Video 136 (3.2.21)
38m
Talking with TaxSpeaker (Video 136)
1. I have an LLC that received a taxable CARES Act grant. They operate rentals in the LLC. All income is reported on form 8825. Would the grant be reported on form 8825? Or page one of the 1065 and then be subject to SE tax?
2. Regarding your bonus comment about MFS vs MFJ, I thought it was great insight, and I've been running the comparisons for every client now. A colleague mentioned a caution, if the clients are on medicare, the higher income spouse might get hit with higher premium, a downside to MFS. Thoughts?
3. I had a client call and their previous preparer filed their return married filing separately, but Roth IRA contributions were made. They did not meet the income limit exception so the contributions should not have been made. This was done for 2016, 2017, 2018, and 2019. Do I file Form 5329 and treat all of the contributions as excess contributions and pay the 6% penalty per year and have them withdraw the contribution plus earnings? What about the earnings? Is that taxable?
4. If you have truly small business client. Sole Prop. Who has no employees, No Subcontractors. And had a 2019 Business loss. Is there any provision for them to get a PPP or any other federal grant funds? (p.s. I’m guessing 2020 would be a business loss also) I know about the $1000 EIDL Grant and potentially the EIDL Loan. (but client refuses to borrow money)
5. Have a client whose wife is a non-resident alien. She is not yet a U.S. citizen , nor is she considered a permanent resident or resident for tax purposes. She does have a valid social security number. The client did not receive the stimulus payments in either round for his wife. The tax software is showing the taxpayer is eligible for the stimulus payments (1,200 + 600) $1,800. My research shows the taxpayer is not eligible for the stimulus payments. Bob what are your thoughts?
6. I have an S-Corp. It has always been an S-Corp. Last year, the Corp paid out on a settlement to buyout one shareholder. Would the amount the Corp paid to the share holder be treasury stock? I have never encountered this before. Any pitfalls with accounting for it this way?
7. I have several sole proprietor clients who were quarantined here in the San Francisco Bay Area. They or their family did not have any Covdi-19 symptoms. Do they qualify for the Form 7202 Sick Leave Credit? The IRS Q and A #50 seem to indicate that they do based solely on the quarantine without any Covid-19 infections.
8. What does "quiet business meals" (the first line item) mean? And is the "?" in the group business meals b/c it is unclear whether this is "in restaurant dining" only or takeout/carryout? I would think this is 100% as long as a restaurant provides it for 2021 and 2022.
9. A question that I don’t deal with often. Mother and 24 year old Grad student adult daughter are on the same marketplace insurance for 2020. Daughter has provided and borrowed enough money to pay over half her support for 2020. Mom of course earned far more than daughter for year. Daughter moved to grad school in August and pays all her expenses and college costs. Can the APTC be allocated 100% to daughter (who will then get far MORE credit than given throughout the year) and 0% to mom (whose household income now exceeds 401% since it is just her now). Mom would have owed would have to pay back part of the original credit. If this is possible, should I not be so piggish and give at least .1% to mom and 99.9% to daughter – will this keep the IRS at bay? Both will file the 8962 and fill out part 4.
10. We’ve got a situation with a client where he was laid off last year due to COVID and opted to retire as he is over 60. He rolled over his company 401k into an IRA in April and was informed in September that his employer had overcontributed ~$8k in deferrals plus earnings. The employer is demanding repayment and the taxpayer has not yet made any payments. He received a 1099-R with code G for the allowed rollover amount and a 1099-R with code E for the $8k. We understand he needs to report the $8k in 2020 and remove the amount from his current IRA because it was not an allowed rollover contribution. However, what happens if/when he repays the amount to the employer? Would he qualify for relief under Code Section 1341 in 2021? Is there any way a repayment could reduce his taxable income in 2020? This issue has caused him to be over 401% of the poverty line and he now has to pay back all $8,300 of PTC he received during the year.
11. The IRS changed the mailing address for our state (MN) to Kansas City from Fresno CA for tax year 2020. If we can have to amend a return for 2019, do we send that return to Fresno or Kansas City?
12. I have a non-tax question: Episode 134 there is a chair sitting behind you that looks like one I have seen on FaceBook. You, however, are sitting in an older chair like the one I use. I’m getting a little (emphasis intended) older and am looking for a better chair. Any comment? And… I want to find chairs that are better for my employees.
13. I have a husband and wife in a LLC filing a partnership tax return.. The wife passed away in 2019. My question is in 2020 am I required to file a partnership return or does it become a single member LLC and has to be filed on the 1040 return
14. If the ERC is shown on the return as a reduction to wages, does that also reduce wages for the QBID?
15. If you already covered this, I apologize, I must have missed it. With the PPP loan forgiveness, I know that an S Corp shareholders basis is increased and it goes into the other adjustments account. What happens with an LLC forgiveness that is taxed as a partnership? Thank You
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