Is there anything I am not aware of that provides an exception to "imputed interest" disallowing EIC? I wish there was no such thing as EIC. That being said, since there is EIC, we all have clients we feel actually deserve it more than others.
This client is a full-time farmer and pays income tax and SS every year on his farm profit. This year, due to the drought, he has less income and would qualify for EIC, BUT the "imputed interest" reported on 1099INT for 2007 from the 2005 Tobacco Buyout gives him too much investment income to get the EIC. His "imputed interest" is $1600 and he loses $1700 in EIC. He still owes even with EIC.
I am hoping there is something I don't know that keeps him from being caught in an unfortunate crack.
This client is a full-time farmer and pays income tax and SS every year on his farm profit. This year, due to the drought, he has less income and would qualify for EIC, BUT the "imputed interest" reported on 1099INT for 2007 from the 2005 Tobacco Buyout gives him too much investment income to get the EIC. His "imputed interest" is $1600 and he loses $1700 in EIC. He still owes even with EIC.
I am hoping there is something I don't know that keeps him from being caught in an unfortunate crack.
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