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If you put the mortgage interest on 4952 it might be there for a very long time. You can elect to capitalize any of the three classes - interest, taxes or "other carrying charges" on a year by year basis. It is important that you keep track of what you have elected to capitalize, because the whole point of the exercise is to have the capitalized expenses in your basis, when you sell the property. https://www.forbes.com/sites/peterjreilly/2013/05/13/electing-to-capitalize-expenses-can-pay-off-on-sale/#55de7e670f01

It sounds like the TP's intention was for the property to be held as investment, and property doesn't always have to be rented to be considered investment property; it could be because of its potential to appreciate in value. Mortgage interest could be investment interest expense reported on the 4952, other carrying charges may be capitalized (requires an election), and obvious items that are required to be capitalized on any property would, obviously, also be added to basis.

What about SE tax if showing a profit? The right way is the only way.

If your clients report payments on a 1099-MISC, this may not be sufficient proof to satisfy an audit, even though the 1099 was properly filed. If the recipient of the payments did not report that income on their tax return, other proof is needed. This happened in a recent audit to a client of mine who made cash payments to subs. The proof could receipts, or a written statement from the recipient that the money was received.

Uh Boy... I think I took a client that I don't want. The more I look at this, the less I want it. There are many things going on with the 2016 tax return I am reviewing. I'm NOT amending it unless she gets a love letter from the IRS. There are 5 Sch C's, one for each 1099 including a rental income from renting out farm land. Yes, she put it on Sch C. Wait, it gets better. She started a "non-profit" and she is the founder. She receives a "salary." No, it isn't a W2, it is a 1099, Box 3 "other income" for $7,000. Wait, it gets better. In 2016, her net income from all those Sch C's was $-2075.00. Yes, NEGATIVE $2075.00. There were zero wages, zero withholding, zero refund/balance due. Wait, it gets better. Her self-prepared return listed her occupation as "Attorney." But, you probably already knew that, right? All of that is really just annoying. Not earth-shattering by any means. Here's my question: She has a hiking business, sole owner LLC with an EIN tax ID number. She has income from that LLC which is not reported on a 1099, PLUS two 1099s issued to her personal SS number. I believe I can lump all that income into the LLC (on one Sch C) since it's all hiking work. Am I right? The 1099 from the "non-profit" must go on its own Sch C, I believe, because this is executive-type work. Am I right? It is Box 3 income, but it's subject to SE tax since it's her "salary" for working. Did I mention the THREE K1s? ohmygerd.

Dr Abby, the chiropractor... straightening me out.

$^%& I knew this one because I just made the election to capitalize an expense on a return a month ago, and you guys beat me to it. And here's a quarter for the swear jar.

Your fee includes past years which is currently showing all the way to 2002 I believe. The seminar I attended also stated that they were curious how it would work on Windows 10 and so he installed 2002 on his laptop and it works fine. Yes ATX is going to cut us off when we do not renew, not exactly sure of the time frame but I am going to be going online and downloading all the programs and make a backup of my install codes just in case I ever need to get back into their software. Also you will be able to continue to use the software they just will not allow any updating of forms nor e-filing from the program. As far as they are concerned you are no longer a client so they will offer no support.

Agree with cbslee. Plus, ATX will cut you off from its server so those back year returns you'd prepare would be paper-only whereas those prepared in Drake could be e-filed. I think once you get used to Drake you won't want to go back to ATX anyway.

DANRVAN, thank you for the references. Your explanation of the my client's thought is no doubt spot on. I will be discussing this with him in the next two days.

I have been using prior year Drake programs, since my ATX 2016 program will no longer open. Since I did not buy ATX 2017, ATX will not support any of the prior year programs that I purchased.

Oh, it won't be cheap! Yes, someone else is doing the 990. One of the K1s appears to be a law firm and her name is on the title of the firm. My guess is that it is a family business. They are probably setting up all these K1s and they probably set up this "non-profit." Me thinks her 1099 for $7k means it's not really a non-profit at all. It's legalese. The farm rental income will go on Sch E out of my office. They are not performing any actions or services, so it's straight rental income. Since I'm not following another professional, just an "Attorney" DIYer, I'll do it right.

I have to admit that I've always had a preference for live courses, but this year the changes are so immense I've decided to immerse myself in any and all types of courses so I get enough exposure for the new stuff to sink in. Like all of you I'm sure, I've been bombarded recently with offers for unlimited CPEs from groups I've never heard of, and I'm tempted to sign up with at least one. Judy said she likes one in particular but didn't name it. Please tell us! Any specific recommendations for any of these providers?

I get my one on one networking here.