If previous preparer did not reduce taxable income for basis (over about 7 years), is this lost? Or can I just claim remaining basis until used up? How about if I cannot find out how much was claimed? Do the calculations, assume correct basis was claimed all the years and use the remainder?
-
-
P management?
1. Query appears to be something related to pension form Postal Service or some other US Government source. (Personnel Management?)
2. When this comes up, and assuming the simplified rules or whatever don't apply, I have filed amended returns (had 3 like this last tax season) attaching the 1099-R form showing the employee contributions. In each case, the taxpayers receive an additional refund, plus some interest, within 8-12 weeks from IRS. (In this state, sometimes all or a portion of the original amounts were subject to tax so there were amended returns with those also.)
3. Need to make sure, if the taxpayer is old enough, that when the pension started the TP's 'basis' was not used up with an old "3 year tax free recovery of contributions" rule that applied a long time ago to public pensions.
4. See TTB p. 3-3, line 16 comments, and Page 13-20 and other references cited therein.
5. Similar rules likely apply to private employer pensions as well.Friends double; family triple. Don't buy an audit for yourself. If someone has to go to jail make sure it is the client. Remember it is only taxes, nothing important. -
Opr
Sorry for the confusion. This post is not about the general rules - taxpayer has to use simplified rule. It appears the previous tax return preparer missed the tax free portion at least for last year maybe for eight years. Last three years are open to file amended returns but what about the older years? 2014 will be the last year to claim tax free benefits under normal circumstances but if we can add on the missed years it will be longer.
I know that one cannot pick and choose to claim or not to claim (at least I think I know) but what about these circumstances. My research has not brought up anything.Comment
-
1 3 year period of amendments. As I may have noted, we did 5 TP's amendments on this issue alone last year.Originally posted by Gretel View Post
2. The earlier years are lost in most cases at the Federal level.
3. However, iIn this state, we were able to use the "pension basis reduction" for a state tax credit increase; 'our' state has a 4 year S.O.L.
4. So, if you can get started now, you can amend for the TP the 2011, 2012, and 2013 returns, correctly compute the 2014 return and thus in effect give the TP 4 years of higher refunds or lower taxes.
5. What is done is done, eh? Can't do much about what someone else may have missed.Friends double; family triple. Don't buy an audit for yourself. If someone has to go to jail make sure it is the client. Remember it is only taxes, nothing important.Comment
-
Thanks, Mastertaxguy. Our SOL is actually 5 years, at least the money is to be gotten, even though not worthwhile paying me the fee. Maybe client will decide to go back to our preparer who ist just across the street.
What makes you so sure that no catch up is allowed? Maybe because the client is responsible for correct reporting not matter what?Comment
-
I do not believe that there is anything in the Code which allows "catch up," although you can amend those returns still open during the statutory period. It just means you will track his basis for a longer period of time that would otherwise have been necessary in order to exclude all of his contributions. If not all excluded at TP's death, it is taken on his final return. If it is a joint & survivor annuity, and it continues to be paid to the spouse, then you keep excluding the same amount for the period of time it continues to be paid until all has been taken, and any unexcluded contributions remaining at the spouse's death would be taken on that final return.Comment
Comment