about this review later. We corrected the Schedule D Tax Worksheet in the Instructions for Schedule D (Form 1040) by renumbering line 18 as line 18a, adding new lines 18b and 18c, and updating the text on line 19 to reflect those changes. A Form 1040 taxpayer’s regular tax calculation using the worksheet is potentially impacted if: Form 1040, Schedule D, lines 15 and 16 are both more than zero; Schedule D, line 18 or line 19 is more than zero (or both are more than zero); The taxpayer’s taxable income is more than $38,600 if single or married filing separately, $51,700 if head of household, or $77,200 if married filing jointly or a qualifying widow(er); Line 15 of the Schedule D Tax Worksheet is not more than line 14 of the Schedule D Tax Worksheet (those lines were not impacted); and Line 18 of the original Schedule D Tax Worksheet (line 18 a of the corrected Schedule D Tax Worksheet) is not more than $157,500 ($315,000 if married filing jointly or a qualifying widow(er)). Potentially impacted taxpayers may recalculate their regular tax using the new worksheet to see if it changes. However, the IRS is reviewing all potentially impacted filed returns; more information will be provided later.

So father "rents" home from son for mortgage payment cost only, so probably less than FMR. Then father sublets home on the open market. I take it father is not your client? If so, he has US-sourced income and must file. If son is your client, he has related-party issues in renting to his father for below FMR. I think that means he cannot claim losses, right? And, please tell them to work with a lawyer versed in rentals and NRAs.

Isn't that what Form 3115 does, makes a 481a adjustment in the current year as a positive or negative amount?

If only Wolters Kluwer could get things back online as fast as you do!

Have you/client tried the Taxpayer Advocate? Friendly, local Congressperson? Maybe even a tax attorney, depending on the issue(s). I think the form letters are generated by a computer, and you won't get a real person involved, certainly not the level of person you need.

Common problem for NY/CT and other states. Laws are state by state, so report the income in each state per the law of that state. If you are lucky, client will qualify for a credit in their resident state. I've suggested clients stop telecommuting when they are taxed on the same income in two states.

A friend who uses CCH's Axcess thinks it was a malware attack. Also, thinks they are going to be down a long time!

Me, too!

If it was a gift from the parents, then parents' basis is the brothers' basis. ($1 was not an arm's length sale.) If the parents retained an implied life estate under the laws of their state and the house was included in their estate, then the brothers do get a step-up or step-down in basis. It is my understanding, but I haven't needed to look it up for years, that common ownership for a rental does not require a formal partnership. Hopefully, someone with a lot more rentals in their practice will jump in. Oh, oh, Lynn did jump in! What Lynn said.

I always included it, but behind the current year summary. This year it goes on top! I have ProSystem fx which includes the state(s). No help for my clients who move around alot (I have one going back and forth between OH and CT for the last several years), but great when they stay in the same state(s), such as my CT residents commuting to NY.

I own farmland in IL, but mailed in an extension with monies and haven't filed yet. Let us know what you discover.

Great info. My Dell is old and was going to replace it last November or so, but replaced my hip instead. I've had issues with this Dell which Dell sent to replace an earlier Dell that had huge issues. I might go with HP this time. One of my techies likes HP. But, I'm not in a rush to replace, still lots of extended returns to prepare. Please, all of you continue to post your research, prices, decisions, etc., for me and any other tech-challenged preparers to learn from during the off season.

I've been having clients sign the Direct Deposit/Debit Report my software prints out. I think that glazed-eyes condition prevents them from paying much attention to the numbers, though. But, at least, I have their signatures covering MY butt.

And, sometimes the "result" is NOT present but then gets added/subtracted/exported to yet another schedule. Takes SO much time to explain to someone and prove I really did include their unemployment or whatever. A time suck when client is here and I can point & highlight; a larger time suck on the telephone; and a huge time suck trying to type it out in an email (I refuse to answer via text; I just text them to check their email). I think the "postcard" should have built-in color coding to track the flow.