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Here is the IRS's take on the question. http://www.irs.gov/publications/p334/ch06.html

They hide when you look for them. They come out of hiding *only* when you give up and call for help. It's happened to me so often that if I can't find something right off, I start thinking that the best use of my search time might be to put out an apb to the forum.

What's a potamus?

I upgraded. So far so good. I really wish they would give us more info about what they changed so we could check to see if it works.

I gave up after not finding it in the Sch C instructions. Who knew they'd bury in chapter 6 of some damn publication?

Just installed it. No issues. Working on a server with workstations system.

I also put foreign pensions (UK, Switzerland) on Line 21. Yes read the tax treaty; lots of good info in those. Yes foreign tax credit is likely. If the ONLY holding is a pension, it is likely that the FBAR (FACTA; whatever they're calling it this week) is NOT actually required. Pensions are paid out to recipients but are generally NOT in the person's control, segregated by their name, and most likely there is no "account balance" the person ever knows of. Those disclosure requirements are for accounts the client has *some* measure of control over. For pensions, the only control they likely have is submitting a new address to send payment to; there is NO control over the account itself. So, no reporting requirement.

I think the non-conforming part of this is not reporting income that was reported on a 1099, and the reasonable basis is that because it was a rental of less than 14 days it is not reportable income. Unfortunately, Mr. Pencil has not been seen on the forum for quite some time and cannot explain his answer personally since the question did not arise until much later.

Rad the tax treaty with the UK. It depends on what type of retirement it is as to where it is taxed. Does she live in the US or UK?

I don't think it really matters, but as a landscaping business is mostly a service business, I would tend not to use cost of goods sold at all, unless they have inventory.

Yardley, Yours is a good question. If you are attempting to prepare a return pursuant to GAAP and/or Section 263A, you would allocate those expenses that are directly attributable to the production of income as COGS - and wages is one of those items that would be allocated. The reality, in the big scheme of things for most Schedule C type businesses, it is six of one; half dozen of the other - in my humble opinion.

I disagree. That is a common practice and I have never heard of any IRS inquiries because of it. Why waste time and money dealing with a CP 2000, and not to mention a possible coronary arrest when you client sees that IRS letter in the mail. It's better to grab the bull by the horns and throw him out of the corral now.