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About Edsel

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  1. yes tax: sad story serious loss

    I haven't yet heard a specific reference to bailing out of a casualty gain with replacement property. If there is insurance proceeds covering the FMV, the result may be a large gain based on historical purchase value. If the owner is confronted with today's cost to replace, there may not be any gain remaining if he chooses to replace.
  2. Capitalization of Software

    Ever since software packages came in "vogue", we have fashioned a treatment for capitalization. The initial purchase of the software package, including installation, would be capitalized and depreciated, and subsequent license renewals would be expensed in the years to follow. This would sorta make sense since the software package would be "owned." As software has migrated to the "cloud", initial purchases of software are much cheaper, software updates are done within the "cloud", and the customer in effect "rents" the software, even to the extent of being charged for access time and data. With this new and increasing pattern, should we: Capitalize the first year of software cloud costs, and expense the charges in succeeding years. Do not capitalize at all, but expense the charges as incurred. Feel free to comment for both GAAP and Tax purposes.
  3. Working Two Different States

    Abnormal, this is the best of all ideas, except the company is a federal contractor and the Texas guy has to be an employee. Thanks. Don't expect any realistic solution from the State of Alabama or Texas. They both fashion arguments to have this guy.
  4. This is a topic for which much has been discussed and I don't know if anything is settled or not. I have a customer with Alabama employees, and is wanting to hire an employee from Texas to work from home. The question is "What state is his wages reported?" Of course Texas has no income tax so that is one complication that doesn't have to be considered. But this is only one employee and there are 10 in Alabama. The advent of "working from home" has brought state tax problems everywhere. One classic case involved a man living in NY while his employer was in NJ. This brought a lot of attention and don't know if it ever got settled. One solution, attempting to be "safe" and not requiring interpretation was to "Let each states courts determine the taxability." This doesn't really work. Each state is greedy and wants all the money. I'm told some state taxing authorities in the northeast hate each other. I had a conversation with one in Rhode Island, who told me it will be a cold day in h___ when we have reciprocity with Taxachusetts. After exploring the matter further, I found out the Tax rates in Massachusetts were relative benign compared to RI. The initial ruling in the NY/NJ case was that the New York courts ruled that all the wages were taxable to New York and didn't care how the NJ courts ruled. The New Jersey courts ruled all the wages were taxable to NJ and didn't care how the NY courts ruled. Neither state wanted to give the worker "credit for taxes paid to other states" which is usually available for venue workers. So the doctrine of "let each state court determine the taxability" doesn't really work. Should my Alabama employer open up a Texas payroll for this guy? '
  5. Investment Companies

