Surprise endings on Sch E's

[Possi]

I have 2 clients back to back whose rental property losses are being carried forward.

One had ALL his losses carried forward because his income is over 150,000. Since it was his primary residence before renting it out, and he is renting where he lives now, he has NO deduction under Sch A and NO deductions allowed this year under Sch E.

This is not a good day for my clients.

It's not a really good day for me, either... =(

Just an observation.

[RitaB]

yeah, it happens

I have a widow just brought her stuff in. Husband did returns. He is gone, and she is helpless with taxes. He had $60,000 on a 1099-R, taxable amount "unknown." I sure hope she can locate last year's return showing how he figured taxable amount.

[Possi]

annuity?

Is it an annuity? He probably used the simplified general rule. Most old people with annuities use that. It is calculated pretty easily with the computer if you know how old he was when he started drawing and how much his contributions were.
I have a widow whose husband died and I was wondering whether or not I should use the SGR on her pension. Since it is in her name as survivor, code 4, I don't think she qualifies to use it.
I am not positive about that.

[David1980]

if you know how old he was when he started drawing and how much his contributions were.

Exactly. If they don't have that information memorized or in a convenient file it can be a pain... Not for the preparer of course, other than having a return you are waiting for information on.

[RitaB]

Yeah, it's an annuity

and I've done several of these over the years, but this widow really is clueless about the taxes, and the husband was a brilliant scientist, so I

a) hope she can find a tax return he did

b) hope he didn't do the math in his head, or on a scrap of paper he threw away

If not, I'll find out when he started drawing and pick the method I would have used if I were a brilliant scientist. Where's that slide rule anyway...

[Burke]

Is it an annuity? He probably used the simplified general rule. Most old people with annuities use that. It is calculated pretty easily with the computer if you know how old he was when he started drawing and how much his contributions were.
I have a widow whose husband died and I was wondering whether or not I should use the SGR on her pension. Since it is in her name as survivor, code 4, I don't think she qualifies to use it. I am not positive about that.

I believe she is required to use it at the same rate as he did. Unrecovered cost can be taken on final return at death.

[Possi]

She doesn't know

She wouldn't know if the unrecaptured was taken at death or not. Nor does she know when he started taking it. I think he has been dead for 4 years, and she has paid tax on the entire amount. I just continued it, with so many unanswer-able questions.