taxxcpa

1040,1120,1120S,1065, Sch A, B, C,D, E. Forms 4562, 2016

Where was the SEC? How about those "independent" auditors? It's caveat emptor uber alles.

In the case of a Schedule C there is a place to show the LLC's EIN, but for Schedule E, there is no place for anything but a SSN. When one of my clients formed an LLC for a rent property, I just showed the whole year on a single schedule E, but in the case of Schedule Cs, I have split the business between one Sch C for the period prior to forming the LLC and another on with the LLC's EIN for the period after the LLC was formed. I split the depreciation based on the number of months between the two Sch Cs. There may be a risk of a lawsuit but it probably won't happen the first year of the LLC's existence. Nevertheless, your point is well taken. Two Schedule E's might have been a wiser course for me to have taken in the situation I described above.

I thought the tax part of the CPA test was the easiest part of the test. I had taken tax courses about 20 years before I took the CPA test, and about the only thing I'd studied about taxes since then was done when I prepared my own return. The main advantage of being a CPA is that in order to pass the CPA test you have to develop a way of looking at things that enable you to understand the rationale of the tax rules as opposed to just memorizing the rules and following them. I've noticed that engineers also seem to be good at dealing with tax rules that would baffle most nonprofessionals. I'm willing to concede that Tom might be able to become a CPA and that it might be of no value to him. But I do not think his insulting comment about CPAs is appropriate any more than making a broad negative generalization about any group of people based on their profession, race, religion or other classification.

It takes something more than "nerve" to become a CPA. The reason accountants do not become CPAs is that they either do not want to do the studying or they do not have the ability to learn what it takes to pass the test. It may take "nerve" to charge an excessive fee. Doctors charge much higher fees than CPAs, so you could make a specious comment that you do not have the "nerve" to be a doctor. In my case, I will freely admit that I do not have the ability to learn what it takes to become a doctor.

It does seem strange that someone would accuse all CPAs of being greedy and unethical money grubbers just because of one CPA firm's billing excess. I could just as easily take the same approach and condemn all unlicensed tax practitioners because some of them fabricate nonexistent dependents and dream up fake deductions to get illegal refunds. You don't usually hear of CPAs doing that sort of thing. I thought guilt by association went out with Joe McCarthy.

I have that problem. Every time a new tax season starts I'm like the aggie that got a job as an elevator operator. He had to be retrained every time he had to change directions.

You can't blame us poor, low-fee CPAs. Some of the larger firms have a bunch of non-CPA clerical people doing the billing and a lot of the grunt work as well as some of the routine accounting work. I picked up a client from one of the biggest local firms because the big firm kept making errors since the CPAs in the firm were working on the big stuff like audits of publicly traded companies.

From the comics: Well fry my hide It hain't human, thass what it hain't. What's good for General Bullmoose is good for the USA Preserved turnips. Hammus Alabamus Wash Tubbs Captain Easy Lulu Belle Pat Ryan Dragon Lady Hot Shot Charlie Roscoe Sweeney Punjab The Asp Fagan you viper Lord Plushbottom Kayo King Guz Ghost who walks

