Checks · Okafor-Lindqvist 2025

RSU-BASIS · Investments & digital assets

RSU sales carry the basis already taxed as wages

Fails

The engine used zero basis on noncovered RSU lots, taxing the vest value twice (once in W-2 box 1, again as gain). N1 (RSU-2502): engine basis 0, statement 19,100; N3 (RSU-2505): engine basis 0, statement 19,100; N4 (RSU-2308): engine basis 0, statement 9,420

Engine 53,020 · recomputed 5,400

How: Matched each noncovered Corvane lot on the Northlake 1099-B to the stock-plan supplemental statement (D11) by acquisition date and share count.

Authority: Treas. Reg. 1.6045-1(d)(6)(ii); Form 8949 instructions (code B)

Evidence: D11 · D28 · D08 · Lines: F8949.B.N1, F8949.B.N3, F8949.E.N4

F8949.B.N1 19,240 → 140 — Basis 19,100.00 per supplemental statement RSU-2502 (vest FMV 47.75 x 400 sh, already taxed in W-2 box 1).
Tax: fed −6,647 · CA −1,222

F8949.B.N3 18,480 → -620 — Basis 19,100.00 per supplemental statement RSU-2505 (vest FMV 47.75 x 400 sh, already taxed in W-2 box 1).
Tax: fed −6,647 · CA −1,222

F8949.E.N4 15,300 → 5,880 — Basis 9,420.00 per supplemental statement RSU-2308 (vest FMV 31.40 x 300 sh, already taxed in W-2 box 1).
Tax: fed −2,242 · CA 0

Explain / dismiss instead

LOT-COMPLETENESS · Investments & digital assets

Every printed sale is on Form 8949

Fails

Missing from the return: M18 Ironwood REIT (fractional share cash in lieu) proceeds 250.00 basis 310.00 (D31 p32)

Engine 282 · recomputed 283

How: Parsed every 1099-B detail line from the printed pages of D28, D31 and D74 (283 sales, including unextracted pages) and matched them to the 294 Form 8949 lots.

Evidence: D31 page 32 (not extracted) · D31 · D74 · D28 · Lines: F8949.A.total, F8949.B.total

F8949.B.M18 new line — → -60 — Ironwood REIT (fractional share cash in lieu) sold 2025-12-15 printed on D31 page 32 (page not read by the pipeline).
Tax: fed −21 · CA 0

Explain / dismiss instead

INTEREST-DUPLICATE · Investments & digital assets

Same interest reported on two forms

Fails

SchB.1.1 and SchB.1.2 are both 1,840 from account ending 7731: the Northlake Bank 1099-INT (D29) is the bank-sweep interest already on the Northlake Securities composite (D28).

Engine 3,680 · recomputed 1,840

How: Compared every Schedule B payer line's source documents for a shared account number.

Evidence: D28 · D29 · Lines: SchB.1.1, SchB.1.2

SchB.1.2 1,840 → 0 — Duplicate of the composite 1099-INT (same sweep account).
Tax: fed −640 · CA −127

Explain / dismiss instead

FX-RATE · Foreign accounts

Swedish interest converted at the 2025 rate

Fails

Engine converted at 2024 average (10.56) - last year's rate. 2025 rate gives 1,871.

Engine 1,747 · recomputed 1,871

How: SEK 18,450.00 (D36) / 2025 average 9.86 SEK per USD.

Authority: IRC 989(b)(3); Treas. Reg. 1.989(b)-1 (average rate for the year)

Evidence: D36 · ref:fx.SEK.2025_average · Lines: SchB.1.6

SchB.1.6 1,747 → 1,871 — Convert at the 2025 average rate.
Tax: fed +43 · CA +9

Explain / dismiss instead

SCHC-GROSS · Lindqvist Studio (Schedule C)

Gross receipts reconciled to third-party forms

Fails

The 1099-K 12,400 is already in the books; the engine added it again (gross 163,700 vs 151,300). This is also the answer to the 2028 exam question (1099-NEC 142,000 + 1099-K 12,400 = 154,400 reported vs 151,300 receipts).

