Leaderboard

Well, I have a new client, who moved and began renting her residence 2017. We did a lot of back and forth and waiting on answers as she had no idea what I needed as sometimes happens here. (Who am I kidding? It happens every day here.) Anyway, I somehow gave her the Tuition and Fees Deduction instead of the Lifetime Learning Credit for her son's college expenses. Her son picked up her return to take to her and she was to review it, sign the 8879, and pay me. She texted me last night and asked if it was ok if she let her brother in law look at it. Well, my first impulse was to be angry. You know. because I am Super Tax Pro and everything. I somehow had enough sense not to respond. I was up all night worrying about this and realized something was wrong, and that she should have had the Lifetime Learning Credit on there. I got here this morning and discovered I had not entered the address of the University. I explained the error to her and apologized this morning. She was very gracious, but I am so embarrassed. Not as embarrassed as I would be if I had responded to her text last night in anger. So, there's my confession of dropping the ball royally. And my unsolicited advice to everybody is don't respond to people when you are livid. I will say that till the cows freeze over. And I really wish it was impossible to create the e-file without the address of the University on there. Just saying.

That is so true. Some of my best ideas have arisen after thinking about a difficult situation for several days, after I have calmed down .

There always seems to be that one missing piece of information that prevents you from completing the return and allowing you to feel some sense of accomplishment for the day!!!

Yes

12 hours? I would be happy with half that much straight through. But then again, I am healthy as a horse. Hope you get to feeling better soon! I am so looking forward to my Easter nap!!! Just two short weeks from tomorrow! Yeeaaaaa!!!

OMFG! Isn't that the truth... Give me the freaking childcare providers info! Someone just texted me... Oh, I have a 1099-C for a credit card, do you need that? And I paid it off as well...

This week was a killer for me, too. I kept thinking: Wait, there's always a March lull. What is going on here?? I had the client whose co-workers were deducting the difference between the per diem for lodging that the employer COULD have reimbursed them and the actual hotel bills that the employer paid directly to the hotel. The employees had no expense at all. It is hard to prove a negative, and I always try to back up everything I say with an article or the form instructions. I did print Instructions to 2106, but you know about how much that means to people wanting to go for gold on Form 2106. I finally said, "I may or may not have one of your co-workers who came to me in 2016 after having his @$$ handed to him in a audit of 2015." That was tacky, but effective.

Egg? I had scrambled eggs for brains yesterday. Lack of sleep, husband sharing his man-cold (tyvm, not!), nyquil and daytime cold medicine, and feeling lightheaded, I wasn't making much sense of anything. I reread an email that I sent to a client yesterday and I repeated myself in it. After sleeping for 12 hours, I am marginally functional again.

Math. I was laying awake and realized 25% of 4,000 was less than 20% of 10,000. I couldn't remember the limits and all, but I knew her marginal tax bracket was no more than 25%.

We all make mistakes. It happens. Wipe the egg off. What made you determine the LLC should have been taken over the Tuition & Fees?

Nope. My new policy is $500 ;).

That describes most of my client's returns this year. Yesterday I called one for missing stock basis and he wanted to set up an appointment for me to connect to his computer via Skype so that I could watch on his screen while he searched for his information. No way.

You mean to watch with Ms."Cheri"; not to cook?

Yes, and I can do that well enough without anyone's help!

They really come up with some incredibly creative ways to try to WASTE our TIME, don't they?

Thanks Judy and yes I did have a typo in the OP. I did enter it as a capital loss on Sch D. I guess for some reason I had to get my head wrapped around this. Once I did, it made perfect sense. It is just one of those things when you have been working too many hours and the brain begins to get clogged. But... thanks to all who gave input here.

I know, that term is confusing. It is what the NY taxable amount would be for gross income less standard or itemized deductions and any dependent deductions which is used to arrive at the base tax used to apply the allocation %. I do about 6 of these a year and have to think about it each time.

