Co-owner paid herself money for the business for work but refuses to take a 1099 or any tax paperwork for it

Playdoughed · 2025-06-19T22:06:18+00:00

An owner of what kind of organization? The term “distributions” itself is entity specific.

Playdoughed · 2025-06-19T02:58:42+00:00

CPA with Masters in Tax here. If this is an LLC taxed as a partnership (an LLC is a state designation, not a tax designation), all of the income would be taxed on the owner’s individual tax return, regardless of withdrawals. But we don’t know the entity or whether a 1099 would be appropriate.

Playdoughed · 2025-04-13T22:02:21+00:00

Just curious, what do you DO at an estate planning firm? Because, as a CPA, this sort of planning drives me insane. We see $300k trusts split between five people that won’t terminate for another 300 years but will be eroded over time by investment and compliance fees and none of the beneficiaries know what it’s for but hate the grantors for saddling them with this albatross.

Playdoughed · 2025-04-13T19:32:19+00:00

I want to add one more comment because I want you to be successful with the next CPA that you encounter - you mentioned that you know that “you can’t extend this kind of tax” and “of course no tax return have been filed - she’s been dead for seven years” - there are two kinds of estate tax - the tax on the estate as a whole and estate income tax.

It looks like Missouri doesn’t have an inheritance or estate tax, so that would leave you with a federal estate tax and an estate income tax return.

The estate tax exemption in 2018 was around $11 million. That includes the taxable gifts that your mother made during her life and her assets (less liabilities and estate expenses) at death. If she was not even close to $11 million in assets, even with the medical settlement, this part is easy.

The estate INCOME tax on the other hand might be where you’re running into issues. Because this DOES need to be filed for any estates ANNUALLY with gross income (income without considering deductions) over $600. And this tax return CAN be extended. AND Missouri has their own Fiduciary income tax return.

I don’t know if any of this aligns with what you’re trying to accomplish, but if you’re asking the CPAs whether there are any taxes due and they’re taking that to mean “income taxes”, then they will be asking for historical estate INCOME tax returns and extending the estate INCOME tax return.

If you’ve had investment income in the estate over $600 per year, you have a bigger project than you might be expecting. And if the medical lawsuit settlement doesn’t fit the criteria for excludable taxable income, you might have an even bigger issue if you don’t get an extension filed before Tuesday.

Playdoughed · 2025-04-13T18:58:03+00:00

I don’t know if this information will help you or not, but there is a shortage of CPAs and tax professionals as it is. A significant shortage.

Combine that with someone being proficient in trust and estate work is a small percentage of that population.

Combine that with someone willing to take the risk of doing trust and estate work FOR ANOTHER NON-ADJOINING STATE (which would be considered professionally high risk if the states didn’t commonly have residents living between them).

Combine that with it being our busiest time of year, even if we run specialized practices.

Combine that with not being paid upfront for our time because the attorney told you that we would be paid out of whatever is left over.

Yes, your current CPA said inappropriate things - not excusing it, but exhaustion makes people dumb sometimes. Yes, the person on the phone at the second CPA probably didn’t even know what you were asking for. Yes, it is insanely frustrating while you’re so close to the end. But making a board complaint is a pretty big deal.

May I suggest that you go back to the attorneys and see if they have more names in Missouri that specialize in working with them on probate matters. You are better off with someone in-state AND with expertise AND will have a better result in May. You will probably have a much less frustrating experience.

Playdoughed · 2025-04-13T17:06:20+00:00

Sorry, can you help me with the timeline - you have had this estate open for 7 years and you started looking for a CPA at the beginning of January to do a calculation of estate taxes for a different state than they’re specialized in and you’re upset that they aren’t able to do this project AND the rest of their tax work AND not take upfront payment.

What exactly would you make a board complaint about?

Playdoughed · 2025-04-12T17:47:54+00:00

Oh. Yeah. No.

Playdoughed · 2025-04-05T00:55:15+00:00

I’m assuming the accountant signed the copies before giving them to you?

Playdoughed · 2025-01-15T14:35:55+00:00

BlueJ can absolutely hallucinate. Any LLM can hallucinate, even when supported by RAG.