Engine 163,700 · recomputed 151,300

How: 1099-NEC total 142,000 + deposits from clients with no 1099 9,300 = 151,300; books total income 151,300. D15: Atlas's 1099-K amount 12,400 was deposited gross and is inside Atlas's 41,200 (also on its 1099-NEC).

Authority: IRC 61; Form 1040 Sch C instructions line 1

Evidence: D14 · D15 · D21 · D17 · D16 · D18 · D19 · D20 · Lines: SchC.1

SchC.1 163,700 → 151,300 — 1099-K receipts already included in books revenue (D15).
Tax: fed −4,402 · CA −384

Explain / dismiss instead

MILEAGE · Lindqvist Studio (Schedule C)

Business miles re-added from the log

Fails

Page 3 is a second scan of page 2 (D23 says so); the engine summed all four page totals. Business miles 8,100 (not 11,800) of 17,740 driven; car expense 8,100 x 0.7 = 5,670.

Engine 11,800 · recomputed 8,100

How: Added every trip in the mileage log and fingerprinted each page's trips to catch rescans. p1: 20 trips = 2,600 (page total 2,600); p2: 22 trips = 3,700 (page total 3,700); p3: 22 trips = 3,700 (page total 3,700); p4: 18 trips = 1,800 (page total 1,800)

Authority: IRC 274(d); Rev. Proc. 2019-46

Evidence: D23 · msg-03 · Lines: SchC.44a, SchC.9, SchC.44c

SchC.44a 11,800 → 8,100 — Remove duplicated page 3.
no tax effect

SchC.9 8,260 → 5,670 — 8,100 business miles x 0.7.
Tax: fed +919 · CA +80

SchC.44c 5,940 → 9,640 — Odometer miles less business miles.
no tax effect

Explain / dismiss instead

MIXED-USE · Lindqvist Studio (Schedule C)

Personal share removed from shared costs

judgmentFails

Utilities 3,480 -> 2,172 (phone 2,160 x 70% + internet 1,320 x 50%); software 6,850 -> 6,634 (less Spotify 216).

Engine 10,330 · recomputed 8,806

How: Call notes (call-01): family phone plan business share 70%, home internet 50%, Spotify Family personal. Books (D14, D15) booked 100%.

Authority: IRC 262; IRC 274(d)

Evidence: call-01 · D14 · D15 · Lines: SchC.25, SchC.27a.1

SchC.25 3,480 → 2,172 — Business-use share per client call.
Tax: fed +464 · CA +41

SchC.27a.1 6,850 → 6,634 — Spotify Family is personal (booked by mistake).
Tax: fed +77 · CA +7

Explain / dismiss instead

SEHI-ELIGIBILITY · Lindqvist Studio (Schedule C)

Self-employed health insurance eligibility

Fails

qa-25: 'Yes - both of Ngozi's employers offer family coverage, but Erik kept his own individual plan because he likes his doctors.' Erik was eligible for subsidized coverage through Ngozi's employers every month, so no deduction is allowed for any month. Engine deducted 14,400. (2024 had none for the same reason.)

Engine 14,400 · recomputed 0

How: Engine rule R-SEHI limits the deduction by income only; it never asks whether Erik could join an employer plan. Questionnaire qa-25 answers that.

Authority: IRC 162(l)(2)(B)

Evidence: qa-25 · D25 · D08 · D09 · py:/return_2024/lines/Sch1.17 · Lines: Sch1.17

Sch1.17 14,400 → 0 — Eligible for an employer-subsidized plan through spouse (IRC 162(l)(2)(B)).
Tax: fed +4,464 · CA +605

Explain / dismiss instead

SEP-LIMIT · Retirement & HSA

SEP deduction limit after Schedule C corrections

Fails

Limit falls from 15,214 to about 13,674. The 18,000 deposited on 04/10/2026 (D26) leaves an excess of about 4,326: advise withdrawal before the due date to avoid the 6% excise (Form 5329).

