Talking with TaxSpeaker: (Video 86)
1. I just had a quick question about secure emails. I want to take more steps to protect myself and my clients. Do you have any recommendations of what to use?
2. I have a question on what is an acceptable form of electronic signature on an 8879PE. Do you have clear guidance on this, or can you refer me to where I can find really clear guidance on this? I seem to be finding confusing information in even the IRS publications. Thank you
3. I heard from a recent webinar that IRS requires offsite data backup to be stored in the USA and not overseas. Is this true? I have Carbonite PRO ($800). I have been attempting to verify with Carbonite that files are stored in the USA, but they do not respond except to ask me weekly if my issue is resolved.
4. We took the 1040 tax in depth webinar in December 2019. Helen (my associate) seems to remember that there was a suspended depreciation on vehicles that took the Section 179 depreciation in a prior year. I have a C-Corporation client that purchased a 2017 Ford F150 in 2017. We took the §179 depreciation of $11,500 plus $60 for bonus depreciation in 2017 and my tax software picked up the depreciation in 2018. I have the capability to do a projected 2019 depreciation from my 2018 tax software and that worksheet picked up $1,433. However, now that I am working in the 2019 software, the depreciation has changed to $0. Am I missing something?
5. Facts: Husband waited until 70 to collect Social Security…His wife is 15 years younger…She currently works but wants to retire at 65 once she is eligible for Medicare. This is before her full retirement age (FRA)… Husband’s SS benefit is higher than his wife’s…Question: When her husband dies after she reaches her FRA, will her surviving spouse benefit be decreased because she retired before her FRA?
6. I have an S-Corp client that has had losses from operations since his corporation began. The 100% shareholder personally loaned the corporation money to support the losses. The company started being profitable for the last few years and the shareholder was able to start repaying the loan. Since some of the loan was used as basis for losses in prior years, I reported some of the loan repayment as long term capital gain. He has now sold the business and repaid 100% of the loan. My basis worksheet shows that he still has loan basis equal to the amount that he picked up as income due to the loan repayments. Does he get to deduct this somehow? If yes, how?
7. Are you hearing about any further hopes for restaurants to be able to depreciate improvements over the shorter 15 year life? Dealing with a small company that doesn’t have audited financial statements, doesn’t report to the SEC and is not required to report to a government agency outside of the annual tax return. So, my interpretation, the company isn’t allowed to use the safe harbor of expensing 75% of the costs for these expenditures. If you’re hearing any rumblings about changes to restoring the 15 year life, it might be worth extending the return and waiting it out.
8. An LLC taxed as partnership had two partners. Starting 1/1/2019 One partner purchased the other partner share and now only one partner owns 100% of the LLC. How to revert back to single member llc for tax purposes??
9. Starting 2019 I will report all income/expenses on form 1040 schedule E but not sure what to do with old LLC... how would irs know we have revert back to Single Member LLC and would it be a zero 1065 return because all 2019 income will be reported on 1040.
10. What are you doing to satisfy the Form 8867 certification requirement for 2019 tax returns filed for taxpayers claiming EIC, CTC,ACTC, ODC, AOTC and HOH? Do you have a checklist?
11. Three brothers and two sisters have equal interests in an LLC taxed as a partnership. LLC owns farmland which it cash rents to one of the partners. In addition, there are two residences on the farm which they rent. Question is this - Since this is common ownership, the rental income from the farmland is QBI. However, the residential rentals do not meet all of the criteria for the safe harbor, so that income isn't QBI. Is my analysis correct? Thank you.
12. I should have asked this at the class, but didn’t want to sound ignorant. In regards to the new question on the 1040, is Venmo considered virtual currency? I have many twenty-something clients that use Venmo to pay friends back when splitting a restaurant bill. Do we answer “yes” on the IRS question, even if they aren’t using Venmo for business purposes? I understand that Venmo transactions within a business would have tax consequences, just like Zelle would have.