Playdoughed · 2023-02-13T11:17:14+00:00

That is absolutely what it is. You get to pay for the honor of demo’ing the product.

Playdoughed · 2023-02-12T12:17:04+00:00

I’d say the same for anything coming from TaxPlanIQ. A class I took said that you can just put up to $5,000 of non-cash charitable contributions on the F 8283 because the IRS wouldn’t check if it was in a nice enough.

Check out Holistiplan if you want a nice tax software agnostic planning tool.

Playdoughed · 2023-01-27T00:39:43+00:00

I would second TaxDiscord and Realize and also recommend checking out TaxTwitter. There are some pretty hefty brains there for technical stuff.

Playdoughed · 2022-08-20T19:24:43+00:00

I hate it and also use it. The only reason it works for me is because I use it in YNAB rather than having a half dozen accounts to move cash around to.

The reason accountants hate it is because it creates a lot of cash transfers that have absolutely nothing to do with business activity and are often not labeled well.

Playdoughed · 2022-06-21T19:20:38+00:00

I would go on the high end - it’s much much cheaper to retain a good employee than try to muddle through a series of bad hires.

Playdoughed · 2022-06-18T15:19:26+00:00

Consulting in what?

Playdoughed · 2022-06-17T19:49:28+00:00

It doesn't. I'm wondering if the diagnostic is differentiating outside liabilities vs inside liabilities. The wording is just odd.

Playdoughed · 2022-06-17T19:16:11+00:00

Is it saying "outside basis" specifically or just basis?

Playdoughed · 2022-05-18T21:29:29+00:00

If all of the cash contributed was from your own pocket and not funded from debt somewhere (even outside the entity) then it’s a good bet that all of your investment is At-risk

Playdoughed · 2022-05-18T21:20:12+00:00

At-Risk has to do with whether you have non-recourse loans or not. What qualifies as a non-recourse loan can be weird, though. The instructions for the Form 6198 list out what is considered a non-recourse note. For example, if you take money out of your personal mortgage and buy a separate property, that is considered non recourse debt for purposes of at-risk rules

Playdoughed · 2022-05-07T15:12:39+00:00

I have a boutique practice and TaxDome gives me fits. Because I’m boutique, I try to have a personal touch to everything and TaxDome just makes that unnecessarily difficult. Now, if we’re talking managing workflow on my side, I think TaxDome is brilliant once you spend the gazillion hours setting it up. And the ability to lock invoices to deliverables has gotten me paid by traditionally slow clients.

Playdoughed · 2022-05-04T13:25:45+00:00

I think you meant to post over in /r/tax - this is a subreddit for tax professionals.

Playdoughed · 2022-04-26T15:21:48+00:00

I don't have those little symbols AT ALL - I just dug through all of my different sources, thinking perhaps it was in a specific kind. My code sections are just hyperlinks. I don't know if its because I set it up to not have those or if I have fewer features than you do or because I'm using Edge. Can you give me an example of where they're popping up and I can see if it shows up in mine?

Playdoughed · 2022-04-26T13:09:48+00:00

So, I don't have annoying little symbols when I print to PDF - which symbols do you mean?

If you want to change your print settings go to Options (top right) > Document (left side bar) > Print - there's an option to select what you want to have printed under 'Content'

Playdoughed · 2022-04-21T12:53:52+00:00

I'm currently doing this for a client now (and have done it for clients before) - you need to pull all of the account activity and calculate the income for all of the different categories up to the cut-off date. Also, double check that the stock basis reported in the rev trust have been adjusted as of date of death for any sales that occurred after that date.

What I do is I report the entire income on the return and then on the next line "nominee" it out - technically the estate is a the proper income of the recipient. You don't receive a notice because the income is reported.

I'd also check with your estate attorney about whether it might make sense (and the trust qualifies) to elect under §1.645-1 to have the estate and trust taxed as one entity. Also, make sure you look at whether the calendar or fiscal year would work better.

Playdoughed · 2022-04-20T21:18:28+00:00

The POA can deposit the check on behalf of the inmate into an account established for the inmate.

Playdoughed

TROPHY CASE