Engine 15,214 · recomputed 13,674

How: 20% x (net profit - half SE tax). If the Schedule C findings are accepted, net profit is about 73,568, half SE tax about 5,197.

Authority: IRC 404(h), 404(a)(8)(C); IRC 4979

Evidence: D26 · D14 · Lines: Sch1.16

Sch1.16 15,214 → 13,674 — Limit recomputed on corrected net profit.
Tax: fed +477 · CA +65

Explain / dismiss instead

HVAC-CAPITAL · Rentals & the condo sale

HVAC replacement: repair or improvement?

judgmentFails

A replacement of an entire building system is a restoration (betterment) and must be capitalized; the engine expensed 11,000 inside repairs 13,300. Depreciate over 27.5 years from 08/2025. Engine what-if: federal +3,633, California +896.

Engine 13,300 · recomputed 2,300

How: Invoice D47 describes removing the furnace and AC and installing a new heat-pump system with air handler, line set and thermostat (permit). Call notes confirm a whole-system replacement.

Authority: Treas. Reg. 1.263(a)-3(k)(1)(vi), (k)(3)(ii)(B) (HVAC is a building system)

Evidence: D47 · D46 · qa-37 · call-01 · Lines: SchE.14A, SchE.18A

SchE.14A 13,300 → 2,300 — Capitalize the 11,000 heat-pump system (asset SAC-HVAC).
Tax: fed +3,633 · CA +896 engine what-if

SchE.18A 13,891 → 14,041 — Add SAC-HVAC: 11,000 / 27.5 yrs, mid-month August (4.5 months).
no tax effect engine what-if

Explain / dismiss instead

HOME-RE-TAX · Deductions & credits

Home real estate tax: only the owners' share

Fails

The seller's share is the seller's deduction; ours is 6,508. SALT falls to 34,378 - under the 40,000 cap, so the change now reaches taxable income (federal deduction 40,000 -> 34,378; California itemized -6,912).

Engine 13,420 · recomputed 6,508

How: Travis County bill 13,420 (D58) paid in full by escrow; the buyer closing statement (D54) shows the seller credited 6,912.0 for 01/01-07/07.

Authority: IRC 164(d); Treas. Reg. 1.164-6

Evidence: D54 · D57 · D58 · Lines: SchA.5b, SchA.5e

SchA.5b 13,420 → 6,508 — Exclude seller-period taxes credited at closing.
Tax: fed +1,462 · CA +332

Explain / dismiss instead

MORTGAGE-DUPLICATE · Deductions & credits

Mortgage interest counted once

Fails

Payoff interest 2,150 is inside the Lonestar 1098 box 1 13,900 and was added again. Correct 8a: 13,900 + 997 + purchase points 4,800 = 19,697.

Engine 21,847 · recomputed 19,697

How: Read the lender statements: D55 (1098) says box 1 includes interest paid at payoff; D56 (payoff statement) says its interest is reported on the 1098.

Authority: IRC 163(h)

Evidence: D55 · D56 · D57 · D54 · Lines: SchA.8a

SchA.8a 21,847 → 19,697 — Payoff interest already on Form 1098.
Tax: fed +559 · CA +103

Explain / dismiss instead

VEHICLE-GIFT · Deductions & credits

Donated car limited to what the charity got

Fails

Charity sold the Subaru for 2,900; deduction is limited to that, not the client's Kelley Blue Book 6,000 (qa-39, call-01). This is item 1 of the 2028 examination.

Engine 6,000 · recomputed 2,900

How: Form 1098-C (D66) box 4a checked (sold at arm's length), 4c gross proceeds.

