JohnH

Nothing definitive here, but I don't think the registration fee is deductible as property tax (as much as I'd like to say it is). I prepare a few SC returns for residents and nonresidents, but is has been a while since I prepared a PY return. SC follows fairly common rules for allocation of income between states for a PY resident, although sometimes you'll need to prepare your own supplemental worksheet to break out the allocation of interest, dividends, retirement income, etc for the transition year. If the clients are retired, SC gives some generous allowances for retirement income. One quirk is how SC handles the K-1 income of a SC resident with ownership in an operating company doing business as an S corporation in another state. If that situation applies, you have some extra work to do, and it is s a little counterintuitive.

It's my understanding that the SEP IRA becomes the property of the recipient the moment the money goes into the account. The recipient is then free to do with it what they wish, which would be to leave it there, transfer it to another IRA, or withdraw it (incurring the appropriate penalty and tax of course). But I don't have a cite, so maybe someone else will jump in if there is a need for clarification. I did have a client one time who would put money into SEP plans for himself and his employee, and each time the employee would withdraw the money the very next day & spend it. The plan trustee never balked at doing this.

That is a very informative site. Well worth bookmarking for those times when clients ask questions about savings bonds. The $10K per year limit on EE beds with a guaranteed 3.5% rate at maturity seems low, but a couple in their 40's building a bond ladder would certainly want to give it some careful thought. It's strictly a long-term play, but not unreasonable for the fixed income, no risk allocation of a retirement plan.

This is so true. Many times people who have limited skills in their non-native language will answer "Yes" when asked if they understand, even though they don't. They do so for a number of reasons - running the gamut of everything from embarrassment, not wishing to inconvenience/embarrass the other person, simply not really wanting to understand in hopes that will give them cover if things go wrong, and so on. I've seen it firsthand numerous times, and will generally try to have the other person explain to me what I just said. Even that approach doesn't always get you where you need to be.

Wow. That is comprehensive. Lots of excellent info in there, plus creative writing. (Probably the first time I've ever seen a tax discussion say something to the effect that "If taxable income is greater than $XXX, then you are hosed.") This is definitely a link to be bookmarked, and its clear they plan to update the info. Thanks, Max

This guy has some interesting math shortcuts for maximizing the benefit of the QBI deduction. Haven't actually run his number yet, but he seems to know his stuff and he's interesting to read. He also had mentioned the late w2 issue when he wrote this back on Dec 28, 2017 https://www.forbes.com/sites/peterjreilly/2017/12/28/how-much-owner-salary-should-s-corp-pay-to-maximize-qualified-income-deduction/#5a1f8d6372ef

The ultimate in minimalist accounting.

Nice change, Catherine. I agree 100% that's a much better way to state that fact.

Given the circumstances, I don't think you have any choice but to contact the supervisor. Maybe start with a diplomatic message on the RO's voice mail that you will need to do this if she doesn't get back to you within X days. Your message could point out that you hope the RO is OK with respect to health, work load, or whatever, and the last thing you want to do is potentially create any problems for the RO internally, but you're worried about protecting your client's interests. I'll be interested in hearing what others advise to do in this situation.

Funny how we can be blinded by our assumptions at times. A 4-member S-Corp bought out one of the minority-interest shareholders this year. Payment was made by the corp directly to the shareholder, and the purchase price exceeded the par value of the shares. I had never encountered this situation (the S-Corp making the purchase vs other shareholders making the purchase) and so had been assuming all along that treasury stock would create a second class of shareholder. This had been rolling around in my mind for some time, so I decided that today was the day to research it (with the intention of asking a question here if my findings were unclear.) Turns out that it's just a matter of recognizing the treasury stock in the equity section with a PIC entry for the excess over par. No different than accounting for the identical transaction in a C-corp. So this isn't a question - it's a comment. It's amazing what we can learn when we actually do the research instead of depending upon what we assume we know about a situation that may be new to us. Lesson learned (or re-learned).

I don't think there's anything wrong with telling a prospective client their situation is unnecessarily complex and I don't want to move forward with the relationship. One reason might be that their income is so low it wouldn't justify the cost of handling the audit which I think is inevitable. That doesn't even get into the fact that she's probably already doing things that are wrong or certainly beyond what I'd consider to be a gray area.

