mwpope

Perfect, thank you. I went there, found a link to this particular partnership, and learned what I needed to know. You're right, I did read the instructions and most were posted in my previous comment by the "*" but even though I read them I didn't comprehend them. The website you gave me had a powerful tool that would export the clients specific K-1 info into to each applicable IRS form. I now see it goes on E pt II Line 28 column H. Now I can work on understanding why it goes there. Thanks again, I spent two hours last night reading but getting nowhere. Your web link post really helped. MWPope

Sometimes I'd like to say, "Do you want to really pull one over on the IRS ... here, just mail in this W-4. The zero means that's how much you want to pay them in taxes. Next year they'll give you a bigger refund. How sweet is that?"

I prepare only one 1041 for a client who normally only has 1099-Int and 1099-Div income. In 2010 he invested in a PTP as a domestic / limited partner. Box 1 Ordinary Business Loss =(119) Box 5 Interest = 5 Box 6a Ordinary Dividends = 4 Box 11 C Other Income (loss) = (3,829) - this flows to 6781 and on to Sch D. Box 11 F* Other Income (loss) = (4,910) - ??? I don't know where this is to go. * Partner instructions attached = "Under Temporary Treasury Regulations section 1.469-1T(e)(6), non of teh distributive share items reported to you on the K-1 are considered to be derived from a passive activity. Other Income, Box 11 Code F - Net Ordinary Income (loss) from Swaps. He has a beginning capital balance of 27,751 and an ending 18,902 as a result of the overall 2010 loss of (8,849) identified above. Any guidance in how this loss should be treated would be greatly appreciated.

I have a new client with a 1041 Trust that reports interest income and capital gains from the installment sale of a home. This transaction occured 5 years ago. The gross profit percentage is 100% which looked odd to me. I'm asking for the original 6252 to review the calculation but from what I can tell the home was sold for 132K with a 32K basis. (the mother sold the home to one of her daughters prior to her passing at FMV). I would expect a 75.75% gross profit margin (100K/132K). If the above is correct, can I go back three years to amend the returns and just state the correct gross profit margin and use that going forward or does a certain form need to be filed to show the correct calculation of the gross profit percent?

My client received a 2010 1098-t with 4K in box 4 as a refund of prior year tuition. Do I net down the 2010 education cost or does this necessitate amending the 2009?

Here is the website I was reading last night that talks about the 5 year: http://www.journalofaccountancy.com/Web/20092360.htm. I just wouldn't recommend reading a Revenue Procedure at 3:00 AM. NOV. 23, 2009 The IRS on Friday provided guidance on the new expanded five-year net operating loss (NOL) carryback rules, which were recently amended by the Worker, Homeownership, and Business Assistance Act, PL 111-92. The guidance is contained in Revenue Procedure 2009-52, and it explains how a taxpayer elects to carry back an NOL for three, four or five years. In February, the American Recovery and Reinvestment Act, PL 111-5, amended IRC § 172 to allow eligible small businesses to carry back 2008 NOLs for a period of three, four or five years (instead of the usual two-year limit). The Worker Act expanded this treatment to include NOLs incurred in 2009 and allowed all businesses—not just eligible small businesses—to make the election. The Worker Act limits the amount that can be carried back to the fifth year to 50% of the taxpayer’s taxable income for that carryback year. The election is not available to TARP recipients or members of a TARP recipient’s affiliated group. A taxpayer makes the election by attaching a statement to the taxpayer’s return (or amended return) for the tax year in which the NOL arises. Details are provided in section 4 of the revenue procedure. The election must be made by the return filing due date (including extensions) for the taxpayer’s last tax year beginning in 2009. The election is irrevocable.

I have no experience with NOLS but one of my taxpayers found himself in that postion in 2009 with a 6K NOL. Is it possible to go back just one year or do you have to go back 3 (I know 5 is now an option). What "elections" do I make on 2009 to go just one year? If I go back one year can I just prepare a 1040X with the NOL on 1040 line 21 or do I need to prepare a 1045? From what I read, a 1040X is OK but I don't trust the extensiveness of my reading.

How would one know if mortgage insurance premiums paid at a refinancing is deductible as Qaulified Mortgage Insurance Premium if not reported on a 1098? My client refinanced his home in 2009. On the settlement form is "Mortgage Insurance Premium for 12 months to Radian Guaranty, Inc." for $2,290 (which is 1% of the loan). Quicken Loans originated the loan, and it is now services by JP Morgan Chase. Neither Radian, Quicken, nor Chase has issued a 1098. When I call any of these entites I get no clear answer other than it's the other entites responisbility to report. Per PUB 936 "Mortgage insurance premiums. The amount of mortgage insurance premiums you paid during 2009 may be shown in box 4 of Form 1098. ("may" being the key word)

Thanks for everyon's quick response.

After reviewing the clients tax return I submitted the efile, only to have them say 60 seconds later, "Opps, I closed that bank account, can we get it to go to a differnt account? I've sent AXT and email asking what I can do at this point but I'm too nervous waiting around for an answer. Does anybody know how I can get a stop put on this?

In this particular case they are in the 15% tax bracket so they'll only pay $68 in income tax and will be entitled to a $135 credit. For people higher tax brackets and with state income taxes would be a wash. Thanks for everyone's input.

I understand the concept of double dipping but if he reported the expense he did incur and also reported the rebate as other taxable income then there would be no double dipping and both transactions would be in theory reported correctly.

I have a client that paid $450 to have insulation added to their attic that would qualify for the credit. However, the gas and electric utilities sent them rebate checks to cover the cost. Does the taxpayer therefore not qualify for a credit since there was no net out of pocket expenses?

The owner started his own business in Oct 2007, had an attorney set up an S-corp for his repair business and a separate LLC for the building. He had H&R Block prepared his 2007 return. He came to me late in April 2009 since he is a neighbor. I advised him that if he had a separate LLC for his business with a different EIN, he should not report the building on the same tax return as his repair business. He therefore does not pay rent because he would just be paying it to himself. It can be structured, however for that way in 2009.