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Husband suddenly died in 2015. Husband and wife filed

Husband suddenly died in 2015. Husband and wife filed jointly (and disclosed it was H's last tax return) in 2015.H had IRA with bank. W was sole beneficiary under IRA.W paid all RMDs on H's and her IRAs in 2015.W paid all RMDs for her and H's IRA in 2016.Due to extreme grief due to shocking death of H, W does not notify bank custodian of H's IRA that H died until Jan 2017. At that time, W elects to assume ownership of H's IRA (spousal transfer) and keeps new IRA with bank.After learning of H's death, bank issued 2016 tax year 1099R as to H's IRA in H's name, deceased and under H's SSN.W was the party who received the 2016 tax year distributions from H's IRA and thus it seems that W should be reporting this income.What is the correct way to handle. I understand that there is an IRA form to fill out of a payor refuses to correct a 1099 form. I also understand that deceased H's estate may be able to fill out a nominee 1099 form or maybe H's estate can fill out a form 1041 estate income tax return with all the income going to W via a form k-1.What is the best option here?

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Stephen G.

Sr Financial & Tax Consultant

Bachelor's Degree

11,012 satisfied customers
I have a question regarding filing a 1040X for 2015. It's a

Hello. I have a question regarding filing a 1040X for 2015.JA: The Accountant will know how to help. Please tell me more, so we can help you best.Customer: It's a bit of a long question with some context. Should I paste it into this chat window?JA: Is there anything else important you think the Accountant should know?Customer: This is related to tax preparation related to rental property assets.Context: I used TurboTax to prepare my personal taxes in 2015, which includes rental properties. While preparing my 2016 taxes, I noticed that the acquisition 'cost' values for a few of the assets associated to one of the rental properties were not reflected correctly. So, I checked my 2015 return and it appears they were not entered correctly in that return either (2015 was the first year these assets were placed in service). I'm 50% owner of the this particular rental property, and I was assuming that I could enter 100% of the cost values for these assets and that TurboTax would allocate the cost values by 50% ownership (like TurboTax does for revenue and expenses related to rental properties). But, I know realize TurboTax didn't adjust it in this way.The net effect is approximately $10K in total asset costs, or $5K for the 50% allocated to my return. This is spread across ~5 assets placed in service in 2015 (i.e. new washing machine, etc.).So, I'm looking for the best way to proceed. My assumption is:1) Complete a 1040X, sign the 1040X document, and attach the Schedules/Forms that changed. In this case, it's Schedule E, Form 8582, and Form 4562 that contain line item values that changed.2) Re-transfer the data from the (now amended) 2015 tax return into TurboTax so that the updated/amended depreciation schedules are reflected for the 2016 return. Proceed with 2016 tax preparation using this updated data.A couple questions related to this approach:1) Is this the recommended approach?2) Note: I've created an initial draft of the 2015 1040X using TurboTax in this way, and there are no changes ($0's all the way down the form) to the 1040X itself. I believe this is because all the rental losses from depreciation, etc. were already all disallowed (i.e. creating more passive loss carryovers), so these +5K in adjustments simply reduce the disallowed amounts (i.e. reduce the passive loss carryovers), but don't change the final Schedule E total, and therefore don't impact the taxes owed for 2015. So, my question is:Does it make sense to file a 1040X where all the values/adjustments are $0, and the net tax is exactly the same, but then to send in updated Schedule E, Form 8582, and Form 4562 along with the 1040X? I don't want to create confusion with the IRS by sending a 1040X with all 0's for the adjustments.3) Alternatively, since it appears the net effect with a 2015 1040X approach is $0, would it be an acceptable alternative to simply adjust the asset acquisition 'cost' values in 2016 tax return to the correct values and skip the 1040-X for 2015?

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Brian Michels

Partner

Bachelors of Business Administration

212 satisfied customers
A friend of mine is getting a divorce, and he always allowed

Good Morning,A friend of mine is getting a divorce, and he always allowed his former spouse to handle all of their finances. Foolishly. After looking at his tax returns to submit to divorce attorney, we discovered the last several years she has been filing their Federal and State Income taxes as Head of Household or Single, alternating years between them. They have never been legally separated to justify a Head of Household or Single status. She claimed tax credits (Home Energy 5375 and HSA 6350 on his taxes, which were completely fictitious. And now, his 2016 return has been rejected several times by IRS.She has been receiving EITC credits and several thousand of dollars in tax refund $$ directly deposited into a separate account from his. Meanwhile, he has been owing the IRS, that thankfully she did pay those. He is petrified.He wasnt he paying attention to what she was doing b/c he trusted her with their money after 20 years of marriage. Not a good excuse, but that is the case. Any possibility he could get Innocent Spouse relief or something like that?Any advice would be appreciated. thanks for your time.

