Edsel

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About Edsel

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    TN
  1. Design and usage of the 3115 should be to change accounting methods and not simply to correct errors. I believe the 3115 to be one of the most needlessly proliferated of all forms. If you are doing it "wrong" and now are doing it "right" doesn't mean you've changed methods or approach. It could simply mean that you made a mistake. From the original post, the rules and procedures were in place from the very beginning about capital leases, imputed interest, present value, etc. None of these change simply because it was done wrong. Not that it applies to this situation, but most of the needless 3115s I have seen have been for depreciation, when the only "change" was the wrong year, the wrong application of DDB, misuse of "bonus" depreciation, and mishandling of s.179. These are simply errors and not changing any of the rules or procedures of depreciation.
  2. Roberts, I'm thinking there would be a W-2 (if indeed any of this is legitimate, and it's not). My last exposure to this was with a number of USCitizens living on Kwajalein Island (Marshall Islands). They were exempt from income tax but not from Social Security or Medicare. At the time, they could earn up to $75,000 with no income tax withheld, but SS and Med were withheld at the normal rate.
  3. Thanks for the responses. Sorta reinforces what I thought and was able to research. Gonna tell my client I can't go down the road with him on this. Still don't know why his co-workers are getting refunds.
  4. Strange phone call from a good, long-time client. Backdrop: Japanese, German, and Korean auto manufacturers have plants all over the sunny South - in particular places where they are unlikely to encounter a labor union. I live in the middle of two Nissan plants - one in Smyrna, TN and another in Decherd, TN. Both plants have "posted in conspicuous place" some message that the plant property is under foreign sovereignty or some such message. I don't know whether this is true, or to what extent it is true. And some of the workers are claiming foreign income exclusion by virtue of working at these plants. My client tells me they have filed amended returns for 3 prior years and are receiving thousands of dollars in refunds. In busy years, with overtime, a skilled worker can easily make over $100,000 per year at either of the two plants I mentioned. My client tells me a couple people have refunds over $25,000 and this is easily believable. What is NOT believable is that they qualify for the foreign income exclusion. I've looked at the IRS definition and simply cannot find any support for this. Keep in mind that they have these refunds because of amended returns. The 1040-X cannot be electronically filed, so some IRS employee has to see these returns before entering them and arranging for the refunds. What say ye? Is this a local hoax, or is there a legitimate way for them to be claiming refunds??
  5. Sure it is! Typical of worthless legislation, those politicians in my state were smiling on TV when this "Do not Call" was legislated. The result is what happens when politicians want to pass a popular law, but never come up with any enforcement money. In recent days, the cellphone companies have been on TV telling everyone that they are going to stop robocalls on cellphones. In the conversion from land-lines to cell-phones, the phone companies are now reaping financial objectives they were never able to achieve in decades worth of land-lines: namely the ability to charge by the minute for local calls! Cellular customers who now look at the "caller ID" are simply not answering the phone, whereas without the robocalls they would routinely answer the phone and accumulate minutes. Since there is a negative economic impact to huge multinational fortune 500 companies, my guess is the providers will be more successful than government efforts. Note that the same providers are not acting to protect land-lines, as the economic benefits do not exist. My wife and I receive at least 15 calls a day from unwanted callers. I tell her to not even answer the phone to hang up, because it verifies that the caller has reached a working number.
  6. A client has credits for "increasing" R&D costs dating back to 2001. There has been insufficient income to absorb all the credits. Is there a limit to how many years these credits can be rolled forward? Looked at section 174 as well as instructions to form 6765 and don't see any discussion as to whether there is a time limit. Form 6765 addresses current year only and thus is not relevant to this discussion.
  7. 99% C Corp owner has a life insurance policy for $1,000,000. The C Corp at one time had a line of credit with the bank, and the bank required him to carry this policy with the corporation named as beneficiary. The policy is still in effect but the line of credit requirement is gone. When the line of credit was paid off, his age was such that keeping the policy was a prudent thing. Premiums for this policy last year were $14,000. Can the corporation deduct this as an expense??
  8. One year ago, a profitable C Corp, had an unusual $5000 loss. At the time, it was considered uncharacteristic, and the company would return to profitability. So the corp elected to roll FORWARD the loss instead of backward. It is my understanding that when this is done, the election is irrevocable. Another year has passed, and the 100% owner has had an epiphany of some sort, wants to do something different with the rest of his life, and has decided to abandon the corporation, drawing out his earnings over a period of time. So the last year has passed, and there was another loss, this one for $3500. The amount showing on the face of the 1040 (line 29) is $8500. We would like to carry back this amount two years. I had thought all we could carry back was $3500. Am I correct? If so, is my software putting the wrong amount in the NOL?
  9. Semper stupidus. Phrasies borniei prodigii collosus moronos.
  10. Thanks CPAMan. I thought it was illegal to use IRA funds to finance such personal business. You say it can be done. If it can be done I guess it's no worse than a ESOP with Enron.
  11. To JoanMcQ Joan, I can almost swear you used to post on another board and were from Sacramento. Some of your posts were from the heyday of our favorite Roni Deutsche. Are you now from Nevada? I know a few people that got sick of the politics in CA and moved to NV.
  12. Just so you can inform the ignorant...can you tell me what a ROBS is? Is it like a thief?
  13. I am in the business of preparing taxes. I would be happy to prepare their tax return, and not feel obliged to give them a "soundbyte" over the phone, which this customer thinks would be adequate. There are numerous elections which come with depreciation -- and an IRS publication which is a half-inch thick. Don't tell me you are going to use TT and expect me to advise you. The advertisements for TT are everywhere, and tries to make the listener believe they can spend a lousy 40 bucks and be as smart as a CPA.
  14. Tell him to raise the selling price enough to cover the double taxation if buyer wants to purchase only the assets. Simple as that.
  15. ATX

    I increase rates to accomplish 2/3 of the increases I have to incur. i.e. if my costs increase 6%, my rates go up 4%. I have had only one year in recent memory where I didn't have to increase prices. Most of the increase in costs come from sources within the industry. Providers of seminars, IRS fees, postage, publications, etc. I am lucky with software as Drake has increased prices only one time in 20-something years, and it was only $100. Another thing which doesn't register as a price increase is the amount of time I have to spend in the off-season maintaining files, records, etc. Example, I project all known depreciation for the succeeding year in the off-season. And I do charge for depreciation schedules, but not until the next year. Much of the competition does not raise prices. Most preparers do, but TurboTax never seems to go up, and there is now a number of "free" do-it-yourself options. The public doesn't know it, but "free" is worth what you pay for it.