Client received from the IRS a CP2000 for 2014 stating that they owe for Form 8960, Net Investment Income Tax, Line 62b. This client is a doctor, has an S Corporation. They drew a salary that subjected them to the Medicare surcharge. There was a profit of just under $50K. The tax software I use reported the K-1 income on line 4a, and credited it back on line 4b. \
According to the instructions for Form 8960 they can make an adjustment for "net income or loss from a Section 162 trade or business that is not a passive activity and is not engaged in a trade or business of trading financial instruments or commodities."
Has anyone come across this, and what is the resolution? I am getting a POA from the client to call the IRS and speak on their behalf.
Please advise.
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Neil Fishman CPA
FISHMAN ASSOCIATES CPAs PA
Boynton Beach FL
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