Vehicle donated, sale pending

[Possi]

My client donated a vehicle in 2019. 

There is a pending sale of the vehicle for $1800.00 right now, 2020.

I believe we can either take the $500 donation for 2019 OR WAIT and take the sales price in 2020 when the 1098C is given. 

Am I right?

[Abby Normal]

I can't believe you have a client who can itemize. I haven't had one yet this year, so far. Those usually come in later.

The donation was in 19, so the deduction can only be taken in 19. Wait for the sale amount. The IRS might send you a notice and then you can send them the 1098C with explanation.

[Possi]

7 minutes ago, Abby Normal said:

I can't believe you have a client who can itemize. I haven't had one yet this year, so far. Those usually come in later.

The donation was in 19, so the deduction can only be taken in 19. Wait for the sale amount. The IRS might send you a notice and then you can send them the 1098C with explanation.

You crack me up. Mine itemize because of charitable contributions! Woop woop! Some still tithe! 

Thank you for clearing that up for me. I do have a letter with a potential sale amount. 

[jklcpa]

I've had one over-65 client that is itemizing for state purposes with some medical .

 

[Lee B]

In Oregon since the state standard deduction is so low, we have a new Oregon Schedule A, therefore anyone that owns a house will itemize for state purposes.

[Medlin Software, Dennis]

I made it to itemize this year because of charitable bundling (which I have selected odd years).  SALT limit is also a factor this one last year (making some changes for 2020).

[BulldogTom]

3 hours ago, Possi said:

Mine itemize because of charitable contributions! Woop woop! Some still tithe!  

Time for me to brag.   Both my sons - Age 27 and 24 - itemized this year.   They still tithe even after going out on their own.   Nice to see that some life lessons we taught them stuck.

Tom
Modesto, CA

[Abby Normal]

16 hours ago, jklcpa said:

I've had one over-65 client that is itemizing for state purposes with some medical .

 

You can do that in DE, and some other states. MD hasn't gotten with the program and their standard deduction was never indexed for inflation so the gap between the federal standard deduction and the MD standard deduction is huge.

[jklcpa]

7 minutes ago, Abby Normal said:

You can do that in DE, and some other states. MD hasn't gotten with the program and their standard deduction was never indexed for inflation so the gap between the federal standard deduction and the MD standard deduction is huge.

Yes, I realize that and it goes along with your statement that not many early returns are itemizing as before because of the higher standard deduction. Sorry if my post was lacking in clarity or completeness.

[Abby Normal]

7 hours ago, jklcpa said:

Yes, I realize that and it goes along with your statement that not many early returns are itemizing as before because of the higher standard deduction. Sorry if my post was lacking in clarity or completeness.

When we do DE returns, we just fax them the federal Sch A. Is that what you do? DE is so backwards in some ways.

[Abby Normal]

23 hours ago, cbslee said:

In Oregon since the state standard deduction is so low, we have a new Oregon Schedule A, therefore anyone that owns a house will itemize for state purposes.

I emailed the MD governor this morning asking him to push for this and also to raise the MD standard deduction and tax brackets to what they would be if they had been indexed for inflation, then start indexing everything in the tax law for inflation.

[jklcpa]

4 minutes ago, Abby Normal said:

When we do DE returns, we just fax them the federal Sch A. Is that what you do? DE is so backwards in some ways.

You can do that so that client doesn't receive a notice for "missing" information. I usually send the federal e-file first if it is claiming the standard deduction, and then after acceptance which is usually within a few minutes, then I go back into the file to force the federal to use Sch A and send only the DE return. Nothing really changes as far as IRS is concerned because that return is already filed, but it allows the Fed Sch A to transmit with the DE return. DE is one of the states that developed its own version of Sch A this year, probably to help eliminate errors related to the SALT limitation, but DE still wants all of the Federal forms, so this is the only way to actually have it transmitted without faxing or emailing the Fed Sch A separately.

[BulldogTom]

1 hour ago, jklcpa said:

You can do that so that client doesn't receive a notice for "missing" information. I usually send the federal e-file first if it is claiming the standard deduction, and then after acceptance which is usually within a few minutes, then I go back into the file to force the federal to use Sch A and send only the DE return. Nothing really changes as far as IRS is concerned because that return is already filed, but it allows the Fed Sch A to transmit with the DE return. DE is one of the states that developed its own version of Sch A this year, probably to help eliminate errors related to the SALT limitation, but DE still wants all of the Federal forms, so this is the only way to actually have it transmitted without faxing or emailing the Fed Sch A separately.

