Talking with TaxSpeaker: Video 79
1. If a person receives a state refund and the person is limited to the $10,000 cap on Schedule A, can we not show this as income as he didn’t receive a tax benefit?
2. If a client/client preparer did not file 8606 in prior years for roth contributions, is it OK to prepare them on the prior year forms to support the basis when it’s being questioned by the IRS?
3. I attended the 1040 in depth on 12/2 and 12/3/2019 in WI Dells, WI. One item that was brought up related to paying wages to a partner in a partnership. CCA 201916004 was referenced. It was also indicated that signing a tax return knowing there was a deduction for wages paid to a partner claimed as a deduction on the return was a circular 230 violation. Can you expand on that more as I would like to share more information with others at my firm?
4. I am researching the rules for refinancing a rental property mortgage. Can a TP pull cash from the refinance of a rental property mortgage (used to build a personal residence) and still deduct the full amount of the interest on the schedule E or do the rules of "Buy, Build or Improve" tied to the rental property as well? Articles that I have read are conflicting as to the ability to deduct the full interest.
5. We were wondering if an employee who had a pretax HSA account through their employer, used that pretax HSA money to pay for a Long Term Insurance policy, if the reimbursements from the LT Care policy paid out to them would be taxable to that person at the time of reimbursement? We are getting hung up on the fact that they were paid with pretax dollars. Does this make any LT Care reimbursements taxable?
6. A schedule C business buys a truck in November 2019 which is 100% business. The owner retires in mid December 2019. Can he take the max bonus depreciation for 2019 and convert the truck to personal use when he retires? I think there would be no regular deprec since it was acquired and disposed in the same year. Are there any other tax implications?
7. I have a question on Switching from a C-Corp to a S-Corp: The C-corp has a non-calendar year end of Sept 30th. Can the C-corp simply file a short year from Oct 1 to Dec 31 and then file Form 2553 with the new year end of Dec 31? Or is there an election to be made or something else???
8. I’m seeking clarification on how to report matching contributions made by a partnership to a partner’s elective contributions, and also additional partnership contributions to the partner’s qualified profit-sharing plan account. The 2019 Business Tax In Depth manual, page 247, H. 5, says the partnership contributions are an allowable deduction on the partnership tax return, and the partner’s distributive share of this deduction flows through to the partner. Is the partner’s distributive share reported as a deductible guaranteed payment of the partnership on Sch K (which then flows to the partner’s K-1, line 4), and also reported as a deduction item on his K-1, line 13R, which he claims on his 1040, as an adjustment to income for self-employed qualified plan?
9. I have a handful of Doctor clients that are invested in a Partnership that owns a medical building. The clients received amended K-1s which increased rental income and reported on line 13 K the excess business interest expense. Then in the statements it states that this partnership is a small business excluded from the application of section 163(J) pursuant to prop. reg 1.163(J)-2(D). Since this partnership is a small business excluded from section 163(J) shouldn’t there be no amount reported on line 13 K? By reporting it on line 13 K, I have to add it to my client’s tax return which then makes me have to complete form 8990. The business doesn’t have excess business income to deduct the excess business interest expense, thus disallowing the expense. Am I missing something or should the K-1s be amended to remove the line 13K?
10. A client asks if they can "Opt-out" of ACA for 2020 and be reinstated for 2020? Please respond, thank you