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I HAVE A CLIENT WHO HAS MADE LITTLE INCOME FOR YEARS AND HAS

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NOT FILED TAX RETURNS AS...
I HAVE A CLIENT WHO HAS MADE LITTLE INCOME FOR YEARS AND HAS NOT FILED TAX RETURNS AS WELL HAD
NO EARNED INCOME.IN 2012 HE MADE ABOUT 12000 PROFIT IN SALES OF STOCK. HE HAD MORE MORTGAGE INTERST THAN THAT PROFIT. . DOES HE NEED TO FILE 2012.
IN 2013 HE MADE 1000 DOLLARS OTHER INCOME, NO EARNED INCOME, AND MORT INT PAIDS TENS OF THOUSANDS OF DOLLARS. NO NEED TO FILE, RIGHT?
IN 2014, ONLY PAID MORT INT, NO INCOME RECEIVED, , NO NEED TO FILE, CORRECT?
IN 2015, ABANDONED A PROPERTY, PRINCIPAL LESS THAN FMV. NO STATEMENT OF BASIS AND RECEIVED A NON TAXABLE GROSS DISTRIBUTION OF $3000. Filing would depend on basis of property, right?
IN 2016 DEBT FROM 15 WAS CANCELLED. ONCE AGAIN NO DATA ON BASIS. WHAT DO I NEED TO DO HERE?
Submitted: 2 months ago.Category: Tax
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Answered in 5 minutes by:
9/8/2017
Tax Professional: Megan C, Certified Public Accountant (CPA) replied 2 months ago
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,581
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Tax Professional: Megan C, Certified Public Accountant (CPA) replied 2 months ago

Yes he will need to file 2012 for the sale of stock to account for it;

In 2013, no return necessary

2014, no return necessary

2015, correct

2016 - you will need to file a return to substantiate that the taxpayer is insolvent, or pay tax on the cancellation of debt income

Please let me know if you need anything additional. If not, please rate positive.

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Customer reply replied 2 months ago
OK. THANK YOU FOR YOUR ANSWER, BUT IT FLUSHED UP ANOTHER QUESTION. NOW IN 2015 HE RECEIVED A NON TAXABLE DISTRIBUTION OF 3GS AND ABANDONED (!!) A PROPERTY THAT WAS WORTH LESS THAN ITS FMV. AS NO INCOME CAME TO HIM AND NO DEBT WAS CANCELLED, WHY WOULD A TAX FILING BE NEEDED? WOULD IT?iN 2016. HE GOT THE DEBT CANCELLED. THIS WOULD BE CORRECT POINT TO CALCULATE ANY TAXABLE INCOME FROM THE CANCELLED DEBT., RIGHT??? HOW WOULD THIS BE CALCULATED? IF HIS BASIS IN THE PROPERTY WAS SAY 120,000 DOLLARS AND HE GOT 140,000 IN DEBT CANCELLED, THEN THIS WOULD BE 20,000 IN TAXABLE INCOME IF HE WAS SOLVENT. IS THIS CORRECT?
Customer reply replied 2 months ago
DID YOU SEE MY FOLLOW UP QUESTION?????
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Megan C
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