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The information is for 2023. Sch C net income is projected at $20,000. The wife is 66 retired and on Social Security. The taxpayer was employed in 2022 and always had a Sch C side business.

Married taxpayer (age 75) retired in Dec 2022 from his employer who provided 75% health insurance (medical and drug) coverage as a tax-free benefit-employee paid 25% through payroll deduction. For retirees the company will reimburse him 75% for Medicare part B and D premiums for taxpayer and wife. Taxpayer has always operated SchC business (no employees). He also has supplemental medical insurance for dental and vision and tax qualified LTC for himself. Question 1. Is 25% portion for health insurance deductible (line 17) on 1040? Queston 2. Are the supplement insurance premiums also deductible (line 17)? Question 3. Does he have to have a written plan in place under 105b) or 106(a) to take the supplemental medical and/or LTC deductions? Question 4. If his wife gets a LTC policy can he deduct those premiums?

He paid his 1/3 share of the real estate taxes each year. This was shown on Sch A, but he did not itemize for any of the years in question.

DANRVAN, So in your reply you are saying that the step-up basis of the other brothers is added to the oldest brother' basis since the July purchase via court partition sale is considered a related party transaction. Correct? In reply to your second thought above there were no expenses listed as part of the July court partition sale, but when the escrow money is finally paid out we are expecting that the oldest brother will receive an adjustment for the unpaid taxes by the other brothers. Would that be considered a basis adjustment? expense? I assume the back taxes will be taken out of the escrow so will that be a basis adjustment? expense?

Just to clarify The Nov sale was to an unrelated party. The July purchase was the result of a partition sale ordered by the circuit court in which the oldest brother gained sole title to the property. After reading the posts here is my summary: Oldest brother's tax basis: 33,000 from 1/3 share per mother's estate 52,667 From 2/3 share via purchase in July 85,667 Total Total LT ST Sales Price 102,000 34,000 68,000 Basis 85,667 33,000 52,667 Gain 16,233 1,000 15,333 The above ignores any final adjustment from the escrow. Agree? Questions: 1. If the oldest brother would receive, say 5000 as reimbursement for the taxes he paid out of the escrow funds this would not be taxable to him, correct? 2. Any legal fees he incurred with respect the above transactions would be taken either as an adjustment of the sales price or added to cost basis and allocated 1/3 LT; 2/3 ST unless they could be specifically identified.

Yes, we are waiting for the escrow settlement to be finalized to determine how much he will receive out of the $79,000. Thank you for your reply. Art

Sorry for the long background. This is a rather complex situation and I need help. My taxpayer (oldest of 3 brothers) and their father operated a towing service for many years as a C Corp with all four owning equal shares in the business. The mother was the sole owner of the land and the building on which the towing service operated as well a separate parcel for the family home. Over the years there arose a heated dispute regarding the towing business and the 2 oldest brothers withdrew participation after the father passed away. When the mother passed away in July 2012 the ownership of both parcels passed by the provisions in the will to the sons as tenants in common 1/3 each. After the mother’s death the business (now operated by the youngest son) fell off and the properties fell into disrepair and property taxes fell in arrears. The youngest son had pulled out all of the equipment out of the building and moved to a different location. During all of this the 2 oldest sons were trying to sell all of the properties and get the whole situation settled, but the youngest son refused to sell. In July 2023 the parcels were sold for back taxes and the oldest son purchased the parcels for $79,000. The funds are currently held in escrow pending legal squabble over how much should each son get. My client paid for his share of the taxes each year, but the other sons did not pay their share. The estimated FMV at the time of the mother’s death was $99.000. To further complicate matters the oldest son sold the properties for $102,00 on November 10, 2023. Questions: Assuming the other sons’ share would be adjusted to reflect their share of the unpaid taxes, what would be the cost basis to determine gain or loss? FMV at mother’s date of death? Holding period over 1 year so capital gain or loss? How to calculate the oldest son’s gain or loss? Would his basis include any amount from what he had to pay to acquire the property at the tax sale ($79,000)? If the escrow is not released before year end, what to report on 2023 tax return? Any suggestions from more experienced preparers most welcome.