Authority: IRC 170(f)(12); Form 1098-C box 4c

Evidence: D66 · qa-39 · call-01 · Lines: F8283.A1.vehicle, SchA.12

F8283.A1.vehicle 6,000 → 2,900 — IRC 170(f)(12)(A)(ii): gross proceeds cap.
Tax: fed +806 · CA +149

Explain / dismiss instead

CARE-PROVIDER · Deductions & credits

Care provider names and TINs as printed

Fails

F2441.1a.name: Bright Oak Preschool -> Bright Oak Kids Club; F2441.1b.tin: 74-3829516 -> 74-3829156. A wrong provider TIN draws an IRS mismatch notice even with zero credit (benefits exclusion relies on it).

How: Compared Form 2441 provider name and TIN with the printed statements (D61, D62), not the extraction.

Authority: IRC 21(e)(9), 129(e)(9)

Evidence: D61 · D62 · ev-1045 · Lines: F2441.1a, F2441.1b

F2441.1a.name Bright Oak Preschool → Bright Oak Kids Club — Provider's legal name as printed on D61.
no tax effect

F2441.1b.tin 74-3829516 → 74-3829156 — Statement D62 prints 74-3829156; pipeline read 74-3829516 (97%).
no tax effect

Explain / dismiss instead

DEPENDENT-TIN · Household & identity

Dependents' SSNs agree to prior return / cards

Fails

Organizer shows •••-••-3309; 2024 return as filed (D06) shows •••-••-3390. Confirm with the Social Security card before filing. This is exactly what the e-file rejection R0000-504-02 will say on 2026-07-13 if not fixed.

How: Compared every SSN the client typed into the organizer with the 2024 return as filed and any Social Security card in file.

Authority: IRC 24(h)(7); Pub. 1345 (e-file name control)

Evidence: D06 · household:theo · D71 · Lines: F8812.4

household:theo.ssn •••-••-3309 → •••-••-3390 — Organizer shows •••-••-3309; 2024 return as filed (D06) shows •••-••-3390. Confirm with the Social Security card before filing.
no tax effect

Explain / dismiss instead

FED-ESTIMATES · Payments & penalties

Federal estimates agree to the IRS transcript

Fails

IRS shows 2025-04-15 3,000, 2025-06-16 3,000, 2025-09-15 3,000, 2026-01-15 3,000 = 12,000. The engine used the client's memory for Q4 ('4,000 I think', qa-41) because no confirmation was uploaded.

Engine 13,000 · recomputed 12,000

How: IRS account transcript as of 2026-03-12 (code 670); EFTPS confirmations D67 (3 payments).

Evidence: D69 · D67 · qa-41 · agency:/irs_account_transcript_2025/0 · Lines: F1040.26

F1040.26 13,000 → 12,000 — Agree to IRS transcript (Q4 was 3,000 on 2026-01-15).
Payments: fed −1,000 · CA 0

Explain / dismiss instead

CA-ESTIMATES · Payments & penalties

California estimates agree to the FTB account

judgmentFails

FTB applied 10,500 to 2025. The 3,500 paid 2025-09-15 was designated tax year 2024 (D68, and the FTB holds it as a 2024 credit); the engine counted every payment by date. Ask the FTB to transfer the credit - or claim it on 2024 - but it is not a 2025 payment today.

Engine 14,000 · recomputed 10,500

How: FTB account as of 2026-03-12: payments applied to tax year 2025; Web Pay confirmations D68 show the tax year chosen on each payment.

Evidence: D68 · agency:/ftb_account · Lines: F540NR.72

F540NR.72 14,000 → 10,500 — Agree to FTB account (09/15 payment designated 2024).
Payments: fed 0 · CA −3,500

Explain / dismiss instead

CA-WAGE-SOURCE · California part-year (540NR)

California wages limited to the resident period

Fails

Engine took W-2 box 16 at face value (107,100 + 111,300 = 218,400). California may tax 129,569. California withholding stays creditable in full.

