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I'm pinning this topic so that it will stay at the top of the post listing and be readily available without searching.

This helped answer some of my "procedural" questions on the ATX software --- From a comment on the ATX site made 11/17/14: The software will include the IRS instructions and forms, however there are several pieces of data that you must obtain from the client and enter manually. If the taxpayer had full coverage all year, then you will just need to check the box on line 61 of the 1040. If the taxpayer receives a 1095-A, you will need to complete Part II of the 8962. If there is a difference between the Premium Tax Credit calculated and the Advanced Premium Tax Credit received, it will flow to line 46 if the taxpayer received too much or line 69 if the taxpayer did not receive enough. If the taxpayer didn't have insurance or is claiming an exemption, you will need to fill out form 8965. If the taxpayer claimed an exemption through the marketplace, then the preparer will enter the Exemption number in Part I. (The taxpayer would provide that exemption ID number to you) If the taxpayer is claiming an exemption on the tax return, then you will select the exemption in Part III. If the taxpayer did not have insurance, then you will have to complete the Shared Responsibility Payment worksheet for each member of the household that didn't have insurance and the total amount will flow to line 61 of the 1040. Note: Part I, Part III and the Shared Responsibility Payment worksheet could be filled in the same return depending when the exemptions or lack of coverage apply. It is also possible that a 8962 and 8965 could be completed in the same return if the taxpayer had insurance for part of the year. Stephanie B Customer Care Director

What do I say/do? First off, if a call, I let the person know there item is not something I can comment (note I do not say answer) without more thought. I ask they send the question by email, and I will answer by email so I can write out my thoughts. A certain number never write. Those that do, I can respond with links and a short comment. Those that continue to go what I consider too far, I tell then their question is beyond the type of help we offer with our software license. Those that persist, I offer a refund. A refund usually is refused, they understand, and want to continue using the software. Have one or two customers who are customers only because they agreed to not ask any questions (reinstated after a refund, I keep good notes.)

Just had this question in a Facebook message. She's not my client. "I have a question. I am filing out a new W-4 form. what is the best way for me to get money back at the end of the year but not taxed so much during the year." So many smart @$$ responses, so little time.

Yes, it can be a problem sometimes. Tax professionals seem to attract legal questions, estate planning questions, marriage counselling questions, and business development questions, in addition to tax questions. Heck, we get software questions too. Besides referring them to proper specialists, where appropriate, I always just hiked the fee and ranted to Don.

Jack is answering about the recipients basis where the recipient acquires the donor's basis (steps into the shoes of the donor). If you are actually asking about how to prepare the gift tax return and about determining the fair market value at the date of the gift to report on Form 709, Sch A, column F, that is a much more complicated answer about how to determine the value of an ownership interest in a closely held business on a piece of property. If that is really what you are asking about - If by property you mean real estate, I'd suggest your client use a qualified professional to appraise it because the documentation of how the FMV was determined is required to be attached to the gift tax return, and gift tax returns are reviewed by humans at the IRS. That is a risk area for tax preparers since doing valuations aren't within the normal scope of a tax preparation business. A typical scenario that I've encountered a few times goes something like this: A parent owns his own residence and a 2nd house that the child is living in (for little or no rent) and transfers that 2nd home to the child by gift. Yes, the child's basis comes from the donor's basis, but in preparing the gift tax return, the preparer must explain the method used and report the FMV on the date of the gift because that determines how much of the unified credit is used up by that gift and calculates whether there is a taxable component to the gift at all. Business valuations are much more complicated and especially so when the business is closely held. There are business appraisers that do that too. There are methods that the IRS finds acceptable and that take into consideration a variety of factors that I feel are really beyond the scope of something that could be easily or completely explained here. Again, an explanation of the valuation method used must be filed with the gift tax return. If you are considering doing this, you might want to check with your malpractice insurance agent to make sure that type of service is covered. As an example, I had a C corp client that gifted 76% of his ownership in his closely held business to his son in stages over several years. To highlight a few of the areas considered in that valuation, those factors included the type of industry, the size of the business by volume or asset base, its locale, its competition, stability of client base, discounts for lack of marketability due to being closely held, adjusting for owner compensation that might be in excess of what the business would pay an outsider or manager to perform those same duties, and much more. That list of factors isn't meant to be a full discussion, obviously, so don't shoot the messenger. I was only trying to show how business valuations are complex. A full explanation of how those valuations were done was attached to each and every gift tax return that was filed. No funds changed hands, the son received something that had appreciated close to 50 times more than the dad's basis in the company, and son's basis in the company is equal to 76% of dad's basis. The gift tax return filed by an individual tracks the total gifts given by that person over his or her lifetime so that one knows how much of the unified credit has already been used up while he/she was living, and that is used in determining if there is a taxable estate or not at the person's death. To be basic, the current law says that a person can transfer $5.34 million of assets either by gift during his lifetime or at his death via his estate without paying tax. That is what the unified estate and gift tax exclusion is all about. Does that help you at all?