Leaderboard

I keep getting these e-mails from the IRS asking for preparers to volunteer their time to help the poor taxpayers who cannot afford to pay a preparer. I wonder if the IRS has ANY conception of how much pro bono work many of us do in our own practices. I never charge an active military service person. I rarely charge for Homestead Credit returns and if there is extra work; it is only a pittance. I know most of my clients well enough to know who can afford what and I truly believe that it's not all about money. (Not that I don't like money)! I have amended enough returns prepared by VITA to know that I don't want to go there. These amendments are also done pro bono. Also, does the IRS ever consider how many children, parents, brothers and sisters that we all have? I do my volunteering at home.

>>How do I handle this disposition of asset on S-corporation tax return<< The corporation reports (and presumably passes through) $245,000 capital gain (assuming "donor basis" means the corporation's adjusted basis). In addition to the capital gain, the shareholder reduces basis in stock (and reports ordinary gain if there isn't enough basis). The son gets a basis step-up and a new depreciation schedule, and hopefully they all get a new attorney.

"and they are reporting the gift on their gift tax return" A corporation would not file a gift tax return nor would a corporation be able to gift to a non-charitable organization. If the asset went right from the corporation to the son, the son would pick up income at FMV and the corp would record expense for whatever the payment was being made. It does not sound to me that the latter was the desire. Broken down into its simplest element, the result I previously posted is the most likely - given what we know.

Taxed: I said it might be 50% of the extra cost. Not sure what Parker cost but I think I would have to add another app for a forms package to cover things ATX has but Drake doesn't have. Not sure if that would add up to $900 or not. Then there's the familiarity I have with ATX. An early look at Drake tells me it's going to be a learning process. Then there's the concern (as discussed) with having a backup program. So if I'm going to spend another $900 anyway, I would view the other $900 worth it for the intangibles. Having both programs for the upcoming season gives me more time to see if ATX improves, learn Drake, compare the two. It's one thing to read others' post about a program and another thing to start using it yourself. So I don't look at it as spending an extra $1800 but maybe only an extra $900 (or maybe a little more). More and more people are commenting on having a backup program. This is making more sense to me with the tax laws changing so much and the program companies trying to keep up, buying and merging, cutting corners with their costs or their programming. We saw the results with ATX. I heard TaxWise was worse than ATX last year. There have been comments on the higher end programs too. Lacerte, ProSeries. I don't know the specifics. But their pricing is way too high for me. Even with both ATX and Drake, the cost is much lower than the high end programs.

If the asset was titled in the Corp name, then it is a distribution to the shareholders at FMV with gain being recognized by the corp and consequently the shareholders on a pass through basis. Basis in hands of the donee is basis in the hands of the shareholders which would be, in this case, FMV. Here is a good summary: http://www.borelassociates.com/topics/Distributing_Property_to_S_Corp_Shareholders.pdf

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.