jasdlm

Absolutely beautiful!  Puts everything else into perspective!

53 minutes ago, TAXMAN said:

I am incline to leave price at 5k if property was valued at 1m. I too would think that farm house is worthless. Was appraisal a certified one?

Yes.  Actually appraised for $15,000, but my client's share was $5,000  (and share of the depreciation was $19,000).  No 1065 has ever been filed; sold as 3 joint tenants.

Bart, do you use ATX?  What am I not toggling or clicking that causes the MO estimated payments to calculate with a $0 MO withholding (regardless of what was withheld the previous year).  I forgot to circle back to it, and I sent estimates to a client that were 4 times what needed to be paid!  Client was super kind, and it's my fault for not reviewing the estimated payments for 2022 more carefully, but is there some way to adjust this?  It's happened with MO estimates the entire time I've been using ATX, and I'm usually onto it, but why doesn't it work like the other states?

1 minute ago, Abby Normal said:

Land was never depreciated, so all recapture goes with the building, which only had a 5,000 gain, less prorated selling expenses. This needs to be two separate assets.

Thanks much, Abby.  This is the way I initially recorded it, but then I went back and changed it.  This is a partnership, and the accountant for one of the partners is telling that partner that the full $19k has to be recaptured ... the software, of course, won't calculate this with only a $5,000 gain.  I've been practicing for 20 years, but when another professional takes a totally different approach than I do, it sends me spinning. Google then goes from being my best friend to my worst enemy as research generates answers all across the board.  The later in the season, the more I question myself.

So to confirm, $5,000 recap on this asset.  Depreciation recapture limited to the lesser of the gain or the depreciation previously taken (which has been my understanding in the past, but the other partner's practitioner has been practicing far longer than I have).

Thanks so very much for helping with this.  This shouldn't be this hard.

Farm ground sold for $1,000,000.  Client inherited the farm 40 years ago and depreciated the Farmhouse for $19,000.  Obviously fully depreciated.  Appraisal for sale of property assigned $5,000 to Farmhouse.  Just confirming that I recapture $5,000 against the farmhouse and the remaining $14,000 on the 4797 against the land sale.  Looks weird with depreciation against land, but I think this is how I properly report it.  Do I have this completely mucked up?  Thanks much.

Thank you!  Circling back to 'uncheat' my cheated clients.

I know that housing isn't an eligible AOTC expense, but since housing (w/ all the rules/caveats) is an eligible 529 expense, do you use the housing cost that's eligible under the 529 rules when calculating AQEE and tax-free earnings?  I haven't been, but now I'm questioning whether I'm cheating my clients.  The one I'm working now would have 0 addback and still qualify for maximum AOTC if I include the allowable housing.

Thanks much.

Okay … party at Tom’s or Gail’s!  I live in Kansas, and I’m happy to get in the hosting queue.  I think we should set up a regular event; plan locations in advance.  It will be like the Olympics or March Madness.  Everyone will know it’s XXX weekend, and we can have the locations sorted far in advance.

2 kids getting married?  Would there ever be enough Kleenex or Money for a 2-wedding summer?  Yikes!  Exciting!

Just now, cbslee said:

What you don't believe the Quickbooks ads telling you that you don't need to know accounting or bookkeeping

Accounting for dummies :(.

11 minutes ago, kathyc2 said:

Are you suggesting they use logic? 

As I'm scaling back to retirement, I'm not doing any corp returns other than one who begged me to keep doing hers.  When I was doing them, I insisted on getting a back-up copy of the full books rather than printouts.  Too many times people would do stupid stuff that it was easier for me to look at the books myself than explain to them why I thought something looked off. 

Several years ago I took on someone who on the phone told me their books were impeccable.  Scrolling through I saw that they "plugged" something like 60K to make cash balance.  They were told to come pick up their info and pay me for time I had invested in it.

 

 

 

I agree.  I never work from paper.  Those 'adjust to balance' or 'reconciliation discrepancies' are the absolute worst!  How do people come up with these things?!?

One more thing, and then I'll stop:  Who the heck journals against cash?!?  When did this become a thing?

I'll go make another latte and take a 'nice' pill.  Promise not to come back and post again until I do so.

