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Isn't this a common time to use Form 3115?

I no longer have any clients who come in, sit down, and start handing me their documents one piece at a time. ("Here's my W-2, here's my wife's W-2, here's my mortgage statement, can I deduct what I paid for these Girl Scout cookies?, etc"). Sometimes I'd want to say "Wow! A W-2 form! Thanks for telling me what that is." I was generally thinking along the lines of "Give me that whole stack and shut up for a minute!" Anyhow, the most fun would come when they pulled out their brokerage statement. I liked to yank out the boilerplate pages and quickly cram them in the paper shredder before the client could say anything. As it would whine and grind away, the look on their face was priceless. But then, maybe we just discovered why I don't have to deal with those folks any more.

PITA people, people who dole out missing information one at a time over several weeks, and people who whine, ALL see their bills gets hiked. If they go away permanently, that's fine with us!

I agree that normally Sch E filers do not have a home office or the deduction. That's why the data won't flow. It also won't flow for Sch F filers or unreimbursed partners. However, in Pub 587, the instructions address using a worksheet (instead of Form 8829) for farmers and unreimbursed partners. If the rentals are a trade or business, I think you'd have an argument for using the worksheet and taking the deduction. (I'd just use 8829 and enter the results on Sch E manually, we've established that it won't flow. keep the 8829 in the file. give taxpayer a copy). There was a landlord who successfully defended the deduction in tax court. It wasn't me, and I've never entered that deduction for a landlord.

The couple has to take those contributions out right now. If they do so before the filing deadline it will be treated as if they never contributed. I don't know what the software is doing, but sometimes software is quirky when trying to handle something that is not possible (like contributing to an IRA with no earned income).

Its an election. It is not mandatory. She started it, but did not finish it. Pay the tax. Rich

However , I have entered UPE on the schedule E page 2 worksheet for an LLC partner when the only office for the LLC was the home office for one of the partners.

Tom has it right. The software (and possibly the IRS will agree) that the $1K contributed is the first $1K of the $100K distributed. Since the distribution was greater than the contribution, it will stand. HOWEVER, the clients need to be scolded and told "BAD client! No biscuit!" with an admonishment not to do this again.

Q> "Why is the accounting firm 3 states away late?" A> "Because they don't have it done yet."

I always quote a high cost in April because my guess is they are going to be a PIA to work with and they . Prices are always higher if you deliver in April. Grouchy clients are my new pet peeve. Client was waiting multiple K-1s and he brought me a gift certificate when he finally delivered yesterday because he felt bad. Next set of clients are still waiting and somehow the fact their accounting firm 3 states away are late became my fault and I needed to explain why they were late.

We rarely take new clients and the ones we do are referrals from good clients or others we don't want to disappoint. However, when a potential new client asks how much it will cost in the initial phone call, we typically say we aren't taking new clients. If price is the first thing on their mind, we suspect that will not appreciate the service we provide and the relationship will not be a good one. This week I have had to tell a number of clients that they owe big time, that I tried this and that but nothing helped. Every one thanked me for the effort I put in. Those are the clients we want. I had a client today who wasted so much of my time that I kept silently going into his bill and raising it. By the time he left it was up almost $100. He offered to pay even though his return is not yet completed. I suspect he fears losing me more than I fear losing him. I have heard many practitioners say that they purged their client lists of problem clients and enjoyed their jobs more while their income didn't suffer.

You can't NOT report income just because you got it in cash and did not get a form for it, although I have had people tell me that they can. So i don't generally get suspicious just for that reason. Now if that was the exact amount needed to get them in the sweet spot for EIC, I would definitely want to ask more questions. Or I had a potential client this year start to hand me his papers and tell me how much he wanted his income to be total since he was applying for a loan. I handed the papers back and told him that was not how we did returns here.

I don't have to imagine - a few years ago the CEO of a local bank (people seek him out for financial advice) said to me: CEO: "Why am I paying so much tax (many K's +) this year when my associates tell me they pay practically nothing for the same?" BB: "Well, see; when you make the kind of money you're knocking down and you have those side businesses that are dragging in a ton, then you're gonna owe lots of tax. Too, everybody's different - I doubt your pals' earnings are the same as yours. More importantly though, last time you personally sent off all four estimates. This time you sent none. So, it's pretty simple arithmetic." That was a little too plainly spoken for the fiscal analyst. The meeting ended abruptly and I haven't seen him since.

I am of two minds about this subject. As a preparer I know how hard it is to quote a fair and reasonable price without actually doing the work so that I know what is involved. And if I have done the work, I want to be paid commensurate with my effort. And yet as a consumer, I hate to agree to pay for services when I don't have any idea of what it is going to cost. My preferred method earlier in the year is to tell them that if they bring me last year's return I can tell them what I would have charged to prepare that. Sometimes I will quote a price range, emphasizing that this is based on the return only involving blah, blah, blah. But I don't have a good solution that I am happy with, and I probably lose business because I have gotten short changed so often that I tend to quote high now, figuring that they won't complain if it is cheaper than expected but boy do they if it is higher.

