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1099 Reporting Requirement

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Any individual to whom you pay $600 or more in a calendar year should receive a 1099.

If you pay MARY JONES INC.... that is not an individual so no 1099.

If you pay MARY JONES, that would require a 1099.

And, only businesses are required to generate the 1099. The home you rent out is considered a business.

If Mary Jones cleaned your personal residence, your home is not a business so no 1099 is required.

NOTE:  IF ANY BUSINES PAYS ANY LAW FIRM (WHETHER INCORPORATED OR NOT) IS REQUIRED TO PREPARE A 1099 IF PAID $600 or more!

1099's are prepared in January for the previous year.

Whether you properly do a 1099 or not, Mary Jones is required to report her income.

The 1099 actually protects you. You don't want IRS thinking you are helping Mary not report her income by not doing a 1099!

Affordable Care Act Penalty Exemptions

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Special hardship exemptions have to be applied for.... and when taxpayer receives an ECN (exemption certificate number) we can input that and the penalty goes away.   Has to be applied for....

Here is the link.

https://www.healthcare.gov/health-coverage-exemptions/hardship-exemptions/

If you have not done so, you should explore this.... some possible exemptions.......

Required care of a loved one disrupts your ability to pay living expenses

Or

Marketplace plans are unaffordable

Or

Experience some hardship in obtaining health insurance.

THERE ARE MORE EXEMPTIONS.  Have a look.

 

Primary Residence Sale after Death

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The rules about investing in a home of greater or equal value within a certain period of time after the sale are long gone (1997).
 
The current rules... if you lived in the home 2 our of the last 5 years from the date of sale, your GAIN can be up to $500,000 (married filing joint) or $250,000 (single)...
 
But what about if a spouse dies at the end of 2014, and the home is sold by the remaining spouse in 2015?
 
There is a special rule that allows the surviving spouse to use the $500,000 exclusion IF THE SALE OCCURS WITHIN 2 YEARS OF THE DATE OF DEATH.
 

Partnership Basis when contributed property is sold

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Example.......
Partner 1 contributed cash
Partner 2 contributed stuff
 
Both count toward their basis in the partnership. The stuff is valued at the Fair Market Value.
 
That being said...
Partner 2 has BASIS in the stuff contributed to the partnership BUT that basis may be less than the Fair Market Value. Nothing taxable yet.
 
Example: You and I are going to sell cars. I contribute my 65 GTO Convertible (I wish). My cost in it years ago is $10k but it is worth $80k.
 
If that stuff is sold within 7 years by the partnership, a calculation is made as if the stuff is sold with the partner's individual basis in the stuff even though the partners agreed the basis contributed was Fair Market Value.
 
SUMMARY
Gain on Contributed stuff sold within 7 years must be calculated at the partner's individual basis even though that basis is not reflected on partnership books.
 
COMMENT
It makes sense. If partner 2 sold the stuff prior to the partnership being in business, he would have a gain. If he puts it in the partnership at FMV, then the partnership immediately sells it, there would be no gain.
 
Lonnie

2012 IRS Forms (the most used) are almost ready for E-Filing!

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WASHINGTON — The Internal Revenue Service announced today that taxpayers will be able to start filing two major tax forms next week covering education credits and depreciation.
 
Starting Sunday, Feb. 10, the IRS will start processing tax returns that contain Form 4562, Depreciation and Amortization. And on Thursday, Feb. 14, the IRS plans to start processing Form 8863, Education Credits.

This step clears the way for almost all taxpayers to start filing their tax returns for 2012. These forms affected the largest groups of taxpayers who weren't able to file following the Jan. 30 opening of the 2013 tax season.