2 minutes ago, kathyc2 said:

Unless the bookkeeper is older, they have probably never kept books other than computerized.  As a result, they have no idea how the accounts all come together. 

 

I understand (no, I don't understand, but I accept this).  However, it just stands to reason that if you take one tiny look at the balance sheet and see something like, say, negative cash in an amount far higher than the business could ever possibly float or the bank would ever carry, you might dive in for a better look.

Like I said, snark factor is high today.

I try to invite myself to as many cool places as I can.  I might be first in line for a hug if Rita is not pleased with this suggestion ;).

This summer, if Covid is calm?

Hugs for everyone?

I have so many clients this year whose books don't match last year's tax return (which I did).  Many of them have the same 'professional' bookkeeper.  It's driving me crazy.  I'm spending way too much time adjusting the balance sheet to match last year's tax return and figuring out what changed so I can properly account for it.  It is making me very frownie face.  Some of the journal entries I am seeing make me want to reach out to the bookkeeper and ask, 'Have you ever heard of double-entry accounting'?  My snark factor is high today after spending most of last night cleaning up books that I already cleaned up once when prepping the 2020 tax return.

I know, I know ... close/password the books after tax prep ... just doesn't always go well with clients. 

I'm a grouchy pants.  A couple are so bad they just got an email saying 'you're on extension because your books are a hot mess ... get me all your bank statements'.  Hit send on the 7004 and moved on.

Double Frownie Face.

I'm surprised the software let the return efile.  By chance, is the income/asset amount under what is required for filing the balance sheet?

Regardless, how do you feel about the accuracy of the clients books & records?  That's where the real decision likely lies.

2 hours ago, artp said:

Thanks for all the replies.  Sorry I did not acknowledge them earlier, been down with the flu bug.

That is a total bummer.  Feel better!

7 minutes ago, joanmcq said:

Margaret, did you get the return to efile? I just had one reject and it said I had to attach the Sch B and something else and 951A must not be checked. Thing is I did attach the Sch B!  None of the other things mentioned  were applicable. 

I have had multiple rejects for 1116 (even though not caught in error check) for returns with NO carryforward.  It's crazy annoying.

8 minutes ago, joanmcq said:

I do not want to subject this to a paper file right now!!!

I get it.  Only option for efile that I know would be to file with the 2553.  I wouldn't file a C corp extension.  I would probably paper file an S corp extension with proof of mailing before I would file a C corp extension. 

I had this happen for years (literally) on an S-Corp I filed.  I just kept paper filing the return and sending in another copy of the original (signed and dated) S corp election. The client got audited during this time (no change audit), and I even gave a copy of the 2553 to the auditor and  told her what was happening.  She took it and said, 'yes, we're having a lot of trouble with that'.  Never did get changed, and about 5 or 6 years go client closed the S corp and started a new LLC with a new S corp election.  That's how we finally got rid of the problem.  Never heard anything regarding the old S corp.  Eeegads.

Thanks so much!  I wasn't able to see this from the link, so I really appreciate you posting it.  Very helpful.

Hello, again.  One more question (long shot).  I want to run my logic (or lack thereof) by some of you:  If the salaries paid to the shareholders were greater than the guaranteed payments from the partnership (they were) then would it be fair to argue that the guarantee payments paid the salaries (retaining all the same characteristics) and the other patient fees received directly by the S-Corp were what composed the s-corp profits?

Trying to think outside the box but take a defensible, reasonable position.

Thanks for any thoughts.  I might be too caught up in this.

Thank you, Judy!  That's what I was afraid of, unfortunately.  I really appreciate it!

I don't have the partnership agreement, and I don't do the partnership return.   I made a typo in the original post; I apologize.  This year, for some reason, (The S corp has been getting a k1 from the partnership for the entire time I've been doing the return), the income, instead of coming through on line 1 of the K1 from the partnership (return I don't do) to the S corp (return I do), it came through on line 4.  The question is essentially whether I have to pass that income on to the S corp shareholders on line 10H (other income) not eligible for QBI and creating a loss in the S corp.

Sorry to be unclear. 

Just reading my original post.  Should read 'if the guaranteed payments flow through to the shareholders' in number 1.  Sorry.