Engine 218,400 · recomputed 129,569

How: Residency ended 2025-07-14 (household). Corvane: all wages earned in California (box 16 107,100). Halvorsen: paystub D73 shows CA taxable wages 22,469 through 07/15; payroll kept California as the work state until 09/30 by mistake (D09 note, qa-45).

Authority: Cal. Rev. & Tax. Code 17041(b), 17951; FTB Pub. 1031

Evidence: D09 · D73 · D08 · qa-45 · qa-03 · Lines: SchCA540NR.1.E

SchCA540NR.1.E 218,400 → 129,569 — Halvorsen wages after 07/14 are Texas-source.
Tax: fed 0 · CA −5,685

Explain / dismiss instead

FOREIGN-FILINGS · Foreign accounts

Filings outside this return identified

judgmentoutside filingNeeds judgment

Max value 149,567 USD: FBAR (FinCEN 114) required - outside our engagement (D01), client said they filed 2024 themselves. The account came from an inheritance from Birgitta Lindqvist in 2023 (D36); the prior preparer's open item 'Form 3520 for 2023 - no note of resolution' (D07) is still open: a late 3520 carries a penalty of up to 25% of the gift.

How: Max balance at the Treasury year-end rate; account history on the statement; prior preparer's open items.

Authority: 31 CFR 1010.350; IRC 6039F, 6677

Evidence: D36 · D07 · D01 · qa-07 · qa-08 · Lines: F8938.1.max, SchB.7a

Explain / dismiss instead

CONTRACTOR-1099 · Lindqvist Studio (Schedule C)

Information returns the business owes

judgmentoutside filingNeeds judgment

Mara Quintero 4,800 and Dev Patel 2,600 were paid by ACH (not card) - Forms 1099-NEC were due 2026-02-02 and were not filed. Outside our engagement (D01): advise client in writing; Sch C line J answered 'No'.

How: Contractor report D27 and questionnaire qa-22/qa-23.

Authority: IRC 6041A, 6721/6722

Evidence: D27 · qa-22 · qa-23 · call-01 · D01 · Lines: SchC.I, SchC.J

Explain / dismiss instead

DUE-DILIGENCE · Household & identity

Form 8867 due diligence for CTC / ODC

judgmentNeeds judgment

Paid-preparer due diligence must be documented: residency (12 months each), relationship, age (Theo 8, Ada 19 full-time student - D59/D60), Ada files her own return claiming 'can be claimed'.

How: Credits claimed: child tax credit (Theo) and credit for other dependents (Ada).

Authority: IRC 6695(g); Treas. Reg. 1.6695-2

Evidence: household:theo · household:ada · D59 · D60 · D06 · Lines: F8867.status

Explain / dismiss instead

CA-AMT · California part-year (540NR)

California AMT on the ISO exercise

judgmentNeeds judgment

ISO granted 03/2022 and exercised 07/30/2025 (after the move) for a 40,000 bargain element; California sources ISO income by days worked in California between grant and exercise (all of Corvane's service). A Schedule P computation is needed before filing.

How: Engine does not compute Schedule P (540NR).

Authority: Cal. Rev. & Tax. Code 17062; FTB Pub. 1004

Evidence: D12 · qa-06 · Lines: F540NR.61

Explain / dismiss instead

CLIENT-ANSWERS · Household & identity

Client answers that the documents contradict

Info

qa-14 'no investments sold' vs 282 brokerage sales; qa-15 'didn't really sell' vs 12 Coinhaven dispositions (D34); qa-31 'no prior IRA basis' vs 2024 Form 8606 basis 7,000; qa-41 Q4 '4,000 I think' vs IRS 3,000. Documents govern; discuss with the client so next year's organizer is right.

How: Compared questionnaire answers with what the documents show.

Evidence: qa-14 · qa-15 · qa-31 · qa-41

W2-DISTINCT · Wages & stock compensation

Each W-2 counted once

Agrees

2 distinct W-2s; D09, D10 are one form. Box 1 total 212,400 agrees with line 1a.

