Hahn1040

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  1. Those were my exact sentiments for this client I am working on! The SSA and the OPM 1099Rs.... at least with the 1099s, there are several copies ... so when they have ripped off half of the figures , at least there are other copies that may have the figures intact
  2. I love it when they take the stuff out of the envelopes (that they had opened with the yard shears) and then staple the one piece of paper that we need to the envelope along with all of the other contents of the envelope.... and then they make notes on the paper and the envelopes.... so you don't dare toss the stuff!
  3. if it weren't for the fact that it skewed the mort int and re tax deductions, you might could attribute it to the the philosophy of it being easier to just put it in than to explain why you didn't. the preparer had to do the math to see if it saved any... might as well leave it in. How many of us always put the tax prep fee on line 22 even though for most people it has no tax savings. heaven forbid we leave off the safe deposit box. THEN You get the call: "You left off my safety deposit box for $25". (That is where they keep the quick claim deeds and the physical year reports)
  4. yes the 8829 is the problem. It is not used when going to the 2106. seems odd to manipulate the program to get it to do something not in the best interest of the taxpayer.. Can't help but wonder if the preparer did not know or was inflating billable forms.
  5. for a Home Office on the 2106, the Mort Int and RE tax are not allocated to the business expense. they remain on lines 6 and 10 respectively. When using the form 8829 that goes to Schedule C, then yes the Mort Int and RE tax are reduced on the Schedule A. On the ATX worksheet for the Home Office input there is a note at the top that says: Per Pub 587, mort Int and RE tax for employee activities are deducted in full as personal items on Sched A. These amounts will not allocate to an employee activity. Still, even if it is not reducing these deduction on the Schedule A, I agree that it doesn't make much sense to deduct them if the total is not greater than the 2% of AGI. Perhaps it is a case that the income fluctuates from year to year so they just calculate them every year to see if they help. Certainly the AMT is also a consideration for federal. But in some cases even if there is no benefit for fed because of AMT there is for state, Of course, if the total is not over the 2% then no savings anyway.... but some people will do it because they can charge for the form... .
  6. the key is that they are receiving a series of substantially equal payments over their life expectancy or if joint beneficiaries over the joint life expediencies. Lots of people retire before age 59 1/2. when paid as an annuity it is not premature; a one-time distribution is premature (unless there is an exception)
  7. I had one of those. Like you, I knew it was qualified (he is 68 and contributed to the ROTH 100 years ago... well in 1998 anyway) I know his cost basis, so i put that on line 22 so that there is no taxable. Now... if the cost basis is less than the distribution, then that won't be a fix. of course, the real fix is to get a corrected 1099-R.... but we all know how well that will go...
  8. Longtime client has a disabled son, so she was advised to set up a trust for him. She asked me if the legal fee she paid to set up the trust in 2014 is deductible. She did not ask me in 2014. She paid another $3,500 in fees in 2016 because it was not done properly in 2014 when she had paid $6,000. I asked her, "What is in the trust?" She has no investments. The only asset she had was her house which she sold in 2016. Her income is a government pension and Social Security. She told me she has a life insurance policy for $400,000 that is for the disabled son. She gave the not disabled son $200,000 from the sale of her house for him to buy a house. So she has about $10,000 in cash remaining. For this she paid $9,500 in legal fees!
  9. Thank you yes, I have been researching that aspect of the gain. However, I still can't see the value of spending $20,000 to improve a house that is to be torn down.
  10. I wanted to take the opportunity to thank the people who, last year, had suggested using Nuance to convert our ATX pdf organizers to fiillable forms. I bought it for last tax season and really appreciated having this tool. Now, after a year of experience, I am so pleased to have this capability. It helps make a useful and professional looking organizer to send to my clients. thanks so much! The information that people share is so valuable!
  11. Client sold a piece of land with a house and a store to the state of TN for a new road. she had been in negotiation with the state for almost three years for the price. During that time, she spent over $20,000 on the house to "Increase the market value, so they would pay more" They finally settled in 2016. They did not pay any more than first offered. so during that time, she put on a new roof, new carpeting, $7,000 carpentry... all for a house that will be torn down? She and her brother had inherited the property from Daddy in 1984. Of course, she has no records of value of any of it back then. (she is working on it) Brother gave her his half some years back when he was going through a divorce. So now she gets to pay tax on the entire gain (she is already in the 35% tax bracket before this) and then she will gift him his half of the proceeds. Family had lived in the house off an on over the years. No one was living in it at the time, so no real need to keep the house inhabitable... Yikes! Why didn't she just sell it to TN when they first asked instead of putting all of that money and time into it!!! Rant over....
  12. Perhaps we need to try home visits and interrogation! We all know that when you walk in a house, you can tell if children live there! Look each child in the eye and ask: where did you sleep last night, last week, last month..... so what if she is 8 months old... read what her eyes are saying!
  13. my daughter is going to graduate school in France. It is an eligible institution. It has the magic code from Dept of Education. anyone want to wager the chances of her getting a 1098-T at all! (figured I would give everyone a good laugh!)
  14. Catherine, Indeed that is the key: to answer the question that they are asking not the question that I think they are asking! I recognize that I must slow down and read every word...
  15. Thanks Rita. I won't clutter up my brain with the fine points. I figured that they would be testing on things we need to know now to do accurate returns. Not details about a long outdated subject matter. Isn't is amazing how many years ago that credit was!! Feeling very old these days...