Bingo! That's my cue to head for the door, even if it's at the front of the room. I don't mind being disruptive at that point.

Since we're still beating this dead horse, I'll toss in another lick. One of my pet peeves about seminars (of any type) has always been the Q&A time. Occasionally there are good questions on important matters. Usually there are also some questions asked about complex or unusual singular situations which have narrow application and have virtually no relevance for 99% of the people in attendance. But almost every seminar has someone who asks a question they already know the answer to (or at least they think they do), with their primary purpose being to try and trip up the presenter in a vain attempt to impress everyone else in the room with their superior knowledge. They're usually easy to spot, and that's generally when I get up and leave (unless the signup sheet is held to the end).

Jack: Get over it. Yours isn't the only way. You don't have anything to prove. Everybody's different.

And to think, it all started with the IRS subtly converting tax preparers into glorified data entry clerks with the e-flinging carrot & stick. Very clever on their part.

Everybody's different. I find most seminars a colossal wast of valuable time, usually because the pace is boring. I've attended a few that were truly interesting, but they're the exception rather than the rule. And the valuable time consumed traveling to and from is a total waste. Online works best for me.

This is the off-season Terry, so things sometimes get hashed out in unusual ways. Sometimes the twists and turns help someone else out, and other times they are completely irrelevant. Sorry you're having trouble with the credit bureaus and ID theft. That has to be maddening. Personally, I'd at least run this by a lawyer to see if there's some sort of opportunity to get some satisfaction. Just remember, if it can't kill you and eat you for dinner, you can probably deal with it.

I don't know the specific answer to your question, but there's a work-around I use in Drake and I think I used it in ATX as well (back a long time ago when I was using ATX). When I'm running any type of scenario, I enter the relevant info in a sub-schedule or worksheet in both locations. Then I enter a corresponding negative entry in one of the worksheets to null out the original entry. That gives me the result using location "B". Then I delete the negative entry in location "A", enter a negative entry in location "B", and note that result. When I decide which is best, I delete the entire form for the entry I'm not going to use. This approach has the advantage of keeping me aware that one or the other entries must appear on the final return. Sometimes it's too easy to get lost in the weeds when running scenarios.

Good question. I'm still rolling this around in my mind, but I'm sticking to the concept that FMV is fluid. It is always the intersection of what a willing buyer will actually pay and what a willing seller will actually accept. So the FMV of the equipment sitting at the scrap yard is $100 and the FMV of the equipment sitting "where is/as is" is $50. Unless there is another wiling buyer (not likely in this case), those two facts are established. These are the only facts we have to work with. I suppose we could speculate endlessly about other scenarios.

Seems to me the FMV is one figure if the equipment is delivered to the scrap metal dealer and FMV is a a lower figure if the dealer picks it up where it sits. (Which I think agrees with Pacun's reasoning)

Also, the QCD must be done AFTER the person reaches 70.5. Simply making it in the year the person reached 70.5 would meet the RMD requirement, but to qualify as a QCD it must be done after the birthdate.

Start with email. Their reply gives you proof for your records that they received the message. If they don't reply, escalate to Certified Mail with Return Receipt.

This perspective of "investing the money myself rather than giving an interest-free loan to the government" brought back memories of how I actually handled the conversation many years ago (when the interest rates were high enough that it mattered). I'd usually take a look at the amount of interest/dividends that the taxpayer was already reporting. In cases where they actually had significant savings/investment income already, I'd have the conversation about dialing in the withholding to match the liability. But if they had negligible savings/investment income, I'd generally just tell them it's better to overpay than to owe when they file. Most of the time that would end the conversation, because they were unlikely to save/invest the difference and were just repeating a phrase they had heard somewhere, without any real appreciation for what it took to follow through.

Good question. I usually don't charge if it's fairly simple, but might do so if lots of requests start coming in. Drake produces a projection that shows what the difference would have been under the new tax law. But of course that's lonely relevant if the elements of income & deductions are roughly the same. Does ATX produce a similar analysis?

No matter the reason for the outcome, most unhappy clients are going to blame the preparer.