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emc011075

Tax advisor and Enrolled Agent

Bachelor's Degree

5,572 satisfied customers
My son's divorce was final on Dec 8 2015. His ex-wife filed

My son's divorce was final on Dec 8 2015. His ex-wife filed her tax return as single and claimed both children, thus getting a large refund and did not split the refund.JA: The Accountant will know how to help. Please tell me more, so we can help you best.Customer: My son did not file taxes for 2015. He is wondering if it is legal that she could do that since he was head of household for 11 months of 2015 and they were still living in the same house even after the divorce. He did not file income tax in 2015 (we are working on getting that taken care of)JA: Is there anything else important you think the Accountant should know?Customer: I dont think so, except that he was the main source of income for the 11 months in 2015...

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Stephen G.

Sr Financial & Tax Consultant

Bachelor's Degree

11,012 satisfied customers
Investment advisor: The people that handle my defined

Investment advisor:The people that handle my defined benefit plan- Benetech informed me today that I am nearly at the peak that I can have in the plan and I might not be able to invest more money in it next year. I have about $1.9 million and am in the process of putting in $320K for 2016. So next year I may not be able to I vest much for retirement. I am an ER doctor and had been investing $200K or so but they say- they have not given the final determination- that I might not be able to invest much next year. What else can I invest in that will defer income? Can I put money in an SEP? I still have to continue to invest for retirement. Benetech said that they are looking into whether the use of my wife as an employee will increase the possible contributions as she does some work in my ER business. What are my alternatives to invest for retirement and defer current income since I might not be able to put money in the Defined Benefit?Tom K, ER doctor in Texas age 66. Plan to work 4-51/2 more years

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182 satisfied customers
I borrowed money to purchase my stake in a multi-member LLC.

Hi, I borrowed money to purchase my stake in a multi-member LLC. I do not materially participate in the business operations of the LLC, so I am a passive partner. How and where do I enter the interest for that loan on my tax return?JA: The Accountant will know how to help. Is there anything else the Accountant should be aware of?Customer: I don't have any other relevant info.

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Stephen G.

Sr Financial & Tax Consultant

Bachelor's Degree

11,012 satisfied customers
I have a single member LLC I created in 2006. I never used

Hi,I have a single member LLC I created in 2006. I never used it nor reported anything to the IRS about it. It has been inactive.I incurred very large expenses in August 2016 related to investment into a large real estate deal of which I am one of dozens of other investors.I would like to run these expenses and FUTURE profits through my LLC, that I would like to Retroactively Elect S-Corp status Effective Date of January 1, 2016 (calendar year end 12/31).I would like to File Form 8832 and request S-Corp status (for 2016).On March 15 S-Corps were due and I did NOT file for an extension until March 17,2017.Question 1: I would like to request Jan 1, 2016 to Dec 31, 2016 (past year) to have S-Corp status be valid. Can I go back that far and request S-Corp status?Question 2: I assume my extension is NOT valid because it was not filed by March 15.Question 3: Do I need to file an 1120-S with form 8832 as soon as possible to avoid any more penalties or late charges?Question 4: Do I need to file a form for LATE ELECTION? Is that form 2553??Question 5: I thought about requesting S-Corp status starting August 1, 2016 and ending July 31, 2017, that way I am NOT late with my filing. Is my thinking correct? Would that work to avoid any late filing penalties or fees?Thank you for your help.

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PDtax

Owner

Master's Degree

7,908 satisfied customers
If a business is an LLC and a Co-Op; does not have a

If a business is an LLC and a Co-Op; does not have a partnership agreement and is run by a board of directors that changes annually - AND has not filed IRS Form 8832 to file as a corporation - who is responsible for any tax liability?

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PDtax

Owner

Master's Degree

7,908 satisfied customers
LLC Ownership & Tax Implications For a US citizen living in

LLC Ownership & Tax Implications For a US citizen living in UK.I am planning to go into business with a colleague who lives in Montana to sell environmental software (that we are developing).We plan to create an LLC to sell the software in North America and plan to incorporate the LLC in Delaware or Wyoming.I believe I have two options in terms of how I own the LLCa. In my own nameb. or through a UK. Ltd Company that I create.I have dual nationality with the UK and own a dormant Ltd Company I set up a number of years ago to provide consulting services.Since I live in the UK (and I am a dual national) I anticipate I will have to file tax returns in the UK and USA.What are the Pro's and Con's related to Tax associated with each option?What is best option to minimise my global tax exposure?

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Matthew Breecher

President

MBA

58 satisfied customers
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