Talking with TaxSpeaker: Video 81
1. New rule removes the age restriction for those over 70.5 with earned income to continue making deductible contributions to IRA. Old rule allowed for working spouse to also contribute for a non working spouse. Is there anything in the new rule that indicates if this is true for those who are both over 70.5, but only one has earned income? For example, if the working spouse has $30k-40K of earned income per year, could they contribute the full $7K (annual amount plus age catch up) for both the working and non working spouse? I am working under the premise that age catch up amount can still be used. However, if I am wrong on that part of the age restriction rule change, please advise.
2. Are 1099’s required for payments made to individuals who provide merchandise to sell. Example - consignment store receives merchandise, sells it and keeps a portion as their income. The remaining amount is paid out to vendor. Is the owner required to submit a 1099 for that payment?
3. Does the change of the beginning age for RMDs from 70-1/2 to 72 also change the 70-1/2 age requirement for Qualified Charitable Distributions from IRAs ?
4. My client, a VA resident, won $1M with the NC state lottery. They are regular “joes”. Both have W2 income, small itemized deduction, 2 kids. What last minute advice can you give to assist this client save some money in taxes? Also, strangely enough NC withheld state income taxes on the lottery winnings. Since they are VA residents, does NC have jurisdiction to tax lottery money?
5. How would an attorney’s office report lawsuit settlement payments made to their clients? All moneys were paid to the law office which then disbursed 66% of the settlement to its clients. I looked at the 1099-MISC but did not see any Box directly pertaining to this situation.
6. Two part question: Client sold his business...large capital gain...and had over $400,000 of Sec 179 assets included with the sale. I can't find where on Sch D, to put the gain from the sale of 179 assets....AND....most of the 179 assets were long term......how do I report short term vs long term gain of 179 assets?
7. Should a 2018 tax return that filed form 982 for insolvency since the Exclusion from Gross Income of Discharge of Qualified Principal Residence Indebtedness wasn’t available amend return for Form 982 changing to this exclusion?
8. Bob spoke about the credits for new pension plan set ups. He repeatedly referenced the costs of the CPA’s involvement as qualifying. How about the set up costs charged by the pension custodians? Do they qualify too?
9. I have a client whom we filed S Corp election, requesting late election to be granted effective 1/1/19. We began payroll at the time the election was requested. The S Corp election was granted beginning 1/1/20. What steps should be taken to correct payroll and EFTPS deposits.
10. Taxpayer passed away recently. His property, both real and personal was held by a revocable trust. Trustee wants to sell all securities and distribute proceeds to beneficiaries.. Will these securities receive a step up in basis for purposes of computing any gain or loss?
11. If a shareholder in a multiple shareholder S Corporation dies and leaves his interest in the S corporation to another shareholder or shareholders, how is the AAA balance for the deceased shareholder reported on the Form 1120S K-1, for allocation purposes? Since the AAA account is a corporate account, does the book basis of the AAA of the deceased shareholder get allocated to the recipient shareholders or not accounted for at all on the recipient shareholders K-1s.