ann newman

I not a great complainer (except to my sister and husband) but I won't be back with ATX. Firing tech support and I felt it's affects- things weren't fixed. The changes to log on the website were beyond stupid!!!! Later in the year things that used to work didn't anymore, maybe they wouldn't have put in any of the programming to allow some of the economic stimulus late stuff but we sure didn't have a chance without any designated programmers. Years ago I went through a software buyout where my program was the poor cousin programmed by another company's programmers and I learned to used a lot of whiteout (cause things didn't calc correctly)- now in these days of efiling - I'll just shop for something. And that's saying a lot because I've been with ATX ten years maybe. .. more years than I even have loaded on my computer currently. Good luck on your predictions though as you are probably mostly right. I will miss the usefulness of this board on software issues but it's still a better board than my state CPA soceity for tax issues. Most of the posters here will give a citation - I really like that. Ann Newman

I don't know how much it helps but I looked up a blank SI-200 C and It comes with an "S" in the upper right corner so I don't think it has any tax significance. The instructions include rules for publicly traded companies and there are unlikely to ever be any publicly traded "S" corporations due to the number of shareholder limitations. I suspect your client is not an "S" corporation if they have no recollection of making or filing an "S" election. If they had been an "S" corporation, they would NOT have been an disregarded entity - they would have filed an 1120S (DUE March 15th) and the income would flow through on a K-1 to their individual return. If they are not an "S" but a regular corporation, then they file an 1120, which was also due March 15th. Is this their first year of operation? If not, what did they file last year?

The IRS now has limited hours and days for online application. This application is available during the following hours: Monday - Friday 6:00 a.m. to 12:30 a.m. Eastern time Saturday 6:00 a.m. to 9:00 p.m. Eastern time Sunday 7:00 p.m. to 12:00 a.m. Eastern time if you go to the irs website under business, employer ID number, then click apply online, you can still get an immediate number if you apply during the right hours and day. Ann

Do they have other employees? If not, consider having them amend payroll and add the medical insurance to their 2007 payroll. Health insurance is not subject to Fica taxes or fed unemployment - possibly state unemployment check with your state - so the cost of amending may not be that bad. It increases their wages, decreaes their S corp income and allows them to deduct their health ins on page one (family coverage if included). If they have employees they have to cover qualified employees to be exempt from fica and unemployment taxes(non-discrimination tests). I hope this helps. It isn't a very painful amendment but it's hard to fill out a 941-C because none of the taxes change - only gross wages. Ann Newman

I once had the dubious "pleasure" of being PTA president. I believe the answer lies in your bylaws first which probably don't require dual signatures. Then look to your insurance and bonding company. Our bonding company required double signatures to prevent embezzlement. I did call them because all our checks had only one signature line and previously, we had only used one signature. The bonding company obviously preferred we use two signatures so whenever possible, we just signed one officer below the other. I spoke with other PTAs and many did not use the double signatures even though they were supposed to. Another overlooked issue is separating the monthly bank reconcilation from the person (usually the treasurer) who prepares the monthly financial report. According to our bonding company, two different officers had to perform these duties. Our bonding company let this one pass as long as the PTA compiled with using an audit committee at least annually that did not include the treasurer. Hope this helps. Ann

For HOH the taxpayer must be unmarried, have paid more than half the cost of the upkeep of the house, and have a qualifying child OR qualifying relative IF that relative meets the relationship test not the "live with them entire year" or "multiple support test". So if uncle isn't falling under a multiple support agreement; HOH rules are met.

Was the debt on the residence ALL acquisition deb? The "Tax Free" portion only applies to debt forgiveness on ACQUISTION debt on the primary residence. So it will not apply to the rental at all. I'm sorry I'll have to let some one else answer the rental dispostion because I have to get my kids ready for school but it might be like a sale but don't quote me and I can't look it up right now... sorry. Ann

Expenses to adopt a spouse's child are not qualified adoption expenses therefore the cost of her husband adopting her children would not qualify for the adoption credit. It states it clearly in the form 8839 instructions.

I would explain the rules...depending in the school - it is possible that enrollment fees, books and equipment could run in excess of $10,000 - for instance a technical school, engineering/design or art school. Just be sure she knows room and board are not qualified expenses. I think an explanation and perhaps strongly suggesting she list out and track her qualified expense would fulfill your due diligence. Ann

I have a client who married in 2006 and filed a joint tax return in 2006. Now she has been granted a decree of annullment and needs to file all back years as though the marriage never was (Luckily just 2006). Has anyone been there, done that? After an interesting hour with the IRS, for federal purposes I'm supposed to file a 1040X for my client and her non-ex-spouse will also need to file one. Each starting with the joint return and moving to the single return. Basically one 1040 with have two concurrent 1040Xs???? My state, Arizona, suggests I send a copy of the decree to their "tax assistance dept", amend the joint return to zero and then file separate new state single returns. Sounds better except I don't have authority from her non-ex-spouse to file a zero joint return and I don't know where to apply the payments from joint return. Thanks for any advice...or especially any citations......Ann Newman

I have a CPA friend who has a client who is an auto dealer. Hundai or Honda or one of the auto manufacturers wants this client to open a dealership in a new area that is just being built. They are offering an incentive of $500,000 to offset the costs of building the new dealership plus a flat $50,000 a year for up to ten years as long as he keeps the dealership open and doesn't sell it. The first $500,000 seems like it could easily be an offset to the cost of building reducing basis of the building and equipment. The client is trying to set-up the payment to go directly to the builder of the dealership. Could the remainder which is a set amount, not subject to sales, also be set-up as a receivable at construction and reduce the basis in equipment/building/set-up costs of the dealership? Thanks for your input. Ann