    Image counts. Brokers represent big money, and have office appearances to prove it. He works in a state-of-the-art building in an exclusive part of town, and people somehow think they are entitled to fees that they can hide on the back page of the statement. Lawyers same image. But US? They come to a modest office with papers stacked everywhere and talk to someone with none of the aforementioned image. Some of my customers come to my house. We're proud of it, but certainly not the Waldorf-Astoria. I'm convinced by the fees that I see (customers never bother to look), that some of the brokerage houses are making more money than the investor. p.s. in case any of you care, Rita has a very nice office.
  6. Rag-tag administrations in churches abound here in the rural south. I'm not talking about the stoic multi-million dollar church buildings with 2500 members and at least 5 CPAs. We have them too. But if you don't live here, you don't see the hundreds of small church buildings with memberships less than 50. Sometimes one person collects (and counts) the money on Sunday and deposits it on Monday without anyone else ever seeing it. Others don't even give the pastor a W-2 - no one in the church even knows how. If you prepare taxes down here, you will encounter some of these pastors/preachers. Language such as "contemporaneous receipt" is not understood by someone who didn't learn to say "refrigerator" until yesterday. Many of these are good people, just simply not knowledgeable. I am quite liberal dealing with people for whom I believe honestly donate. If the IRS catches these people, then so be it. I am reluctant to enforce something I believe to be unfair from the outset. The IRS doesn't require contemporaneous receipts for equipment, supplies, other expenditures upon audit - why is it suddenly fair that the courts uphold their insistence on "contemporaneous" receipts? If I'm not mistaken, the first court case ruling against a donor was decided in favor of the IRS in 2013, so it may be rather recent legislation.
  7. Which state is the resident state? If taxpayer moved during year, which was the resident state as of 12/31? The crudest, most time-consuming (and probably most accurate) method would be to analyze the statements (not the tax statements) and determine where the taxpayer lived when dividends and CGs were credited to the brokerage account.
  8. The IRS has maintained throughout Cir 1230 that we are not auditors. After all they don't want us taking over their jobs, right? How did we as a profession allow this to happen? We have to answer the self-incriminating questionnaires about children? We have to collect this type information and certify that we have it, and have interrogated taxpayers about this/that. The statements we are forced to make actually perfect the case they can bring upon us - the taxpayer gets off scott-free. Have there been any court cases which uphold our role as a non-auditor?
  9. Apparently some of you believe you are being diligent in reporting miniscule amounts and the IRS will appreciate you for being a diligent preparer. I agree that if this is your approach, you are a diligent preparer. But in reality, the IRS couldn't care less for amounts that scarcely move the needle up or down and create additional data to process, or worse still, wasted time if the client is audited. Remember that if the bank doesn't issue a 1099-INT for less than $10, it is because the IRS has approved the practice. My favorite to "ignore" are brokerage statements (e.g.Morgan Stanley and others) who move temporary money into a MM account with the brokerage house before transacting another security. Typical totals on a 1099-DIV statement is something like eleven cents, even though thousands of dividends exist, and tens of thousands of 1099-B transactions.
  10. IRS Babysitting Position

    Thanks to all who have responded. "Fair" is very nebulous, but what seems to be unfair is the huge amounts being paid, so little credit being given, and then assistance being allowed to "dry up" the benefit leaving so much on the table. The days of the Reagan approach to allow COLAs to apply to standard deductions and tax brackets left many, many things that did not move with inflation. The subject Child Care is one of them. The $6000 base for credit has been around since at least 1979 and has never been increased. In the meantime, the cost of getting someone to watch your child has multiplied exorbitantly.
  11. Egg on My Face

    Rita, I think you need to plaster that egg back on your face. All your comrades on this board are giving you support that you really don't deserve. It's time for you to take deep and painful responsibility for your many misdeeds. Suck it up and move on. By the way, I'm sure you'll want to invite me to your June what-ever-is-happening. I may consider my elite status and condescend to the group long enough to show up. In fact, I'm certain I should be the guest-of-honor.
  12. General Ledger Packages

    Thanks to all for suggestions. Resident bookkeeper is proficient only with coding invoices and doing basic banking. I'll answer questions about my resistance to QB - too user-friendly to non-accounting types. Like giving a 5-year old kid a loaded gun. The owner doesn't like them either, after having them mess up her multi-state payroll for 2 years. Was not the owner's fault either. One of the problems QB gives no resistance - keypuncher can doing anything they want. We all have problems with commingling personal and business expenses (and this can happen with any software, and the problem is universal for all of us who have clients). But when they bought an entertainment set for $1900 out of business funds and entitled the account "TV" its time to back off.
  13. I am SOOOOO grouchy today - NT

    Yes not my favorite situation. I have some big time filthy rich clients who never give a cent to their church or the many worthy non-profit organizations, but they can throw at me 8-10 tickets to [Goodwill, Salvation Army]. Of course none of them have any representation of dollars. This is such concern for the underprivileged. Trophy wife wants a $5000 upgrade to her wardrobe or hubby wants new toys for his vintage electric train set in their basement. And they tell me their donations are worth thousands, until they find out they have to detail everything above $500.
  14. IRS Babysitting Position

    Thanks to all. Not the answer I wanted, nor is it fair, but I will proceed as if your answers are correct. Apparently I didn't work through Form 2441 or didn't enter anything from box 10, W-2. Either way, my bad.
  15. General Ledger Packages

    I won't be doing any of the bookkeeping except for advanced entries. Bookkeeper will do accts payable, payroll, etc. The package will have to resident on the client's computers and not mine.