Tax Talk

I'm a newer tax preparer, so any input would be greatly appreciated.Has anyone ever converted accumulated NOLs to PALs on a current return instead ofamending prior-year returns?My client is a Form 1120 filer with only rental income. They’ve been reporting the activity asan active trade or business and have generated NOLs for the past seven years. Now, they’replanning to sell some of the properties at a loss. Since only 80% of the NOL can be used,there will still be tax due due to depreciation recapture.I’ve heard that some tax professionals have reclassified NOLs as PALs when taking over anew client from a previous preparer who treated the activity as non-passive when it shouldhave been passive.In this case, the client has not been actively participating in the rental activity—possibly forthe past five years—so I believe the income should have been treated as passive. I ran thenumbers, and if the activity had been reported as passive from the beginning, theaccumulated PAL would be abou

I have a client who created an EIN for a irrevocable TRUST which was created from a revocable Living Trust after the death of the owner of the Living Trust.The original Trust documents never established a name of the new Irrevocable Trust. As a result the Lawyers at National Brokerage firm which holds the funds in the Living Trust is unwilling to move them into the new Irrevocable Trust.The Brokerage firm has suggest some names of the the new Irrevocable Trust they would be willing to use.The EIN obtained by the client has not been used for anything yet.Should the client request a new EIN Under the new acceptable name. I believe they could request the IRS to cancel the existing number , but that will take at least 60 days and this may create a financial burden on my client.Any thoughts?Thank you

I have a owner of a business 1120-S that is selling it's business to a third party with payment terms over a 36 month period. They are selling the business truck that was set up as a lease whereby the monthly lease payment was 100% expenses and the parts inventory (as the business is an automotive distributor) will also be sold to the buyer. My question is how is the gain or loss calculated on the leased vehicle since no depreciation was taken and only rent expense as paid on the lease? Also since it is a 3 year sale arrangement I will do the final return for the business and recognize the proceeds paid over the remaining years as miscellaneous income on the sellers personal return? I have not had this type of sale of a business before. Your assistance will be greatly appreciated.   

The taxpayer is 64 years old and is a general contractor.  he is winding down his business. He is a sole proprietor. His 2022 net income was $125,000. His 2023 net income was $125,000. His 2024 net income is $0. His 2024 P&L shows huge increase in payments to subs and for supplies.   He expects that his 2025 net income will be 0. He never looks at his profit and loss statement prepared by the bookkeeper*. He reviews his bank statements and cash balance and makes a determination about his company profitability based on trends in his bank account balance. In 2024 he had three home remodeling job where his customer underpaid him $35,000, $20,000 and $5,000.00 respectively.Is he hiding income or adding fictitious deductions? is he just a business manager lacking the financial skills to understand business finances? Or both? Or something else?I find this tax return interesting as it reveals the extent or lack of his financial acumen. I find that the value I add for him is

I am in the process of filing forms for an estate in MassachusettsThe assets at death of the second parent to die were transferred from a revocable Living Trust to an Irrevocable Remainder share trust to be equally divide amongst three beneficiaries.The assets are a combination of securities and Rental Real Estate.The value of the Remainder trust exceeds the $2 M limit , thereby requiring the filing of the estate tax form m-706.Do I file a Federal Form 1041and a Massachusetts form M-706?Massachusetts also references the need to complete a Federal form (706,1999 version) Do I need to do this since there will be no need to file a current form706?How do i handle the value of the rental property?Sorry for all the question.I have done estates in Mass in the past but this id the first time I'm dealing with a remainder Trust 

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TP has a S Corp K-1 with a $10K 2024 profit and F 7203 shows $4K allowed loss carryover.Per all the instructions and posts in the Community, I thought I could report $6K as ordinary business income on line one of the K-1 Wks. However, when I do that, F 7203 doesn't show the $4K loss allowed and shows the prior year loss carryover as the loss carryover to 2025.How do I get PS Professional to recognize the $6K profit instead of the $10K profit?Thank you.

lacerte says the following:In order for an e-filed return to be considered timely filed, it must be filed by 11:59PM in your respective time-zone on the defined deadline day.I am in New YorkWhat time is lacerte stopping to accept returns for timely filing on the 15th? 