Here is a well-written discussion of the Bailout by Glenn Beck: Glenn Beck: What happened? > October 8, 2008 - 1:47 ET > > Glenn's letter to his sister explaining how we got into this economic crisis... > Yes, another email letter from your crazy brother. You raised a lot of questions in your last email and I am going to try to answer all of them. > > I think all of your questions fall into three areas: (1) how did we get here; (2) what's coming; and (3) what can I do to prepare myself and my family. > > Consider this email as my answer to your first question, "how did we get here?". I'll be sending you 2 more emails answering your other two questions. Since there's a lot of misinformation out there I will document each of the facts in my emails so you know where I pulled the information from and where you can go to read and learn more. > > What you shouldn't do is panic. We'll get through this--don't pull all of your money out of the bank but have enough cash on-hand to meet any possible emergencies. > > First, you've got to get the stock market's ups-and-downs out of your mind. The recent drops and upticks are short-term. Our economic problems are much bigger and deeper. Too many people believe that if the stock market goes up our problems are behind us and that's simply not true. > > Last week the market had big drops and big upswings. In the end, the market ended down more than 800 points and lots of 'experts' were shouting it was a time to buy. I don't see it that way. > > Did you know that just two days after the stock market crashed in October 1929 the market actually gained ground the next two days? The New York Times reported that "the market quickly regained its poise and stability...." Today, Wall Street 'pros' are telling us it's a good time to invest because Warren Buffet is investing. A lot of people were probably using the same argument when the Rockefeller family was buying stocks right after the 1929 crash, what they didn't know was that it would take Wall Street ten more years to see those prices again. > > Our current economic crisis was caused by politicians, both Democrats and Republicans, who perverted the American Dream by treating home ownership as an undeniable right rather than what it really is, a privilege. President Bush aggressively promoted the benefits of home ownership through various policy positions, including a reckless zero down-payment initiative for some homebuyers and praised Fannie Mae and Freddie Mac even after concerns about their accounting standards began to surface. > > Home ownership has always been part of the American Dream. It allows individuals and families to build wealth by having them pay themselves instead of a landlord or rental company and vests people in their communities by grounding them in local schools, stores and government. > > The concept that owning a home was a privilege and not a right began to change in 1992 following a flawed Boston Federal Reserve Board study which allegedly found subtle discrimination in loan and mortgage lending by banks and mortgage lenders. > > Politicians didn't care that the study was full of errors. The study found discrimination took place when five minority applicants were rejected for special low-income loans even though the applicants were rejected because they made too much money to qualify for a low- income loan, not because of their race. The report also classified as 'rejected' the applications of eight minority borrowers even though these borrowers voluntarily withdrew their mortgage applications. The study's sloppiness also went the other way. > > The study reported that a white applicant was approved for a $3,115,000 loan in order to purchase a home valued at $445,000. It was later demonstrated that the actual loan was approved for $311,500, far less than $3 million reported and more importantly, less than the home's purchase price. When these and other errors were corrected no evidence of discrimination existed. > > But politicians didn't care. They used this report as the basis to fix a problem which didn't exist. Leading the charge for change was President Clinton who immediately set-out to rework the Community Reinvestment Act to give federal officials the power to pressure banks to make loans they otherwise considered too risky or uneconomical. > > Traditional lending requirements were labeled 'outdated' and discriminatory. What 'traditional lending requirements' were viewed as 'outdated' and 'discriminatory'? (1) banks were told that a "lack of credit history should not be seen as a negative factor" and that "past credit problems" > should be viewed and considered in light of any "extenuating circumstances" so loans could be extended when they otherwise would have been denied; (2) banks were encouraged to let borrowers without enough money for a down-payment make-up any deficiency with "gifts, grants, or loans from relatives, nonprofit organizations, or municipal agencies" even though banks considered this risky as the home buyer would have little or no equity in the house; (3) banks were also instructed that borrowers who received child support, welfare payments or unemployment benefits could count that as 'income' for borrowing purposes. > > Call me crazy but if you need to count child support money that's intended for your child, or are in such bad economic shape that you're relying on welfare payments to make ends meet or are unemployed, maybe, just maybe, you shouldn't be buying a house. Too bad our politicians and the 'best and brightest' on Wall Street couldn't figure that out! > > Community groups like ACORN, threatened to cry racism if banks didn't increase their loans to subprime borrowers. Banks typically avoided subprime loans as they carried a greater risk of default, but with law on its side, ACORN and other groups intimidated lending institutions into making such loans. > > Banks soon learned, however, that making subprime loans actually could increase their profits without increasing their risk. Once the banks extended a loan to a subprime borrower that loan could then be sold by the bank to Fannie Mae or Freddie Mac, two government sponsored entities charged with making home ownership affordable to all Americans. > > Banks, Wall Street, and mortgage lenders were soon eager to extend mortgages to subprime borrowers because they could make lots of money without carrying any risk. Fannie and Freddie carried all the risk once the original lending agency sold the loan to them. And once Fannie and Freddie bought the loan this freed up the banks to make even more subprime loans. > > So everyone was a winner. The subprime borrower got the money to buy a house. The banks generated mortgages and made a nice profit and Fannie and Freddie executives