Answers to 2024 Q&As
Questions not answered live during the 2024 online seminars
| Question | Answer | Answerer |
| Most crypto transactions are tracked on the ledger. Therefore the tie to illegal activities is highly overstated | Attendee comment | |
| My understanding was that a federal judge imposed a nationwide injunction halting the filing of the BOI?? | According to the NSBA (National Small Business Assoc.) the bill was suspended until March 14, 2025. | Attendee answer |
| Question: So if a person decides to buy BITCOIN or LITECOIN through ROBINHOOD, COINBASE, etc., and then transfers to a gaming or an online gambling site.... THAT amount is then reported as a disposition or sale of an asset on 1099B to IRS without the cost so the entire amount of the Bitcoin or Litecoin is a taxable transaction to the IRS. And I kow this to be true because my son does this. When I pulled is Transcripts for tax filing, he had 50 pages of ROBINHOOD 1099B transactions without any cost related. | It is just like the early days of 1099-B (without cost basis) where it is up to the taxpayer to determine basis, which you can still use so it isn't fully taxable if you have basis | Attendee answer |
| Question: 2 people not married live in same home. have 2 kids together. the female makes around $15K a year and the man makes $40K plus on W2's. So the previous accountant files the Female as HOH so she can claim the EIC but not dependent credit the father claims Single and files for the Dependent Credit?? | Without knowing all the details, it's very possible the female would not qualify as HOH under this circumstance and the male should actually be the HOH. Seems like it may have been done incorrectly but hard to say for certain. | UK Instructors |
| Are the home energy credits for home improvements only or are they available for new builds? | The credits discussed in the first part of the chapter (doors, windows, insultation, HVAC, etc.) are existing homes only. The ones in the second half (solar, geothermal, etc.) are available for both new construction and existing homes. | UK Instructors |
| If client just received refund for 2020 this year, filed by third party, no amendment due to statute, should that be reported as taxable income in 2024? | No. | UK Instructors |
| can a traditional IRA be transfered to a regular CD without taxability or 10% penalty ? | It can be transfered to a CD that is an IRA, but it can't be transferred out of the IRA to a taxable CD | UK Instructors |
| If a mother gifts her house to her son and mother retains a life estate in the house, does the house get revalued at the mother's death? Meaninig is it included in her estate for a step up in basis? | Yes. IRC 2036, IRC 2035, IRC 1014 | Attendee answer |
| As a general statement, the answer would be yes as [Attendee] indcates. There would be a step up in basis. However, there could be some limited circumstances depending on the structure of the life estate and remainder interest where it may not be the case that the son gets a step up in basis. The general idea here would be to avoid probate on the house but have the home included in the mother's estate, which would allow the step up. | UK Instructors | |
| The son would get the value of the house at theat time. There might even be gift tax return filing requirements. If the house is just in a trust and left to the son as of the date of the mother's death, the son would get the FMV as of her death for basis. | John Linstead, IRS | |
| Scenerio: An elderly female resides rent free in a home that her male friends owns, When he dies, in his will he grants the female the ability to reside at the home rent free for her lifetime. However, His estate has issued the female a 1099 at FMV for the rent as income to her. Can the the heir's of the Estate or the Estate issue the 1099 as income to the female? | If she has a deeded life estate in this home, I do not see how the estate could validly issue her a 1099. | UK Instructors |
| Is there an advantage in renting to the charity for a week then donating the proceeds? | If the charity pays for the week's rental, and then the owner chooses to write a check to the charity for the same amount as a donation, it seems like this would be a valid charitable contribution. However, I'm not sure that you really gain anything by doing this since in theory the rental income would be taxable and would just be offset by the charitable contribution, putting you in the same place as before. | UK Instructors |
| When filing for the Conservation Easement, I atached the Appraisal from the IRS to the return to Qualify for the Contribution. | That is a good idea and a requirement if over $500K. Thanks for your comment! | UK Instructors |
| Is there a way to have multiple id.me accounts? I have to use id.me for my full-time job which is a governmental job and many federal websites use id.me for verification. I can't access it for my personal usage since it's being used for work related access. Just curious if there is a work around? | There is no work around that I'm aware of. ID.me is for you as an individual to verify you are the legitimate person. It is used by several different government agencies as well as login.gov for some other agencies. You should be able to use your ID.me account for any of your personal business when it is required. Just make sure not to access personal stuff from your work computer :-) I'm surprised your agency requires the use of ID.me. You should be able to use your Smart ID/badge to acces systems required for work. | John Linstead, IRS |
| Why doen't the Federal Government own the site ID.ME? | That's a good question. I have no clue. Several years back, Congress was bad mouuthing ID.me and insisting that all Government agencies use Login.gov but unfortunately that hasn't happened. The old system for identity verification we had before ID.me was even worse. | John Linstead, IRS |
| See KRS 138 for excise info...KRS 138.208 if you want to dive into some weeds | Thanks for this comment! I think it is fun to dig into these things! | UK Instructors |
| For information returns filed through IRIS does client and payee get copies? | Through IRIs, you can print the copies for the payor and payee to be given to them. The system does not send them for you. | John Linstead, IRS |
| BUYER SETUP A ANNUITY $900k IN THE SELLER NAME, AMORTIZED OVER 30 YEARS. HOW TO DETERMINE SP & INTEREST RATE, IE: CAPITAL GAIN? | Interesting scenario. I would not take this as definitive, but my educated guess is that interest would need to be imputed on the contract so that a piece of each annuity payment was considered interest, and the basis would need to be allocated over 30 years to determine what percentage of each payment was profit vs basis. Not ideal to as a seller to have to wait 30 years to receive all of your payments! | UK Instructors |
| How does the receipt of 2020 ERC funds affect the statute of limitations? | Too much to type for this. Reach out to me 513-975-6429 and we'll see if we can arrange a time to talk. It's a mess. | John Linstead, IRS |