Hi, all,I have two Texas SMLLC returns* to file via Lacerte. There is no indication in the Lacerte letter that the owner has to sign anything when I e-file. Is this correct or does the owner have to sign some forms?*TX2025 05-169*TX2025 05-102I understand that signer verification is not required for Texas and that e signatures are valid.Thanks,Michael

Hello Everyone,  I would like to ask if sending Form 8832 for a C-Corp election by fax is an acceptable method of filing. The instructions only provide mailing addresses and do not include a fax number.  Thank you!

S corp client had two equal shareholders (A & B). On 7/5/2024, A purchased B's membership interest for $340k making A the sole shareholder. Would the $340k go on A's Form 7203 as "Basis from any capital contributions made or additional stock acquired"? I know it's a silly question but I want to confirm before I give A all of that additional basis since it would allow him to take a loss from the business and avoid a gain on excess distributions.  

I have a CA return with multiple rentals, a sch C and points going to Sch A.  The depreciation adjustment per the forms 3885A is $8,172 but on the Sch CA it is $6,876.  I have traced the activites and for hours and can't find the issue, I think it must be a glitch.  Has anyone else encountered this?Thank you.

I am using ProConnect Tax to amend TY 2022 for a new client that has NOL (Sch C) carryforward from 2021.Income includes W-2, 1099 R (non taxable) & Sch C (net loss).Deductions: itemizedAfter entering everything, I am receiving the following critical diagnostic message: " NOL #1: The program doesn't automate the limitation of post-2017 net operating losses to 80% of taxable income, before taking into account any NOL deduction. You must override the amount of post-2017 NOL carryforward absorbed this year so it does not exceed the 80% of taxable income limit. If the net operating loss comes from an estate or trust Schedule K-1, enter the amount absorbed in that screen. US - Ref #53656".In calculating the taxable income wages less current year business loss Sch C) less itemized deductions (Sch A). My dilemma is Sch A includes medical expenses that fluctuate based on income. How do I accurately determine taxable income to apply the 80% rule?Wages 44,225Sch C (10,260)NOL c

I have a client who passed away. He lived in the US and his wife lives in Canada and has dual citizenship. When he passed away, his wife sold a property in the US that he had lived in and operated a Corporation out of that was held in the trust. The 1099-S was reported under the EIN of the trust. I paper filed the extension request but now trying to enter the information in Lacerte, there is nowhere to enter a foreign address. I came upon the following in the Intuit forum: "I don't think Lacerte Form 1041 allows the input of a foreign address for the fiduciary.Check out Section 7701 and particularly Regs Section 301.7701-7.  If the foreign trustee is the only trustee, the trust would likely fail the tests under §7701 and be classified as a foreign trust, which has tax consequences as well as reporting requirements that would otherwise not be applicable to domestic trusts."Is this true even if his wife is also a U.S. Citizen? If I can file it, how do I get around the fore

Hi professionals,I run into a case where a client lives in VA all year and have a new rental property in MD. The rental is having a net loss, and it's disallowed on federal return due to higher income.My question is whether the MD nonresident tax form is showing correctly. On page 2 of MD form 505, the Maryland Income column is all blank. It looks like the passive loss is also disallowed on state level.If I understand correctly so far, then is it necessary to file a MD tax return in this case? Do I check the box "Not required to file a MD tax return"? If my understanding is incorrect, please let me know what should show on Form 505 for the rental loss.Many thanks for your help!!

Proseries is limiting the amount of SE health insurance for a partnership because of at risk.  Is this correct or should we be able to deduct it because the k1 has included the health insurance payment in guaranteed draw?

Unlike other countries that use plastic or polymer notes for their fiat money, the US Treasury has confirmed that it will continue to use paper, even though a lot of it is made from imported Asian cotton and flax.  Unlike the United Kingdom, New Zealand, Vietnam, Mexico, and Singapore, we like to do things in the traditional way, even when it costs more.

