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I'm looking forward to the results of the Beta testing as well. Drake is now my primary vendor and I expect them to continue to be so until I retire. But I don't take anything for granted and even in my small practice I think it's important to have a backup plan. I'd like to have ATX as my backup vendor since I'm already familiar with it. Much better to have a familiar company as your backup vendor than one you have to learn all over again.

The problem the letters are dealing with is as old as business itself. We all KNOW that many business operators do "Cash under the table" or "barter" transactions that are not reported. I have heard people that are on welfare, food stamps and Section 8 housing say "I am paid 'under the table' so I don't have to report the income and can keep my government assistance." Last tax season I sent 2 prospective new clients out the door after they used those very words to me. "...has created some heartache in the small business community." "There's an emotional thing when you get a pretty ominous-looking letter from the IRS [saying] you might have done some bad things." The only ones with heartache or emotional distress are the ones that know they have been underreporting income. Sorry, no sympathy here. I saw two waitresses get notices for additional income after the employer, two years later, was audited. Seems that tips on credit card payments were around 17%. Tips on cash payments were 2%. Hmmmmmmmmm Restaurant owner had to pay additional SS & Medicare tax on the calculated 15% shortfall and the waitresses involved all received letters showing they had incurred the additional income.

Wait till those of us on the Beta Testing squad have given it the once over. I intend to beat it relentlessly with the most difficult returns and scenarios I have. Told Keri that too. "You want me on the Beta test squad, I want fully working version of what you have and don't expect me to pull any punches about problems I find.. We are still switching to Drake.

Dependability is way overrated. After all, this is only our clients' most sensitive data. Just curious. Now that you've switched to Drake, have you identified your backup vendor? In my mind, that second step is just as important as the first. (Not just identified, but also implemented).

Only reply if you get this!!!

Jack, she often irritates me too, but you need to leave out the personal attacks please.

Jack, you have no basis for saying this except to insult someone publicly. Please refrain from the personal attacks. Thanks.

Interesting. It is definately not a "arms length" transaction since the owners of the Sub S (100% mother and father) transferred it to their son (lineal descendent). What was the FMV of the asset and owners basis at the time of transfer? Was this a fully depreciated asset?

>>> Might be easier just to get the QB file from the client and see what's in there <<< Given what you have told us about this client's recordkeeping, you may find a lot of surprises on the actual QB file. Every time I get a QB file from some of my clients, I have to scratch my head and make more followup calls.

Take a Xanax Try not to type, "can't you frikkin read a damn notice!" in my answer. I've gotten unrelated items fixed along with the issues addressed by the CP2000 sometimes. It depends on what it is and whether it's something the AUR unit has the authority to fix.

Thank you for the lesson on a sole proprietorship as I must have been doing it wrong these last 45 years. It seems a little strange that you don't think a sole proprietorship could have a long-term capital gain from the transactions involved with the sale of a proprietorship business. True that the business must recognize gain/loss from the sale of assets but that does not preclude a "individual owner basis" gain/loss from the sale and from other items like sec. 1221 assets. In the case of the example in this post it was stated that the only assets were A/R, and software development. We don't know any values but I would guess that the A/Rec were not sold as individuals usually like to keep that. It would be nice to know if allocating the sale price to software development would be a reasonable allocation amount or if the sale price should also be allocated to something else such as the value of the going business. I would remind you that a partnership is nothing more than two or more sole proprietorships and there is nothing that says an owner does not have a tax basis in a partnership or proprietorship. >>Sec. 1221. Capital asset defined -STATUTE- (a) In general For purposes of this subtitle, the term "capital asset" means property held by the taxpayer (whether or not connected with his trade or business), but does not include -<<

Watt watt watt watt watt watt watt? Only 7 watts; you're not so smart! (Goon Show; British radio series) Not only did I get the joke, I *have* one of those meters downstairs and still use it. My husband has two wigglescopes down there, too (oscilloscopes; extra points to whoever gets the source of the term I used for them).

I disagree. A sole proprietorship has the same basic 'cost basis' in a business as any other business organization. True if the sole proprietorship is not keeping proper accounting records it is difficult to determine basis. It does not matter if the loan/capital contribution was "booked" as it was indeed an investment in the business or the business would not have had the cash to operate. It is not too late to book the investment/loan if it can be proved that it was made and not already been deducted or repaid. The transaction of repaying the loan with the sale proceeds has nothing to do with the recognizing of business operating income or loss but would effect gain/loss on disposition/liquidation of the business. Therefore, there are two issues, possible income/loss of the business on Sch-C and/or form 4797 and possible gain/loss on form 1040 sch-D.

