Zbucklyo
Level 7
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Activity Feed for Zbucklyo
- Cheered Re: Can I defer capital gains on a vacation rental I sold on 12/20 to another vacation rental I bought in 4/20 using like kind exchange? for tagteam. 3 weeks ago
- Cheered Re: QBI Calculation of 1/2 Self-Employment Tax Deduction (possible incorrect calculation) for DavidS127. July 16, 2020 12:28 PM
- Posted QBI Calculation of 1/2 Self-Employment Tax Deduction (possible incorrect calculation) on Business & farm. July 13, 2020 6:48 AM
- Got Cheered for If your daughter was 17 at the end of 2016, you are not e.... May 30, 2020 4:30 PM
- Got Cheered for It depends. If the interest is from a multi-state bond f.... May 3, 2020 6:52 AM
- Got Cheered for Employers are required to withhold an additional 0.9% of.... February 13, 2020 11:36 AM
- Got Cheered for You are correct. Turbotax does not support Form 3805V..... February 6, 2020 10:20 AM
- Posted The change in tax liability sounds too high for just bein... on Deductions & credits. June 12, 2019 1:24 PM
- Posted You would potentially owe depreciation recapture tax on t... on Deductions & credits. June 12, 2019 1:24 PM
- Posted Investment income for the purposes of the EITC are the to... on Investors & landlords. June 11, 2019 9:30 AM
- Posted It shouldn't have been combined if you filled out your ta... on Investors & landlords. June 11, 2019 9:30 AM
- Posted Does Schedule E Line 26 = 201K or -201K?. Does Schedule... on Investors & landlords. June 7, 2019 5:49 PM
- Posted All your suspended passive losses are released upon sale... on Investors & landlords. June 7, 2019 5:49 PM
- Posted So do I, @Critter#2. And you are one of them. on After you file. June 7, 2019 5:46 PM
- Posted You do not need to. on Get your taxes done using TurboTax. June 7, 2019 4:48 PM
- Posted No, passive losses can only be used to offset passive inc... on Investors & landlords. June 7, 2019 4:17 PM
- Posted A 501c3 is a non-profit organization, and is not a busine... on After you file. June 7, 2019 3:49 PM
- Posted No the gift can't be left unreported by the giver, becaus... on Get your taxes done using TurboTax. June 7, 2019 3:46 PM
- Posted Probably not. You would only be required to file a tax r... on Retirement tax questions. June 7, 2019 3:38 PM
- Posted You can fill out your W-4 anyway you like. However, if i... on Get your taxes done using TurboTax. June 7, 2019 3:13 PM
July 13, 2020
6:48 AM
Tax Situation Description: My wife (essentially retired) still has a small Schedule C business with net profit of about 2.5K. She pays self-employment tax of about $350. We do not pay regular income tax on this income, as she takes a self-employed health insurance deduction which effectively wipes out the regular income tax liability associated with the business. As a result, she does not qualify for a QBI deduction on her business. This appears to be correct. However, we are also invested in a number of private limited partnerships, some of which have a profit for QBI purposes, and some which have a loss. As an example, one of the partnerships has income of $8,500, all QBI eligible, with no associated self-employment income. However, the software is deducting 1/2 self-employment tax of $175 (the amount associated with the unrelated Schedule C business) from the QBI eligible income from this partnership. It is also doing this with two of the other limited partnerships that show a net profit, for a total deduction of $525 (roughly). This appears to be an error, and I don't see a way to change this through the interview process. It can be changed (not overriden, but changed by user input) in Forms mode. Details: The calculation is shown in Section D2 of the K-1 worksheet, line 5 for self-employment deductions connected to this business. Line 5a, self employed earnings from QBI are zero, which is correct. Line 5c, Total Deduction for 1/2 Self-Employment Tax shows $175, which is correct. However, Line 5d Deduction for 1/2 Self-Employment Tax Connected to this business shows $175, clearly incorrect. It is possible to change this number (it is a user-input field), but again, there appears to be no way to change this through the interview process. This deduction then carries over to reduce the QBI component for the business. Unfortunately, I had already e-filed before finding this issue. (By the way, I went back to 2018 and found the same issue).
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June 12, 2019
1:24 PM
The change in tax liability sounds too high for just being depreciation recapture on a 75k house.
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June 12, 2019
1:24 PM
You would potentially owe depreciation recapture tax on the sale.
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June 11, 2019
9:30 AM
Investment income for the purposes of the EITC are the total of lines 8a (tax-exempt interest), 8b (taxable interest), 9a (ordinary dividends), and line 13 (capital gains). Rental income or loss does not figure into the investment income calculation.
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June 11, 2019
9:30 AM
It shouldn't have been combined if you filled out your tax return correctly. The passive income from the rental should have been shown on Line 17 of Form 1040, capital gains are shown on line 13 of Form 1040.
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June 7, 2019
5:49 PM
Does Schedule E Line 26 = 201K or -201K?. Does Schedule 1 Line 17 equal -210K or 210K. If it is negative, then it appears all the passive losses have been released upon the sale of Rental 3, and there will be no more passive loss carryovers. Check Form 8582, Worksheet 5 for any unallowed losses. These are the losses that would be carried over to 2019.
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June 7, 2019
5:49 PM
All your suspended passive losses are released upon sale of the rental, not just those for the property you sold, assuming you have sufficient gain from the sale. And since passive losses are ordinary income equivalents (they would have been treated as a reduction in ordinary income if they hadn't been suspended), they are treated as a reduction in ordinary income when released. They are not treated as a cost basis adjustment.
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June 7, 2019
4:17 PM
No, passive losses can only be used to offset passive income. Capital gains are not considered passive income.
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