Once they die it becomes an Irrevocable trust and you need to apply for an EIN number. Everything after the death is reported on a trust return.

I think you misunderstand my clients.

If you pay me $x, we can eliminate all those expensive profits you hate.

Long time client was next in the queue, so I pick up her 'bag of bits' this morning, 16 March, and start going through it. Inside, I find 1099s (box 7) and a list of expenses that say 'S-Corp'. Hmmmm. Me: "What is this 1099 income and this S-corp"? Client: "I started that because then you don't have to pay tax on all the income; only on what is reasonable. Oh, and you can deduct your expenses." Me: "S-Corp tax returns were due yesterday." Client: "Oh, I don't want a different tax return. You can just put it on my 'regular' return." I'm so glad to have competent, well-informed, forward-thinking clients!

I used to say that of all the hair stylists I've ever been to, none ever offered me tax advice but most would ask for it. Eventually I came to realize that most of them already knew the answer and they were probably just testing me to satisfy themselves that I really knew what I was talking about.

Hair dresser and mechanic. They share space and offer discounted advice - 2 for the price of 1 1/2.

Yeah, my proud new client set up a C-Corp all by himself and told three different taxing agencies three different names for it. And I can see that he's paid everything from his personal account. Me: Why did you want to incorporate? He: I can't get sued. And I can also have the Corporation buy a vehicle and write it off. Me: Do tell. Then the seminar where I was pretty unsympathetic and a little mean. I think I said "if you're gonna be in business you need to act like it" more than once. I had no interest in him being my client. Well, ship, his wife said, "Thank you. We are in the right place. Tell us what to do." Ship.

He deserves everything that's coming his way! Man, oh man. And I get mad at my clients for taking money out of retirement accounts without asking me the tax implications first. Who was his accomplice? He doesn't sound smart enough to form a corporation and elect S status. Ask him for the 2553! And tell him you need the corporations bank statements for the year so you can put it in QuickBooks. make his bill thousands of dollars more than last year, then if he leaves, you've actually gained.

Want to trade for my German and Aussie clients?

Glad you are feeling a bit better today, Judy!

Yes, it is a capital loss that is on Sch D. Holding period goes back to that of the original security. This usually results from a stock split or spin off where x number of shares are issued to existing shareholders for every existing share held, and a portion of the existing company's basis is assigned to the new company. Then, the shares that are issued for the new company are in whole numbers with the fractional share portion being paid in cash instead of issuing the fractional share. Example - person holds 1390.313 shs of company A that has a spin off of a division into company B and issues 1 sh of B for every 4 shares of A that is held. The spin off results in the person being due 347.57825 shs, but the person will receive only whole shares of 347 and cash in lieu of the fractional shares of .57825. The effect on the investor's tax return is like he received all of the shares and then sold the fractional ones back to the company in exchange for the cash. I don't know if you have a typo in the basis of 34054 (?) but this should be reported on D/8949 as: Proceeds $2.19, Basis $34.54, Cap Loss $32.35

I had one of those EDU problems this year too. Took me some time to realize I needed the address of the college because there was no error or yellow warning. Couldn't figure out why program was not allowing the LLC. Luckily I eventually found it because I do need the sleep.

The amount of income taxed by other jurisdiction should be the 81266 because that is the amount of income from NY that is taxed by NY, hence the credit for taxes paid is 4491. The 91727 is the divisor because it is the federal gross income used to arrive at the allocation of NY income tax. So, .886 Allocation % X 5069 Base tax = 4491. The number you should be seeing on the pervious page column of NYS income line 31 should be the 81266. I hope this is clearer than mud.

If the foreign cash gift is under $100K, there is no reporting. Over $100K, file form 3520. As for the condo, as long as she is the owner and not a foreign corp, only financial assets have to be reported. Of course if she starts receiving rental income, that would have to be reported. Be sure to ask if they have any foreign bank accounts that had a value of over $10K any time during the year. The penalties are steep for not reporting. https://www.irs.gov/businesses/corporations/basic-questions-and-answers-on-form-8938#CashQ2

For K-1s to people who aren't my clients, I print out page 2 with the codes. From there, they're on their own.