Engine 212,400 · recomputed 212,400

How: Grouped every W-2 image by employer EIN + boxes 1 and 2; summed box 1 of distinct forms.

Evidence: D08 · D09 · D10 · Lines: F1040.1a

W2-WITHHOLDING · Payments & penalties

Federal withholding agrees to W-2 box 2

Agrees

Box 2 total 25,400.

Engine 25,400 · recomputed 25,400

How: Sum of box 2 on distinct W-2s.

Evidence: D08 · D09 · Lines: F1040.25a

EXCESS-SS · Wages & stock compensation

Excess social security recomputed

Agrees

Excess 3,342.

Engine 3,342 · recomputed 3,342

How: Box 4 total 14,260.00 less 6.2% x wage base 176,100 = 10,918.20.

Evidence: D08 · D09 · Lines: Sch3.11

ISO-AMT · Wages & stock compensation

ISO bargain element recomputed from Form 3921

Agrees

AMT preference 40,000.

Engine 40,000 · recomputed 40,000

How: (52.00 FMV - 12.00 exercise) x 1,000 shares; client confirms shares still held (qa-06).

Evidence: D12 · qa-06 · Lines: F6251.2i

ESPP · Wages & stock compensation

ESPP disqualifying disposition

Agrees

Ordinary income 675.00 = W-2 box 14 ESPP (already in box 1); basis 4,500.00 = supplemental statement (D11) and lot N2 adjustment code B.

Engine 675 · recomputed 675

How: Form 3922 (D13): (30.00 FMV at purchase - 25.50 paid) x 150 sh; sold 03/10/2025, within two years of the offering date - disqualifying.

Authority: IRC 421(b), 423; Treas. Reg. 1.423-2(k)

Evidence: D13 · D11 · D08 · D28 · Lines: F8949.A.N2

BROKER-TOTALS · Investments & digital assets

Broker summaries foot to their detail

Agrees

Meridian (D31): summary 71,965.00 vs detail 71,965.00 incl. page 32; Brightpath short-term: summary 139,615.96 vs 110 lots 139,615.96; Brightpath long-term: summary 195,112.56 vs 150 lots 195,112.56. The engine's 250.00 mismatch (diagnostic) is the unread page 32 lot M18.

How: Summed printed 1099-B detail lines per broker and compared with the printed summary.

Evidence: D31 · D74 · Lines: F8949.A.total, F8949.D.total

HOLDING-PERIOD · Investments & digital assets

Short/long-term classification recomputed

Agrees

All 294 lots classified correctly.

How: Recomputed holding period (more than one year) for every lot from its dates.

Evidence: D28 · D31 · D74 · D35

WASH-SALES · Investments & digital assets

Wash-sale adjustments carried to Form 8949

Agrees

28 lots with wash sales; all carried (code W).

How: Compared every printed wash-sale disallowance with the 8949 adjustment column.

Evidence: D31 · D74

EQUIPMENT · Lindqvist Studio (Schedule C)

Equipment cost and method

judgmentAgrees

Invoice 38,000 = federal depreciation 38,000. Election alternatives (section 179 / MACRS) are in what-ifs: section 179 saves California 1,050.

Engine 38,000 · recomputed 38,000

How: Invoice D22 total; placed in service 03/21/2025 (after 2025-01-19, so 100% special depreciation is the default); books' own 7,600 straight-line replaced.

Evidence: D22 · D14 · qa-18 · call-01 · Lines: F4562-C.14, SchC.13

HOME-OFFICE · Lindqvist Studio (Schedule C)

Home office area by month

Agrees

Average 240 sq ft x $5 = 1,200. Prior preparer claimed 300 sq ft in 2024 for the same 220 sq ft room ('2 rooms combined?') - 2024 was overstated by about 400 of deduction (immaterial; noted for the client).

