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The number of returns completed just turned larger than the number of returns yet to be done. I can feel the down hill momentum starting to build!!! :D

Recently on a routine police patrol parked outside a local neighborhood bar the officer noticed a man leaving the bar so intoxicated that he could barely walk. The man stumbled around the parking lot for a few minutes with the officer quietly observing. After what seemed an eternity and trying his keys on five different vehicles, the man managed to find his own car which he fell into. He was there for a few minutes as a number of other patrons left the bar and drove off. Finally he started the car, switched the wipers on and off (it was a dry night), flicked the hazard flasher on and off, tooted the horn, and then switched on the lights. He moved the vehicle forward a few inches, reversed a little, and then remained stationary for a few more minutes as more patrons left in their vehicles. At last he pulled out of the parking lot and started to drive slowly down the street. The police officer, having patiently waited all this time, now started up his patrol car, put on the flashing lights, promptly pulled the man over and carried out a breathalyzer test. To his amazement, the breathalyzer indicated no evidence of the man having consumed alcohol at all! Dumbfounded, the officer said, "I'll have to ask you to accompany me to the Police Station. This breathalyzer equipment must be broken." "I doubt it," said the man, "Tonight, I'm the designated decoy."

The early distribution exceptions from Qualified Plans (including IRAs) are found in Section 72(t). The exception specifically mentions distributions “attributable to the employee's being disabled.” Since the code does not mention spouse, I don’t think you have a case.

Short answer is you report the sale when client receives 1099-A, and report the COD when client receives 1099-C. They are two separate transactions.

>>I've read Pub 4681 and nothing there states it's to be reported<< Page 10 says, "The foreclosure or repossession is treated as a sale from which you may realize gain or loss." So you report it the same way you would have treated a regular sale. It might be a sale of business or rental property, perhaps releasing suspended losses. Or it could be a home or personal use property, with non-deductible loss or Section 121 exclusion of gain. Whatever.

In that case, you better talk to your lawyer. If you have custody of your son, he was released to your responsibility, then the probation officer probably wants to see everything in your son's environment, every place he could hide drugs or whatever his issue was and whatever the conditions of his probation are (maybe no alcohol or no fraternizing with others suspected of joining him in past activities). So, unless your office is really separate from your son's home.... Maybe the court has some guidelines, written or on their web site. Talk to your lawyer.

The clients I am talking about either have very small children (so child credit is NOT outgrown), or grown children. NOT the lack of MWP credit either -- go to the Comparison, page/tab 2, and look at lines 43 (taxable income) and 61 (total tax; BEFORE payments and credits) -- then all the way to the right; percentage change from prior year. I'm seeing line 43 go up X%, and line 61 go up ~2X%. Over and over.

I have had a few that lost the child tax credit for one or more of their children. Coupled with the loss of the Making Work Pay credit, it makes for a pretty good increase. And I am about to the point where if I hear one more client say that their kid is still in high school so they should still be getting the credit, somebody is going to get smacked.

Oh, how I missed that. Thanx, KC, for being here for us. Hope we can send some smiles your way, too.

What did the tired chess player do? He took the knight off

By all means do that. The IRS computers should have no problem with it at all. [The program should not either, but hey, not worth stewing over, just split it and move on.]

If you really want to help this client, convince them to change brokers. The broker is churning the investments and taking the money.

John is so very right. If they get a letter, they will assume that YOU did not tell them correctly, and thus it is up to you to fix it, at no charge to them. Plus they will tell their friends and family that YOU made a mistake! It's not worth it, Steve. I know you are trying to be nice, and not have to charge them if they don't need to file. But you have to look at "Total money coming in" [which is what we call Gross Income] not taxable profit. Because the IRS default assumption is that every taxpayer has zero basis, in all stock sales. Plus, even if they have a net cap loss carryover, the IRS computer does not even net that with the cap gain income for this year. So you are not overcharging them, you are PROTECTING them by filing that return.

When in doubt, file a return. If for no other reason than to start the SOL clock running. And whether or not you find a cite which requires you to file or excuses filing, you can be sure the clients will receive a CP2000 in a couple of years if the gross sales amount exceeds the filing threshhold. Why wait until then, especially because you'll be answering the question "But why did you tell me I didntt have to file?" until you're blue in the face. Clients with that attitude are also more reluctant to pay, by the way. Some of them want to cling to the notion that you are somehow responsible for the notice even though you didn't charge them for the initial advice not to file.

Even though their taxable gains may not meet the filing requirements, quite often the gross sales amount does. In that case, a return is required to show that after subtracting basis there is no taxable income. It is not how many transactions are on the 1099B, but the amount of the gross sales that will trigger IRS interest.