Out of pocket expenses for charity just get listed like any other donation.

Easiest thing (and safest) is to treat EACH item on it's own. Does NOT matter if they co-mingle or barter, etc.. Look at each as its own individual occurence (for person) and things get a lot simpler. Take the dynamics and inter-play out and then the picture can become clearer. Maybe not easier as they are still a lot of parts --- but much easier to look at and plan and tax individually. Of course, I am also known to be simple-minded, so use idea at your own discretion. ALSO, life might be boring except for things like this. ///If it happens, God let it and God does not allow more than we can handle (whether we think we can handle it or not -- GOD knows we can).

That's one of the many benefits of using email/text communications as the primary means of communicating with clients. Avoids wasted time talking on the phone or sitting in your office After a many-years-long effort, I'm down to maybe a dozen clients who don't use email or text as their primary means of communication. To be honest, I'd get rid of them tomorrow if they weren't special cases (good friends, charitable cases, etc).

An appeal was filed Feb 2018. The stay for the October ruling lasts until June 2018.

Was not following, but the first article talked about the ruling being based on preferential treatment. Seems to be an extension of the Oregon ruling where the amount is included for UI purposes, to avoid discrimination. If the WI case holds, coupled with the OR ruling, it seems like HA (not actual parsonage) will go away. Had not thought about it in the way the two cases did, but I cannot argue their arguments either. In locales where property does not lose value, the bene is a "triple-dip" win for the clergy person who has their own property. Tax free money, deductible interest on the loan they pay for with tax free income, and appreciation on (or at least use of) the property gained with tax free money.

Hmmm! Sounds like a theme for a comedy movie.

One of my reasons for using email (I agree with yours re too much time on phone and liking the hard copy) is that I work late into the night when I have fewer interruptions from ringing phones and hubby barging into my home office, so I can send emails full of questions before I go to bed and frequently have answers by the time I get up.

There are certain times I insist on recording phone calls as well... if not acceptable to the other party, then the phone call ends.

If we an lump, then why don't we just "lump" them all on to the Schedule A and get rid of the cursed 8283. To steal a phrase from Schirallicpa, "Grumble, Grumble"!

This is the same guy that gave the attorney $17000 for the estate and complained about my $1000 bill. Now he wants free advice. grumble....mumble...

wow - I won't complain about my PA/Canadians anymore!

How about "Should I be billing your sister or you for this time?"

Well, if you put it that way, no thank you. Honestly, I got lost just trying to read your post! (You will notice there was no helpful comment from me.)

Catherine I don't think it would be a 481(a) adjustment on form 3115 which allows the taxpayer to switch from an impermissible method of depreciation to a permissible method. That would involve changing to a correct method (such as straight line); changing to a correct convention; or changing to a correct recovery period (such as for property that was never placed in service). In the case of a rental that had never been depreciated, you are changing from an incorrect recovery period of zero years to a correct period of 27.5 years. In the case of property that was undervalued you aren't changing from a impermissible method to a permissible method of depreciation. I don't know of any other section of form 3115 where that would fit in.

That's why I posted the statement in its simplest form. Whenever an incorrect answer is posted, someone rings in with a correction. That happens on other forums as well, but the tone and tenor of the correction tends to be more civil over here. There have been a few times when the discussion went off the rails & got combative, but the general nature of the conversation here is collaborative and supportive.

Yes. Yes it is. Jesus made a whip. He had a premeditated fit. For a church group. Yep. You go, girl.

But none of us will ever complain about OUR @RitaB!

I could complain about RITA all day, and also the way ATX messed up the form to make it efileable, but I guess I should work on another tax return instead.