Return Required?

[michaelmars]

Have a client whose only income is covered sales.  In the past if sale amount was enough to require a return you had to file to offset the sale.  Now that the IRS gets the cost, would you still file?  Gross over 30k.

[jklcpa]

In determining gross income for the filing requirement, gains but not losses are used in that determination.  It is not the proceeds, but the gain that is taken into consideration.  That being said, even when the basis is reported to IRS and no gain exists, the AUR will be using only the proceeds side of the equation and this client will receive a CP2000 later on. These used to be 18 months, but who knows how long that will be now.

Yes, I would file a return. Also, consider the state requirements that may have a different method of determining income for the filing requirement, and many times is lower too.

Edited March 19 by jklcpa
fixed a word

[michaelmars]

I wasn't clear, there were almost no gains $300.

[BrewOne]

I agree with Judy--the filing requirement is not met, but weighing the benefits of filing versus having to respond to an IRS letter...better to file.

[joanmcq]

I agree.  I would file.

[Catherine]

17 hours ago, BrewOne said:

the benefits of filing versus having to respond to an IRS letter...better to file

Do you really want to face trying to respond to a letter in the summer of 2026? When all you need do now is file? And who knows how many computers will need to be pacified before you can talk to a person?

Do it the hard way, and make it easy on yourself and your client.

[michaelmars]

They may not want to pay be for a return with no income for their kids returns.   In the past I would say if the sales price was over the filing limit, definitely file but not irs gets cost..

[mcb39]

3 hours ago, michaelmars said:

They may not want to pay be for a return with no income for their kids returns.   In the past I would say if the sales price was over the filing limit, definitely file but not irs gets cost..

I am filing for six minor Grandchildren who were given  LT stock sales by their Grandfather.  He knows that I am filing the returns and he is going to pay. They get talked into this kind of thing and think they are saving money.  Well, I won't do his return if he didn't agree to these Kiddie returns as well.  He did some research and agreed that I was correct.