You are about 2,000 miles too far West. I would truly entertain purchasing your practice but for the logistical mountain!!

I am the backup vendor. I will NOT move our clients information offsite. I have redundancies built into our operation that provide me all the protection (actually more) that an offsite backup company would, and the information is under OUR control. Each morning, the backup external hard drive from the day before is connected and the one hooked in (with last nights complete backup) is taken back across the street to the house of my boss's parents. The server is backed up in two locations on the network as well. I have yet to hear of a Drake user that lost all the work on a return due to a program glitch. Drake saves each entry immediately after you move to the next form or page. The worst you could possibly lose in the last 2 minutes of work. Yes, I have run the Drake software through ALL the paces. It is DEPENDABLE, speedy and intuitive to use. Average wait time for tech support increased last year to 12 seconds. Longest wait was 3 minutes. I HAVE checked it all out. Price was 4th or 5th on the priority list for choosing new software.

We chose Drake because it works dependably.

I'm shocked you're not staying current on things, Eric.

Watt are you talking about? I don't get it.

As George Takei would say, "Ohm, my!"

The way to insult 4 major Sci-Fi groups in one step.

... and sometimes they go to the mall in their uniforms and sit in the food court talking into their communicator pins.

Resistance is ......

My wife and I were watching Who Wants To Be A Millionaire while we were in bed. I turned to her and said, 'Do you want to have Sex?' 'No,' she answered. I then said, 'Is that your final answer?' ... She didn't even look at me this time, simply saying, 'Yes..' So I said, "Then I'd like to phone a friend." And that's when the fight started... ________________________________ I took my wife to a restaurant. The waiter, for some reason, took my order first. "I'll have the rump steak, rare, please." He said, "Aren't you worried about the mad cow?" "Nah, she can order for herself." And that's when the fight started..... _____________________________ My wife and I were sitting at a table at her high school reunion, and she kept staring at a drunken man swigging his drink as he sat alone at a nearby table. I asked her, "Do you know him?" "Yes", she sighed, "He's my old boyfriend. I understand he took to drinking right after we split up those many years ago, and I hear he hasn't been sober since." "My God!" I said, "Who would think a person could go on celebrating that long?" And then the fight started... ________________________________ When our lawn mower broke and wouldn't run, my wife kept hinting to me that I should get it fixed. But, somehow I always had something else to take care of first, the shed, the boat, making beer.. Always something more important to me. Finally she thought of a clever way to make her point. When I arrived home one day, I found her seated in the tall grass, busily snipping away with a tiny pair of sewing scissors. I watched silently for a short time and then went into the house. I was gone only a minute, and when I came out again I handed her a toothbrush. I said, "When you finish cutting the grass, you might as well sweep the driveway." The doctors say I will walk again, but I will always have a limp. _____________________________ My wife sat down next to me as I was flipping channels. She asked, "What's on TV?" I said, "Dust." And then the fight started... ________________________________ Saturday morning I got up early, quietly dressed, made my lunch, and slipped quietly into the garage. I hooked up the boat up to the van and proceeded to back out into a torrential downpour. The wind was blowing 50 mph, so I pulled back into the garage, turned on the radio, and discovered that the weather would be bad all day. I went back into the house, quietly undressed, and slipped back into bed. I cuddled up to my wife's back; now with a different anticipation, and whispered, "The weather out there is terrible." My loving wife of 5 years replied, "And, can you believe my stupid husband is out fishing in that?" And that's how the fight started... _______________________________ My wife was hinting about what she wanted for our upcoming anniversary. She said, "I want something shiny that goes from 0 to 150 in about 3 seconds." I bought her a bathroom scale. And then the fight started...... ______________________________ After retiring, I went to the Social Security office to apply for Social Security. The woman behind the counter asked me for my driver's License to verify my age. I looked in my pockets and realized I had left my wallet at home. I told the woman that I was very sorry, but I would have to go home and come back later. The woman said, 'Unbutton your shirt'. So I opened my shirt revealing my curly silver hair. She said, 'That silver hair on your chest is proof enough for me' and she processed my Social Security application. When I got home, I excitedly told my wife about my experience at the Social Security office. She said, 'You should have dropped your pants. You might have gotten disability too.' And then the fight started... ________________________________ My wife was standing nude, looking in the bedroom mirror. She was not happy with what she saw and said to me, "I feel horrible; I look old, fat and ugly. I really need you to pay me a compliment.' I replied, "Your eyesight's damn near perfect." And then the fight started........ ________________________________ I rear-ended a car this morning...the start of a REALLY bad day! The driver got out of the other car, and he was a DWARF!! He looked up at me and said 'I am NOT Happy!' So I said, 'Well, which one ARE you then?' That's how the fight started. ________________________________ One year, I decided to buy my mother-in-law a cemetery plot as a Christmas gift... The next year, I didn't buy her a gift. When she asked me why, I replied, "Well, you still haven't used the gift I bought you last year!" And that's how the fight started. My wife and I were watching Who Wants To Be A Millionaire while we were in bed. I turned to her and said, 'Do you want to have Sex?' 'No,' she answered. I then said, 'Is that your final answer?' ... She didn't even look at me this time, simply saying, 'Yes..' So I said, "Then I'd like to phone a friend." And that's when the fight started... ________________________________ I took my wife to a restaurant. The waiter, for some reason, took my order first. "I'll have the rump steak, rare, please." He said, "Aren't you worried about the mad cow?" "Nah, she can order for herself." And that's when the fight started..... _____________________________ My wife and I were sitting at a table at her high school reunion, and she kept staring at a drunken man swigging his drink as he sat alone at a nearby table. I asked her, "Do you know him?" "Yes", she sighed, "He's my old boyfriend. I understand he took to drinking right after we split up those many years ago, and I hear he hasn't been sober since." "My God!" I said, "Who would think a person could go on celebrating that long?" And then the fight started... ________________________________ When our lawn mower broke and wouldn't run, my wife kept hinting to me that I should get it fixed. But, somehow I always had something else to take care of first, the shed, the boat, making beer.. Always something more important to me. Finally she thought of a clever way to make her point. When I arrived home one day, I found her seated in the tall grass, busily snipping away with a tiny pair of sewing scissors. I watched silently for a short time and then went into the house. I was gone only a minute, and when I came out again I handed her a toothbrush. I said, "When you finish cutting the grass, you might as well sweep the driveway." The doctors say I will walk again, but I will always have a limp. _____________________________ My wife sat down next to me as I was flipping channels. She asked, "What's on TV?" I said, "Dust." And then the fight started... ________________________________ Saturday morning I got up early, quietly dressed, made my lunch, and slipped quietly into the garage. I hooked up the boat up to the van and proceeded to back out into a torrential downpour. The wind was blowing 50 mph, so I pulled back into the garage, turned on the radio, and discovered that the weather would be bad all day. I went back into the house, quietly undressed, and slipped back into bed. I cuddled up to my wife's back; now with a different anticipation, and whispered, "The weather out there is terrible." My loving wife of 5 years replied, "And, can you believe my stupid husband is out fishing in that?" And that's how the fight started... _______________________________ My wife was hinting about what she wanted for our upcoming anniversary. She said, "I want something shiny that goes from 0 to 150 in about 3 seconds." I bought her a bathroom scale. And then the fight started...... ______________________________ After retiring, I went to the Social Security office to apply for Social Security. The woman behind the counter asked me for my driver's License to verify my age. I looked in my pockets and realized I had left my wallet at home. I told the woman that I was very sorry, but I would have to go home and come back later. The woman said, 'Unbutton your shirt'. So I opened my shirt revealing my curly silver hair. She said, 'That silver hair on your chest is proof enough for me' and she processed my Social Security application. When I got home, I excitedly told my wife about my experience at the Social Security office. She said, 'You should have dropped your pants. You might have gotten disability too.' And then the fight started... ________________________________ I rear-ended a car this morning...the start of a REALLY bad day! The driver got out of the other car, and he was a DWARF!! He looked up at me and said 'I am NOT Happy!' So I said, 'Well, which one ARE you then?' That's how the fight started. ________________________________ One year, I decided to buy my mother-in-law a cemetery plot as a Christmas gift... The next year, I didn't buy her a gift. When she asked me why, I replied, "Well, you still haven't used the gift I bought you last year!" And that's how the fight started. ________________________________ My wife was standing nude, looking in the bedroom mirror. She was not happy with what she saw and said to me, "I feel horrible; I look old, fat and ugly. I really need you to pay me a compliment.' I replied, "Your eyesight's damn near perfect." And then the fight started........

So this story might fit right in: I rescued my wife from a sinking ship - and that's when the fight started... http://www.heraldsun.com.au/lifestyle/home-garden/shipwrecked-man-graham-anley-saves-dog-rosie-before-wife-sheryl-off-coast-of-south-africa/story-fni0dm3h-1226692445625

Even more likely, he assumed that being still in his 50's, he had lots of time to do some tax planning. At least that is how most people think. Plus few people realize, unless they have been doing some tax planning, just how high the estate tax is. Having paid taxes on it as they earned it, they don't even dream that the government is going to take more than half of what they saved.

Me either, but I'm sure we all have clients that need reminding.

SOLD....