| Why is it taking so long to process ERC's for clients? | Too much to type for this. Reach out to me 513-975-6429 and we'll see if we can arrange a time to talk. It's a mess. | John Linstead, IRS |
| Can we turn to the taxpayer advocate on ERC processing when it has taken a year & 8 months? | The last I heard, TAS was not taking any ERC related cases. The best thing to do is to reach out to your local TAS office to see if there are any exceptions. | John Linstead, IRS |
| Is there still a backlog of unresolved cases stemming from Covid times? | To my understanding, we have caught up on the processing of individual returns but I'm not so certain with business returns. I know we are still behind on ERC claims. | John Linstead, IRS |
| What about long overdue refund situations we are not getting resolved? | Reach out to me 513-975-6429 and we'll see if we can arrange a time to talk. I might suggest that you call Parctitioner Priority Service or maybe even go to the Taxpayer Advocate. | John Linstead, IRS |
| What documentation should US businesses have on file when doing business with foreign vendors? Are there different W-8 forms for different vendors? Any “best” AP practices with regard to foreign vendors? | There are 4 different series of W-8 forms. Take a look at each of these to see which one relates to your situation. W-8BEN, W-8ECI (that's an i at the end), W-8EXP or W-8IMY (that's also an i after the 8). | John Linstead, IRS |
| If i am under 55 and wife is 56 how much can we contribute to our HSA? | If you are both covered by a qualifying HDHP, then you could combined contribute up to $9,300 ($4,150 for the spouse under age 55 and $5,150 for the spouse age 56). | UK Instructors |
| does the state gambling withholding requirement include raffles from nonprofits? | I am not sure of every situation that would require withholding. A general rule is if federal withholding is required, Kentucky withholding is also likely required. I would check the regulation though to verify or call our withholding department. | KY Dept of Rev |
| Remind folks to keep their application paperwork wehen revoking an S election. 2 years later the IRS demanded I send that despite the fact that I had a letter acception the revocation. | Attendee comment | |
| Is there a plan in place to create an option to save payment information on file for monthly WRAPS or One Stop sales tax payments similiar to EFTPS for federal 941 payments? | I do not believe we save payment information. We are currently implementing a new system so that could change in the near future. Withholding tax will be in release 1 which will go live March of 2025 and individual income tax will be in release 2 which does not have a go live date yet. | KY Dept of Rev |
| Is there a way or will there be a way to efile the PTET election through KY website? So far our software doesn't offer it. | That is completely up to the software vendor and whether they choose to pick up those forms and allow the ability to electronically file those forms. | KY Dept of Rev |
| what about mfj, what is the magi? | Still $150k. There is no break for MFJ | Eric Shadowens |
| Can the presenter provide any guidance on office in the home deductions? Both from the aspect of someone working from home and businesses providing allowances for remote employee home offices | I'd be happy to discuss if you want to call me. I have some good slides that discuss the home office deduction. | Eric Shadowens |
| Where is the most up-to-date guidance regarding sales tax on services? | KRS 139.200 | Attendee answer |
| i have a client who owns his own law practice. He gets a w-2 from his practice. 75% of all his working hours pertain to real estate closings and activities. Does he meet the first test of the 750 hours of real estate activity? | Fantastic question. I've lost sleep over this for a while because there is not an exact, clear answer. I can give you a court case that comes close to discussing. Also, I believe the attorney would not qualify for REPS since he is doing closing. | Eric Shadowens |
| The math is correct on most returns, unless done by pencil. | Attendee comment | |
| Does the cost segregation study have to be done in year 1? Or can the taxpayer choose to do it in a later year after doing renovations for example? | cost seg does not have to be done in year 1. However, it becomes less of an advantage if you wait. I'd be happy to talk through cost seg if you want to give me a call. | Eric Shadowens |
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what if you have rentails and a another business that get 1099s |
If this question is referring to REPS, you could count the hours if the 1099 business is a real estate activity. If the 1099 business is not a real estate activity, then you would need to meet the more than 50% part of the 1st hurdle of REPS. Remember, the 1st hurdle says that the investor needs to work at least 750 hours in a real estate activity and more than 50% of their time should be spent in a real estate activity. | Eric Shadowens |
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When you have the unallowed losses that weren't carried forward. Assuming all losses were unallowed so the impact on tax would have been $0 each year - do you have to go back and amend every return that missed reporting those on the 8582 to show those as prior unallowed losses? Or can you document and make it correct on the current year return? What if it goes back more than the 3 years we can amend? |
I’ll encourage you to do your own research on whether an amendment is required. However, I’ll tell you how I handled the situation. I had 10 years’ worth of prior year returns. Each return reflected the suspended loss in that particular year. Though the suspended loss hadn’t gotten included in future year returns, I prepared a schedule to easily reconcile the suspended losses to the Form 8582 and then was able to reconcile the ending suspended amount to the amount I updated on the current year Form 8582. I attached a statement to the return with the reconciliation. | Eric Shadowens |
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For real estate professional - how do you determine when it is a rental property jointly owned by husband and wife. Husband can qualify as real estate professional, but husband cannot. Do you split the rental activity 50/50 and report half as REP and have as passive? |
Only one spouse needs to qualify for REPS which means they need to work at least 750 hours and have more than 50% of their time in a real estate activity while materially participating in the real estate activities. That is the first hurdle of REPS. In addition, they need to materially participate in their rental activities. In your question I believe the issue you want to resolve is does the spouse that qualifies for REPS truly materially participate in the rental activity? If so, then the entire losses can offset ordinary income. There wouldn’t be a 50/50 split. | Eric Shadowens |
