Is there any way around being able to take advisory fees in 2018? I have a client who paid $7390 in advisory fees on his investments. Help

[sjrcpa]

I just finished one with $19K.

[caroljo]

Darn, I was hoping someone knew a work around, but I guess not.  Wow, I thought the $7390 was bad, but yours is even worse.

[rbynaker · Accepted solution]

Some states still allow it.  Enter it on the state-only misc section of Schedule A and see if it helps on the state tax return.

[caroljo]

Thank you for your response, but my state (Arizona) isn't taking anything that the federal does not take., except for medical expenses which they always have anyway.  

[rbynaker]

SJR and I are in the same boat in MD/VA.

I have an AZ one in my stack for tomorrow.  Have to try to make sense of the new rules regarding those 100% donation credits for public schools and other qualified charities.  I think there was a cut-off date when the federal rules changed.  So I *think* my client can still deduct the contribution she made in March 2018, but not the one she made in December 2018.  I saved the IRS email from this summer so I'll have to double check the dates.

Can I shout out to you if I run into a wall?

Rick

[abctax55]

@rbynaker   " IF " you run into a wall
I don't speak Arizona...so can't help unfortunately.

[caroljo]

Hi @rbynaker .  Finally something I can answer for someone else.  Those contributions are a charitable contribution on schedule A.  They are a dollar for dollar credit on the Arizona return up to the limit allowed, up to the Arizona tax liability  There are several different ones allowable:  Public Schools, "Qualifying Charitable Organizations", School Tuition Organizations, and "Qualifying Foster Care Charitable Organizations". There are different amounts for each of the organizations. They are completely deductible and the taxpayer has until April 15 to contribute and still get the credit.  Most of them have a code number you have to use, so let me know and I can get each code number for you.  I hope this helps a little.  

[poolcleaner]

:+1:

[rbynaker]

Thanks,

I've done them in years past.  We do a 321 and a 322 and I always have to keep good notes to know what year things were made in and for, and then make the adjustments so we're not double dipping.

I like the concept.  Basically the taxpayer gets to directly control how some of their tax dollars get spent.

Here's the IRS proposed regs:

https://s3.amazonaws.com/public-inspection.federalregister.gov/2018-18377.pdf

And looks like the effective date:

"The amendments to these regulations are proposed to apply to contributions after August 27, 2018."

So we still get the AZ credit, but the IRS deduction is reduced to $0 for post 8/27/18 contributions.

Rick

[caroljo]

Oh I did not know that.  Well, I have done a number of them incorrectly.  I don't think any of them had the 10,000 tax ceiling though so maybe I can slide by for now.  Yikes!!!

[TaxMonkey]

I just finished one with 293k.  Nope not deductible for them either.

[caroljo]

Oh my goodness.  That is terrible.  I guess I shouldn't feel so bad about mine.