Interesting.  I just leave the A in the federal return when I take the standard deduction on the federal side and  Itemized on the CA return.   It seems to be working and the Federal return shows the std ded.  Am I doing something wrong?  Or is there something different about DE that makes you go through that process?

Tom
Modesto, CA

[Possi]

2 minutes ago, BulldogTom said:

Interesting.  I just leave the A in the federal return when I take the standard deduction on the federal side and  Itemized on the CA return.   It seems to be working and the Federal return shows the std ded.  Am I doing something wrong?  Or is there something different about DE that makes you go through that process?

Tom
Modesto, CA

Curious to get this response. I have a couple of clients in DE and I'm not real familiar with all the nuances. 

[JRS]

11 minutes ago, BulldogTom said:

Interesting.  I just leave the A in the federal return when I take the standard deduction on the federal side and  Itemized on the CA return.   It seems to be working and the Federal return shows the std ded.  Am I doing something wrong?  Or is there something different about DE that makes you go through that process?

Tom
Modesto, CA

That's the way I do it for Ca.  I did for years with ATX and am doing the same with Drake.

[jklcpa]

22 minutes ago, BulldogTom said:

Interesting.  I just leave the A in the federal return when I take the standard deduction on the federal side and  Itemized on the CA return.   It seems to be working and the Federal return shows the std ded.  Am I doing something wrong?  Or is there something different about DE that makes you go through that process?

Tom
Modesto, CA

By doing it that way, I don't believe the Sch A is actually transmitted with the Federal return because that return is using the standard deduction so the Sch A isn't required. You'll have to check the e-file for the actual forms transmitted.  CA may not require the Fed Sch A. Prior to this year, did CA have its own version of Sch A. 

Prior to the 2019 tax year DE never had its own Sch A, and the Federal A definitely was NOT included in the transmission and the client would get a notice unless it was sent separately via mail, email or fax.  The way I do it is the only way to actually have the Fed Sch A transmitted in the e-file to the DE when the federal claims standard.  I can't answer what CA does or requires.

[Lion EA]

I work in CT without state itemized deductions. But, I have clients that work in NY, CA, and other states WITH itemized deductions. Plus, why add up potential itemized deductions when my software will do it for me?! So, I almost always enter itemized deductions on the federal return. About half my clients end up with the standard deduction for federal. But, for states like NY and CA, all flows through to the state returns. I don't have to get used to the itemization form for six different states.

[BulldogTom]

6 minutes ago, jklcpa said:

Prior to this year, did CA have its own version of Sch A. 

CA does not have its own Sch A.   Never has that I can remember in the 20 years I have been practicing.  They use form 540CA (CA stands for California Adjustments) and they add or subtract income and deductions on that schedule.   They did introduce a new worksheet that you use to add in deductions that were eliminated in the new tax law that CA did not conform to (Employee business expenses is the big one).

Tom
Modesto, CA

[jklcpa]

1 hour ago, Lion EA said:

I work in CT without state itemized deductions. But, I have clients that work in NY, CA, and other states WITH itemized deductions. Plus, why add up potential itemized deductions when my software will do it for me?! So, I almost always enter itemized deductions on the federal return. About half my clients end up with the standard deduction for federal. But, for states like NY and CA, all flows through to the state returns. I don't have to get used to the itemization form for six different states.

Maybe I wasn't totally clear. DE has its own form, but the only way to get info to flow to the new DE Sch A is to enter the Federal Sch A input. The software does automatically choose the best method for Federal and State (standard v. itemizing), but it does NOT automatically transmit the Fed Sch A to DE. 

@BulldogTom, does ATX transmit the Fed Sch A if using standard deduction for Federal and itemizing for state purposes?

[BulldogTom]

21 minutes ago, jklcpa said:

 does ATX transmit the Fed Sch A if using standard deduction for Federal and itemizing for state purposes?

No clue.   Seriously, I never really looked.   I just have always included the A in the federal return so that my info shows up on the 540CA and let it fly to the EFC.   I will check the next time I send one.

Tom
Modesto, CA

[Lion EA]

I have a lot of states, but not DE. I enter the data on the federal Schedule A. I let the software populate any state schedules. I could enter directly on state forms. But so many of my clients have two or even more states; I don't want to risk missing a deduction, so I let my software populate the states from the federal.

For most states, my software sends to the states whatever the states require. But, I do not know what it would or would not send to DE.

And, of course, it chooses the most advantageous at both the federal and state(s) levels re itemizing vs. standard.