Tell them getting good tax advice is like buying oats. For a reasonable fee, I can provide you with good-quality oats. But if price is your only consideration, you may wind up with oats that have already been through the horse.

Taxpayer, a total enabler and pet peeve but story for another time, has 2 adult sons still living at home, ages 28 and 30. One makes enough to not be a qualifying relative, is back to college, NOT contributing to the household finances, NOT any toward support of the other son. No questions on this return. The 2nd son should be her qualifying relative. I looked up fair rental of home for support worksheet, and the mom meets the support test by a long shot based on this alone without considering any other expenses she paid. This deadbeat son had $1,500 of gross income from wages and unemployment, no other sources of income or support. Q1 - MUST mom claim the son? She didn't keep any documentation or receipts for the support. I know she could look up electric and utility bill payments and print those if needed. Q2 - I *think* is will create a problem with son's Medicaid coverage, and it should! Delaware allowed Medicaid expansion & son is over 19. I think this means that if she claims him as a dependent, then her income is what Medicaid looks at as the "household income." Is this correct? Q3 - Deadbeat son is required to file based on gross income. If she doesn't claim this son, his return would show a higher refund, but if I answer the 8867 question "can someone else claim this person as a dependent", then it knocks him out of a whopping $29 of EIC. I'm not worried about that, but am about the ramifications of indicating that he CAN potentially be claimed by mom but isn't. What can o' worms does this open? Will he still get the notice that he might be eligible for the EIC, or the Medicaid issue, or something else? Apologies for the long post, and if you read this far then I appreciate your patience! Hate, hate, hate these returns.

Been in that situation Gail!

Yep, recently did one from HR Block screw up. They also overlooked to file an initial short year and accrual accounting which would have offset income with legal expenses.

Same.

Since the rental days are less than 15 , the rent isn't reportable, The 1099 may trigger a letter from the IRS, which will have to be answered.

Sounds like the software is trying to correct the situation for the TP. If TP contributed 1k, and withdrew 100k, the software is treating the first 1k as the return of the unallowed contribution. Tom Modesto, CA

Accept it. I've seen plenty non-PTP K1 investments before. Or you could ask google.

Normally, rental property doesn't get a home office deduction.

Just had a situation similar. Parents specifically said they would not be claiming son so Medicaid in California would cover him. It was one of those situations were they thought they were getting something for nothing but ended up losing out on a big education credit. I would file the deadbeat son as if he could be claimed by someone else and just don't claim him on the mom's return. The rule is even if no one does claim him, if he could be claimed he cannot claim self.

I rolled the return over again and recreated it. The efile was created before the newest version of ATX was received. Oddly the reject notice did not so advise. His son's return created the same day was sent off this am and the reject notice advised I needed to submit it using the updated version. So it seems I have s o l v e d the problem.

If they are retired and have no earned income W-2 or self-employment how do they qualify to make an IRA contribution ? How does a contribution to the account reduce the account balance ? Maybe I am misreading the post.

Just file it. The IRS doesn't get around to matching until November at the earliest. I just checked wage transcripts the other day and they were still blank. The shutdown really screwed everything up.

Okay, figured it out! First Step - you have to adjust the Other additions And other reductions worksheet to eliminated the timing differences. That makes Column A correct (i.e. cash basis AAA). Then you can make entries in the adjustment column to get accrual RE to balance. It was that first step that I was missing. Thanks Abby!

Mom has coverage through her employer and I have no idea how she/they answered the questions for his coverage. It's one of the items on my list to discuss with her.

M-2 has a worksheet with an adjustments column. Just use that.

I think the mom includes the son in her "household" for ACA whether or not she claims his dependency. But, I have few marketplace/Medicaid clients, so that's just something stuck in the back of my head of somewhere...

I've also used zero as the basis. With that said, here is an article that offers the basis as the IPO value: http://www.costbasis.com/stocks/demutualizationshares.html

and long term since the property was inherited

Whoever took vacation with kids left the other parent behind in a QUIET house! Not sure that doesn't qualify for a "win" all by itself, lol.

This is very important. The spouse giving the funds must not touch them. They cannot just take a distribution check, cash it and give the money to the spouse. If they do, they pay tax. They give a copy of the order from the court, the Qualified Domestic Relations Order (QDRO) to their Retirement Fiduciary along with the information on the spouses account. The trustee transfers to the spouse and it is done. Tom Modesto, CA

It's a little different for me because I only take personal referrals. I am confident they have already discussed prices together.

If they ask my price, I absolutely don't quote. I tell them things like "cheaper than tax-in-a-box" or "I'll save you more money than you'll spend on me" or my all time favorite, "my prices are very competitive, but I don't strive to be the cheapest."