Lion EA

Hugs!

I have two adding machines on another "desk"/old stereo equipment-room divider piece of furniture in my office and a Rolodex in the lower shelf of "my desk"/old computer hutch with the top removed. And, piles everyplace and dust. A client wants to stop by Tuesday to drop off but has questions, so I'll have to clear off some of the mess.

Can't get a picture under 1.01MB...

Any NYers listening in on this thread? Right now H&W have NYS drivers' licenses. Is that going to cause a problem. Catherine: did your clients get international licenses, or FL? Thank you for confirming that your clients in this situation do NOT have state returns. I guess I'll start a checklist of changes for them to make. Has anyone seen such a checklist, to keep me from reinventing the wheel during tax season?! Love all the talent on this board. I haven't seen a lot, but all of you together have seen it all.

Consider yourself hugged, Judy. Hugs and hugs and hugs.

In the past, I've had NY and I've had CT ask for a copy of the new state's resident income tax return when going NRPY. For this family, we cannot provide that. We've filed NR NY for a year or two with NY rental income and a NY mail address (c/o friends) and a Singapore residence. I expect NY to be a problem...

One more question. When they sell their house, from that point on they will file NO state income tax returns? NY is a bit sticky about You have NOT left until you've stuck the landing, become a resident in another state. We have managed to make a case for them filing non-resident NY returns to report their rental income/loss, not stepping foot in NY for a couple years now. After they sell (if that's what they decide) they can have a mail drop, preferably in a non-tax state, and file federal but NO state returns, right? They do visit the US, but less often now that aging parent issues have resolved. College visits, some family visits (one set of relations is moving to FL).

Thank you, Catherine. I couldn't see any reason why for tax purposes. They think it might have something to do with no residence in a state re college financial aid, but they'll have to ask that of the colleges their daughters are interested in. They wanted to keep their house when it was going to be just a couple years. But, things change.

My biggest concern is -- Do they need a US home or a mailing address or any permanent nexus in the US at all during the time they are away? Someone (their broker?) told them they had to own a home (maybe it was the college financial department). And, they already had a good tenant lined up and thought they'd be back in 2-3 years. Now that they're staying longer, they're having second thoughts. And, I don't know! Anyone know? Any leads on how to research? My attempts at searching have not brought me close to any answers to any of their questions.

Every once in a while I get clients who go overseas to work for a couple years or more, but not often. This is a couple plus two children living and working in Singapore for the last few years, now staying until 2020. As I’ve seen people do before, they rented their house to friends/good tenants. Who has time to sell in the press of packing up your family and career (college professor), and who wants to return years later to no home and with no current equity to buy a house in what will be an unpredictable market? But, their trip has extended long past their original thought of two years, and they’ll be returning just as their girls are off to college and then out on their own, a time to downsize. He’s taught at Yale in CT, as well as Vassar, so may not need to return to Poughkeepsie, NY. They wrote me the following: "From a tax standpoint... As you know, we own our house in Poughkeepsie with approximately 100,000 left on the mortgage. I'd like to think we could sell it for at least 200,000 at this point. Our tenants have expressed an interest in buying but we haven't had any conversation further than that. We spoke to a realtor last summer who would be happy to handle the sale. All that said, what would it mean? It is my understanding that we need a residence in the US for multiple reasons such as continuity, taxes, etc., especially if we plan to come back...which we do. C starts at E College in August and D has 2 more years of high school before heading either to the US or Europe. A and I will stay here for those years while she finishes making our return Summer 2020. Do we need to own a home? Does it have to be in NY? or would CT or MA be acceptable options for you to continue doing our taxes? We don't know where we would return to but it is possible, maybe even likely that it will be the northeast. The benefit to me of not owning the Pkpse house is not worrying about what needs to be done, such as new roof, furnace repair, general degradation, etc. I would consider buying a 2- or 3-bdrm townhouse and having a property manager oversee it... These are the questions I would love to have your insight on."

I've also seen OC Other Countries on lists, as well as Various.

You have too much free time during tax season, John!

I had a colleague who said the big firms, brokerages, etc., lock a bunch of lawyers in a room until they come up with a usable loophole. Then, the IRS locks a bunch of lawyers in a room until they can close that loophole. Rinse and repeat...

And, you can binge watch a bunch on many holidays.

So, stealing and reporting it on your tax return could be a good tax strategy...

Darn. More questions for the interview/organizer. Did you steal something in 2017? What was its Fair Market Value? Did you return it in 2017? What if its value went down/up before it was returned?

Intuit card reader by Roam Data for Intuit GoPayment. But, it's still cheaper to just type in on desktop without a reader.

Well, that client (now ex-client) was a wheeler-dealer and wouldn't pay for a gift tax return, so he got what he got. When I went out on my own, I did not let him know where I was. Avoided future problems with him, complaints from him.

The processing fees are lower for a swipe, but then I'd have a rental or purchase of a swiper. (Mobile swiper fee is less expensive than mobile w/o swiper, but MORE expensive than desktop W/O swiper.) For the half dozen or so who want to charge, the couple points difference in my fees is not enough to make me get a swiper. And, the usual situation with using a charge card is the client is on the phone, remote client or client wanting their kid/parent/whoever to pick up their folder, so swiping isn't possible. So far, most use checks, but I want charging available to not slow down paying. I don't invoice through Intuit, so I can't see the customer invoice on the charge screen, at home or away. I have to view it in my tax prep software or if I printed it out; client can see it if I sent invoice to him/her. Same with PayPal; I don't re-enter invoices so client has to know amount to pay to use the PayPal link on my website.

I'd suggest a 10% discount to a good tenant would NOT make it personal use, still close enough to FMR for me, but I don't have any clients with rentals right now so haven't researched that lately. However, IF it were personal use, you report income, gross income, on Line 21 and take NO deductions, I think. Maybe deductions on Sch A, but I think not. So, you haven't pocketed anything, less than if it were an arms-length rental on Sch E where you can deduct expenses and depreciation. I'm glad to hear that a cousin doesn't muddy the waters. Long ago I had a client who let his daughter live in his second home really cheap, so had to research at that time. He was not happy with the outcome! He was expecting to deduct his foregone rent or something like that.

I use Intuit to process CC payments. As a ProAdvisor, I avoid monthly fees. I don't use a card reader. I do have the free QB version that works on my smart phone, but have never used it. I just type in the info, whether the client is here with their card or on the telephone. The bonus is that it's in my QB file. Not a big fee for the few clients that want to pay via CC. I try to make it as easy as possible for people to pay me. I also take CCs via PayPal on my website, as well as checks, from remote clients.

Then, personal use rental, below FMR to a relative. Haven't done one of those for a long time. I don't think you depreciate....

Is cuz paying fair market rent?

If Mom gifted her property to kids, then kids' basis is mom's basis (+ whatever capital improvements they make after they own it). Step up/down in basis happens only if kids inherit property.

Decide how you learn best. The study guides available are great, with lots of practice tests. There are also live courses online, such as Eva Rosenberg/Tax Mama. And, you might have live courses near you. HRB's course was great years ago when I took it, but I don't know if you have to be an employee to enroll. Check with your local chapters of NAEA and NATP to see if they offer courses. The nice things about the current test is that you can take one part at a time, know if you passed immediately, and retake if needed as soon as you want. Basis, basis, basis. If you're finding a weakness as you study, pull the corresponding IRS Pubs; you'll often find questions on the test come straight from the examples in the Pubs. Don't be afraid to guess, but don't second guess yourself. Breathe!