jasdlm

All the best to you! Happy Birthday.

I'm sorry. I'm afraid I don't know how to post it to the forum (I'm a luddite). I will email it to Terry. Perhaps he knows how to post. Maribeth, if you want to get me your email address, I'm happy to send it to you. DISCLAIMER: It might be overkill for some of you, and some of it pertains to my legal/financial advising practice, so you might want to make changes. Hopefully, it will provide a good basis for getting started.

Terry, I have a boiler-plate confidentiality agreement if you want to have him sign it. It's a bit of indemnification if something does happen. I have one in place with my IT person; all of my backup files are stored on a 'cloud' (or some such thing)at his office.

Client was the recipient of a lottery annuity. He is deceased. W2G is issued to his revocable living trust (obviously now non-revocable), which was the beneficiary for the annuity. (Spouse is principle/income beneficiary of the Trust, and has already withdrawn the majority of the money from the trust, so income is going to flow through to her return, leaving an overpayment in the Trust because of withholding.) Exactly how should I report this on the 1041? Other income? There is Federal and State withholding. It is a substantial amount of money. Thanks in advance.

Calculate the depletion and enter it on line 20b on the Schedule E input form.

Sheesh . . . you are absolutely right, Terry . . . I need to sleep for several hours!

Doesn't it have to be amortized over the life of the loan?

Thanks so much, KC. I really appreciate you taking time to explain this. Thanks also to Danrvan, Maribeth and Windmill. I will report on the 4835 and keep notes for next year. The rent is not crop share, so I will leave it on Schedule E.

Danrvan - would you include the Box 3 1099-PATR amount on the 4835, also? This is the much larger number.

I've put them on the 4835. I'm concerned about the avoidance of SE tax referenced by the link Danrvan posted. Thanks for all the input. Any additional thoughts are certainly welcome.

Thanks, Danrvan. I really appreciate the help and the article posting. Client does not work on the farm; does not even live in the same state. Client really did receive the money for the sale of the grain (i.e. grain was put in Client's name at the COOP, hence the 1099 PATR in client's name). Previous preparer put the entire transaction on Schedule D as a long-term transaction, so favorable treatment. I don't think this was right. However, I think that in 2008 the Coop did not generate a 1099-PATR. I'm not sure what to do now. Thanks!

What do the 'buys' have to do with it? Do you mean cost basis? Do you have the cost basis for the $142,249.84 in sales?

Client received a 1099-PATR with large numbers in both box 1 and box 3. Client is not a farmer. Client's father gifts grain, etc. to client which co-op sells . . . proceeds to client. Question: Since client is not a farmer, how do I show this on the 1040. This is my 1st time doing this client's return. Last year, on schedule D, client shows a large capital transaction with a 0 basis. The description is 'gifted grain' with 'various' in the date acquired/date sold fields. I looked through the backup for the return, and there is no backup for the Schedule D transaction, so I have no idea if there was a 1099-PATR. I am thinking I would put the line 1 amount on schedule B. Can anyone confirm that and/or tell me what to do with the box 3 amount? I will continue to research the issue, but I can't find any good information on reporting this transaction when client is not a farmer. Client does own land (which was gifted some time ago). Client receives rent for the land, which previous preparer has been reporting on Schedule E. I have put the 2009 land rent on Schedule E, also. Thanks in advance.

I agree with Terry. I actually screen print the 2nd page of their 1040 (that shows the routing/bank account number). I make clients initial that it is correct, and I keep it in my file! This forces them to pull out their checkbooks and look again.

Can the TP talk to the bank and get it reopened to receive the deposit?

Client has about $150 in interest on a foreign bank account. I know that I have to file form TD F 90-22.1 to report the balance since it's over $10,000. My question is about reporting the interest. I know that it goes on Schedule B, but is there any way I can efile given that I don't have an FEIN for the foreign bank? This is a new client. He is used to efiling, but has never reported his foreign interest or filed form TD F 90-22.1 before. (Didn't know he was supposed to and no one ever asked him if he had any foreign bank accounts.) Thanks.

Thanks so much to both of you. I thought that I must be missing something. I appreciate your responses.

Client is sole shareholder and employee of S-Corp. Has W2 (as appropriate). Office is in client's home. This is my first year to prepare both returns. On schedule E, there is the standard flow through from the S-corp. Item 2, however, just says 'unreimbursed expenses' and is listed as a loss (in an amount I can't come up with give then backup that is attached to the return). There is also a depreciation schedule. The item depreciated says 'business use of home', and the TP residence is listed. I am guessing that the depreciation is part of the amount on schedule E, unreimbursed expenses, that I can't calculate. All expenses for the S-corp were taken on the S-Corp return. I can't figure out what these unreimbursed expenses would be, or why they wouldn't need to go on a 2106 and Schedule A, subject to the 2% haircut. There is no 8829 or 2106. Someone with more experience please walk me through this. I want to deduct everything I can for the client, but I'm not following the previous preparer's method very well. I understand that partners (1065) can take unreimbursed expenses against partnership income. Is this similar? What would be the standard for proving they are shareholder expenses rather than employee expenses? Thanks!

I didn't take the test, but when I started doing taxes, I bought the Gleim materials to use to get comfortable. They had books and a computer-based system. I liked it. I'd offer you the books, but they are too old to be useful. (2002 ) However, I did like the Gleim product.

I haven't had much experience with audits, so I have to admit that I was surprised that one would start 53 minutes late. In thinking more about it, I don't know why that surprises me. I will certainly know better what to expect last time. The last two audits I went through (where I hired a CPA to sit in because I had so little experience) were in my office, and the auditor was on time. They were quite smooth and both ended well, so I think I got spoiled!

You're right, Jainen. I was just venting. I, of course, advised the client to wait. The good news is that once the audit got started, it lasted only an hour, and seemed to go very well.

Initial meeting at IRS center. Auditor kept my client waiting 53 minutes. Unreal. Client is more patient than I am. I probably would have left her a voicemail (my client left several) and made my exit.

Thanks for posting! I'll ask the clients.

Item in quickbooks is labelled 'Big IP Service' purchased from vendor FS Networks. Is this computer hardware (depreciate) or outside services? I know what an IP address is (sort of), but that's about it. Thanks. I'd really like to finish this 1065 . . . aaargh.

DISCLAIMER: I have never actually worked through one of these on a return . . . my clients have been fortunate. However, here is my understanding. Hopefully others will correct/supplement what I am saying. There are two aspects to this situation. First is the amount of debt cancellation. Subtract the Fair Market Value (as indicated on the form) from the amount of debt. If the debt exceeds FMV, she would report income from cancellation of debt on line 21 as other income if a 1099-C has been issued. However, I think you can wait to see if a 1099-C is issued before worrying about the 982. (i.e. 1099-A, in my understanding, is not equal to debt cancellation, so income does not need to be recognized for debt relief.) Ooops . . . in reading the facts again, the Fair Market Value is larger, so no income in this arena anyway. The second aspect is the deemed sale of the house. Subtract the adjusted basis from the smaller of the FMV or cancelled debt, which in your case is the cancelled debt. This is reported on Form 4797. Hope this is helpful. If I'm not correct, someone will jump on it!