MD resident until 2007, then moved and rented residence until 2023, when sold.Lives in PA, employed in PA, only had rental losses each year so never filed MD return.  Had over $200K in losses never claimed (PA doesn't allow it) to offset 'gain' on sale.  Forms 505 and 505NR convert ALL income to MD income (makes NO sense).  Can't seem to get any help ANYWHERE and telephonic hearing is tomorrow.Any experts out there know what form should be used and/or how this is reported? 

Does anyone do returns for online content creators? For now the following is a hypothetical question, but I am surprised it has not yet been asked here. Patron of the arts that I am, I contribute (voluntarily, not by subscription) to the support of a YouTube channel in the UK. What if a thousand other Americans do the same? Should the creator be filing US tax returns? And what should an American creator do with contributions received from dozens of other countries? Is the income sourced to where the videos are uploaded, where they are made, or where they are viewed? In many cases, it’s three different places. There are also online channels that provide both free content, and content that is available only to subscribers through platforms like Patreon. Should that make a difference? Some of it might qualify as tips, but only if it is reported and the taxpayer’s income is below cutoffs.

Every January I have been sending letters out to my clients via U.S. Mail.  In that letter I include a punch list of common items for them to gather for their upcoming tax meeting.  My list looks something like this: W-2s 1099s Mortgage statements Charitable contributions summary list Estimated tax payments made etc. This year I plan on sending this letter out in December.  My question is should I add to my list :"Last pay stubs of the year for 2025."  That brings up more questions.  Many people do not keep pay stubs.. And what about employers that they left earlier in 2025 and never thought of savings those paystubs.  I am asking this here as I was looking for input in how to get the info needed for overtime paid in 2025.  Overtime, as the latest update I have read, will not be shown on the 2025 W-2.  I know that not all overtime is qualfied overtime but putting that aside for a minute, where do we get the figure of ovetime paid.  And as

I have a client whose spouse inherited an IRA (Before the 10-year rule). When they opened the Inherited IRA they did not name beneficiaries. The owner of the Inherited IRA has died (After the 10-year rule). The account will go to probate, and the living spouse will inherit it.My question is, what type of account does the living spouse open? Would it be an inherited IRA in the name of the deceased spouse, or does it remain in the name of the originally deceased individual, and does the 10-year rule now apply?

Per call to ProSeries, there is a confirmed issue with two factor authentication.    For some reason, it has been turned off.   No pro-active communication that you need to go in to each user to setup again.I asked if and why this hasn't been communicated and was instructed to blast this information through this forum.  Only people who review this board will see this.  Why can't ProSeries be proactive when they know about issues.  Such a waste of time by users and the support team.  

The "Efile Clients" tab "Payment Method" and "Refund or Tax Due" columns are not matching the selected return payment method and the refund or tax due amount in the client's return.Example"Efile Clients" tab columns displays:Return TypePayment MethodRefund or Tax DueFed ExtensionDirect Debit$20,000CA ExtensionDirect Debit$50Federal ReturnDirect Debit$20,000CA ReturnDirect Debit$50 The clients return reflects the table below.Return TypeInformation Worksheet selectionReturn ResultsSettlement DateCommentsFed ExtensionElectronic Funds Withdrawal = Yes(for Extension)$1004/14/2025"Efile Clients" "Refund or Tax Due" should display $100(Direct Debit for "Payment Method "is OK)CA ExtensionElectronic Funds Withdrawal = Yes(for Extension)$504/14/2025"Efile Clients" "Refund or Tax Due" should display $50(Direct Debit for "Payment Method "is OK)Federal ReturnElectronic Funds Withdrawal = No(for Return)$20,000 "Efile Clients" should display "Check" Payment Method($20, 000 "Refund  or

 The jobs eligible for a tax deduction under the “no tax on tips” policy in President Donald Trump’s “big, beautiful bill,” according to a list from the Treasury Department obtained by NewsNation Tuesday. https://www.newsnationnow.com/business/your-money/jobs-covered-trumps-no-tax-tips/   Under "Home Services," however, electricians and plumbers are listed.  Taking a survey here, how much do you usually tip your plumber? For "entertainers," the list includes "Digital Content Creators."  If an Intuit employee answers your question on this forum, where do we send the tip?