Engine 1,200 · recomputed 1,200

How: D24: 220 sq ft Jan - mid-July (Sacramento), 260 sq ft from 07/16 (Austin). Months with 15+ days: 6 at 220, 6 at 260.

Evidence: D24 · D07 · py:/return_2024/lines/SchC.30 · Lines: SchC.30

DEPRECIATION · Rentals & the condo sale

2025 depreciation recomputed per asset

Agrees

Every asset agrees (SAC-BLDG 13,236.36, SAC-ROOF 654.55, AUS-BLDG 7,139.39, AUS-FLOOR 190.00).

How: Straight-line / mid-month for each building asset; disposal month counts half.

Evidence: D07 · D51 · Lines: F4562-E.total-A, F4562-E.total-B

CONDO-SALE · Rentals & the condo sale

Condo sale gain recomputed from the closing statement

Agrees

Gain 105,040; unrecaptured 1250 50,340. 1099-S (D52) proceeds agree.

Engine 105,040 · recomputed 105,040

How: Price 395,000 - (cost 310,000 + flooring 6,600 + selling costs 23,700 - depreciation 50,339.99).

Evidence: D51 · D52 · D07 · Lines: F4797.25, SchD.19

PASSIVE-CARRY · Rentals & the condo sale

Suspended passive losses agree to 2024

Agrees

Fremont 6,300, Barton Hills 9,850; all released in 2025 (net passive income, condo fully disposed).

Engine 16,150 · recomputed 16,150

How: 2024 Form 8582 unallowed losses (D06 p9) vs carryovers used in 2025.

Evidence: D06 · D07 · Lines: F8582.1c

SCORP-BASIS · K-1s & basis

Woodworks stock basis rolled forward independently

judgmentAgrees

Beginning 2025 basis 2,300; distributions exceed basis by 21,215 (long-term gain). Still resting on a 2022 client worksheet nobody has seen - obtain 2019-2022 K-1s or the corporation's basis schedule. Distributions include Oregon composite tax 1,580 paid April 2026.

Engine 2,300 · recomputed 2,300

How: 2022 ending 21,300 (client worksheet) + 2023 K-1 (D40) 14,100 - 20,000 = 15,400; 2024 +16,900 - 30,000 = 2,300; 2025 + 18,485 - 42,000.

Authority: IRC 1366, 1367, 1368(b)

Evidence: D39 · D40 · D07 · msg-06 · Lines: F7203.1, F7203.excess, F8949.F.SCORP

K1-RECEIVED · K-1s & basis

Every expected K-1 received and mapped

Agrees

Woodworks box 1 18,400 -> SchE.28A; Ridgeline box 2 8,400 -> SchE.28B, box 5 120 -> SchB, box 9a 1,350 -> SchD.12, box 21 foreign tax 210 -> Sch3.1. Ridgeline arrived 2026-06-22 (extension).

How: 2024 return reported two K-1s; matched each 2025 K-1 box to a return line.

Evidence: D37 · D38 · D39 · py:/return_2024/K1_1065 · Lines: SchE.28A, SchE.28B, SchD.12

IRA-BASIS · Retirement & HSA

Backdoor Roth basis agrees to 2024 Form 8606

Agrees

Basis 7,000 (2024 contribution made 02/12/2025) + 7,000 for 2025 = 14,000; converted 14,026; taxable 26. The client's answer (qa-31: 'prior basis: none that I know of') is wrong - the documents win.

Engine 7,000 · recomputed 7,000

How: 2024 Form 8606 line 14 (D06 p10) and 2024 Form 5498 (D42); 2025 Form 5498 (D43) and 1099-R (D41).

Evidence: D41 · D42 · D43 · qa-31 · D06 · Lines: F8606.2, F8606.18

STOCK-GIFT · Deductions & credits

Gift of stock: holding period and limit

Agrees

Held over a year - fair market value 14,500 allowed; well under 30% of AGI. Publicly traded: no qualified appraisal needed.