Thanks for the feedback and heads up on the Cinven connection. I in the process of demoing TaxAct since I am basically concentrating on individual returns. So far the cost savings may not justify the lost of features in Drake and the effort to learn a new software system in this stage of my career.

Does anyone have experience using Tax Act? I am considering other tax preparation software for my small tax practice and would welcome your feedback.

Thanks everyone for your suggestions...much appreciated

Bulldog Tom, Thanks for your suggestion. I just tried Genius Scan and it looks good.

I have many clients that do not have access to stand alone scanners so they take a picture with their phone and I get a jpeg image that is almost unreadable mainly because the image is way too small. I could get a photoshop type software and try to get a workable image, but that is a lot of extra work. Does anyone have a good alternative?

Danrvan The other items listed are on supplemental documents from the broker and are not reported to the IRS. The computations only affect the state return as any muni interest not specifically excluded by the state is taxable on the state return.

What adjustments (if any) do I need to amount shown in line 8 ? These always confuse me. Broker reported the following on 1099-INT Line 8 32,492.16 Tax-exempt accrued interest paid 577.78 Tax-exempt OID 58.97 Tax-exempt OID (lots not reported) 1793.03 Acquisition premium (lots not covered) 103.51

That was my gut feeling as well, but always open to other' opinion. Thanks

Taxpayer wants to install solar at his residence. Roof mount is not feasible on his house due to limited southern roof exposer and ground mount is not feasible due to municipal code restrictions His only solution is to build a storge shed and do a roof mount installation. Question: Can he include the cost of constructing the shed as part of the qualifying cost for the 30% solar credit?

Thanks for the quick confirmation.

TP mother has 2 children from previous marriage, divorced in April 2022, has full custody, ex does not provide any support. Mother lived with new boyfriend all year. Mother's AGI $75,000, boyfriend $60,000. My understanding is if mother can prove she provided more the 1/2 cost of home and the chldren's support, she should be able to file as HOH and claim CTC. Correct?

Thanks for the replies and suggestions.

Taxpayer, cattle rancher, sold all of his cattle in 2022 and got out of the business. He has sheds and out buildings that were used in his business and still have undepreciated cost that he wants to write-off in 2022. My understanding is the fact that the taxpayer decided to cease business does not effect the useful life of the asset and he can not simply write-off the remaining cost. I am correct? or am I missing something? Comments

Thanks for all of the replies and advice. Client finally did get Clickworker to reply and they closed the account. Client is following up with credit agencies with credit report and freeze, IRS fraud hot line, getting a transcript from the IRS, and identity theft pin, ect. We will attach 8275 to the return to disclose the fraudulent 1099-NEC.

Taxpayer received 1099-NEC from Clickworker.com for 2022 in the amount of $1979 showing masked SSN with her last 4 social security numbers and her correct name and address. She has a very common first and last name so a clerical error by the company? She is absolutely positive she did not perform any services or receive any goods from that company or any other company. She has contacted the company to get the matter resolved, but they are uncooperative. She suspects identity theft and wants to file a 14039 immediately. Is this the best action to take? Call IRS Identity Protection Specialized Unit at 800-908-4490? Suggestions??

Thanks for the quick replies.

Mother and 13 year old son each received $6250 of social security in 2022 based on the father's (age 61) social security payments. The son has no other income so his payments are not an issue, but are the payments the mother receives taxable income that must be included in their joint 2022 return? These payments are not SSDI. The son is not disabled.

Thanks for all of the replies. In response to Sara's point, the parents received a total of $5600 in EIP (husband, wife and both children-son and daughter). Daughter got separate $1400 check. If we tried to e-file the parent's return and not claim the daughter we would lose the $500 other dependent credit and possibly $1400 of EIP?? Lion's suggestion-paper filing and claiming the daughter seems to be the "cleanest" way to go and let the IRS deal with the daughter. NO guarantee this will be processed without IRS inquiry on the parent's return, but seems to be the best option.