Engine 14,500 · recomputed 14,500

How: Acknowledgment D65: acquired 04/2019, basis 9,300, value 14,500 (high/low average); AGI 30% limit.

Authority: IRC 170(b)(1)(C), 170(e)(1)

Evidence: D65 · Lines: F8283.A1.stock

EXTENSION-PAYMENT · Payments & penalties

Extension payment agrees to the IRS transcript

Agrees

36,000 on 2026-04-14 = Schedule 3 line 10.

Engine 36,000 · recomputed 36,000

How: Transcript as of 2026-08-03: code 670 'Payment with extension (Form 4868)'.

Evidence: agency:/irs_account_transcript_2025/1 · timeline:extension-2026-04-14 · Lines: Sch3.10

CAPLOSS-CARRY · Tax computation

Capital loss carryovers recomputed from 2024

Agrees

Short 3,200, long 11,000 - agree to the prior preparer's worksheet (D07 p6) and SchD.6/14.

Engine (3200, 11000) · recomputed (3200, 11000)

How: 2024 short-term -6,200, long-term -11,000, allowed 3,000 (short-term first).

Evidence: D06 · D07 · Lines: SchD.6, SchD.14

FOOTING · Tax computation

Return foots and cross-foots

Agrees

Every total re-adds.

How: Re-added the main lines of Form 1040, Schedule C and Form 540NR from their inputs.

Evidence: · Lines: F1040.9, F1040.11, F1040.15, F1040.24, F1040.33, F1040.37

warning	DIGITAL_ASSET_BASIS_MISSING Coinhaven lot C6 has no cost basis (transfer in from external wallet). Engine used zero basis and the transfer-in date. ev-0879 ev-0881 ev-0882 ev-0918 ev-0919 · covered by check CRYPTO-BASIS
info	AMT_CREDIT_CARRYFORWARD AMT arises from the incentive stock option exercise (a deferral item); a minimum tax credit carryforward to 2026 is expected (Form 8801 next year). F6251.11
info	AOTC_PHASED_OUT American opportunity credit fully phased out by modified AGI. F8863.7
info	FBAR_OUTSIDE_RETURN Foreign account maximum exceeds 10,000 USD: FinCEN Form 114 (FBAR) is due separately (not part of this return; not in engagement scope). F8938.1.max · covered by check FOREIGN-FILINGS
warning	FORM_1099_FILING Schedule C: client paid two contractors 600 or more and has not filed Forms 1099-NEC. SchC.I SchC.J · covered by check CONTRACTOR-1099
warning	DUE_DILIGENCE_REQUIRED Form 8867 must be completed by the preparer for the child tax credit and credit for other dependents. F8867.status · covered by check DUE-DILIGENCE
warning	CA_AMT_NOT_COMPUTED California AMT (Schedule P 540NR) not computed: review incentive stock option exercise for California-source allocation. F6251.2i · covered by check CA-AMT
info	HOME_OFFICE_AREA_CHANGE Home office area (average 240 sq ft) differs from 2024 (300 sq ft). SchC.30 · covered by check HOME-OFFICE covered Covered by check HOME-OFFICE (pass) — workpaper
warning	QUESTIONNAIRE_SALES_CONFLICT Questionnaire answer: no investments sold. Documents show 282 brokerage sales and 12 digital asset dispositions. qa-14 · covered by check CLIENT-ANSWERS covered Covered by check CLIENT-ANSWERS (info) — workpaper
warning	LOW_CONFIDENCE_READ Handwritten receipt amount read with low confidence (0.41). ev-1049 · covered by check CHARITY-READ
warning	BROKER_SUMMARY_DETAIL_MISMATCH Meridian 1099-B summary proceeds 71,965.00 differ from the sum of extracted lots 71,715.00. ev-0703 · covered by check LOT-COMPLETENESS

Checks that don't trust the engine

Open — fails (18)

Open — needs judgment (4)

Information (1)

Agrees with the engine (20)

Engine diagnostics (v3)