made tens-of-millions of dollars in salaries and bonuses by hitting their annual goals. > > The problem was that in order to keep all of this going lending standards were continually lowered to help the next level of subprime borrowers qualify for mortgages and no one had an incentive to make sure that the new subprime borrowers would actually be capable of making regular mortgage payments. The banks which extended the loans really didn't care because they were just going to sell the loan off to Fannie or Freddie. Fannie and Freddie weren't too concerned because it wasn't their money-they knew that they were insured by the 'full faith and credit' of the federal government (that's government lingo for "you and me"). > > So when federal regulators began to warn the executives at Fannie and Freddie about the increasing risks of non-payment by subprime borrowers the companies did nothing and when the regulators took their concerns to congress their warnings were met with scorn and contempt. The politicians who received the most political contributions from Fannie and Freddie, by pure coincidence, just happened to be their biggest defenders: Chris Dodd (D-$133,900), John Kerry (D-$111,000) and Barack Obama (D-$105,189). > > Representative Barney Frank, who has been a fierce defender of Fannie and Freddie, actually said, while arguing against more regulation, "I want to roll the dice a little bit more in this situation towards subsidized housing.... " It's nice to know that he doesn't mind gambling with our money. Senator Chris Dodd, in praising Fannie and Freddie said, "I, just briefly will say, Mr. Chairman, obviously, like most of us here, this is one of the great success stories of all time. > "While Senator Charles Schumer said, "And my worry is that we're using the recent safety and soundness concerns, particularly with Freddie, and with a poor regulator, as a straw man to curtail Fannie and Freddie's mission." > > Barack Obama has received more money from Fannie and Freddie than any other senator, with the exception of Senator Dodd, in the last four years. Before entering the senate, Obama filed a class-action lawsuit against Citibank, alleging that the bank was red-lining, or not doing enough lending in certain areas. That lawsuit was eventually settled. Arguably, Barack Obama helped cause the problem he now wants to fix. > > The Federal Reserve Board was doing its part by throwing huge piles of cash at would-be home buyers by keeping interest rates too low. With low interest rates speculators began to look at houses as business opportunities, while others began to look at their homes as a giant piggy bank rather than a place where you actually lived and raised a family. Alan Greenspan encouraged this type of behavior and proudly said, "American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgages..." President Bush, responding to September 11th unwisely encouraged us to "go shopping" rather than hunker down financially and contribute to the War on Terror in other ways (can you say home equity loans?). > > The SEC also shares in the blame. It failed to do its job (failed to adequately regulate mortgage brokers, the credit rating companies, and naked short-sellers), acted only after the markets froze-up (finally addressed mark-to-market rules) and refused to examine how the credit-default-swap market could grow from $919 billion in 2001 to over $54 trillion by 2008 (which allowed companies to make wild financial bets with the false confidence that 'insurance' would be there if the deal went south). > > So what happened? Home-ownership rates which had been relatively constant for 25 years began a 10 year upward climb beginning in 1995, around the same time that government began its push and pressure for banks to make more subprime loans. The politicians, banks, lenders and Wall Streeters were thrilled because they were all making gobs of money. > > Today we are all paying the price for the decisions made long ago. I have spoken to people involved at the highest levels and they now are all saying the same thing, "it is worse than anyone knows" and "worse than I even thought." Political and business leaders who I respect have told me that the economy is on the edge of an abyss. > > The bailout is an outrage and is designed only to buy time for the politicians. It will delay the real hard times from hitting until after the November elections. Not one politician has said that this bailout legislation will put us on a better financial footing or that our economic problems will be put behind us. In fact, we'll be worse off because our politicians, even in this crisis, can't stop themselves from spending. This bill includes an extension of the rum tax benefits for Puerto Rico and the US Virgin Islands ($192 million), tax benefits for companies which manufacture wooden arrows for kids ($6 million), car racing tracks ($128 million), a provision which forces insurance companies to treat mental health problems like physical problems ($3.8 billion) and many, many more. > > International markets don't offer any better alternative. Germany, England, the Netherlands, and Russia have all come out with their own government backed bailout plans. There are now calls for more international regulation (presumably led by the United Nations) and China has taken this opportunity to call for "a diversified currency and financial system and fair and just financial order that is not dependent on the United States." Meanwhile, there is increasing international indications that the dollar will lose its place as the reserve currency of the world. > > The politicians from both political parties continue to lie to us. They promise us better healthcare and more government programs. The only thing either party will be able to deliver is higher, much higher, taxes as the debt swells and government revenues fall. The same politicians remain silent, while capitalism, which brought us the highest standard of living in the world, is increasingly attacked and discredited by its enemies. > > But it's not capitalism which has been discredited by our current crisis, it's greed that has been shown to be at the root of our present economic uncertainty, and greed is unfortunately a universal human trait and has demonstrated its reach in socialism, fascism, communism and capitalism. The greed of Wall Street is nothing compared to the greed of our politicians who have continued to expand their power and influence at the expense of their country. > > Our children and grandchildren will ultimately pay the price for their failure to act prudently and in the best interest of our country because they will be the ones saddled with mountains of debt and diminished standard of living. > > I hope that this summary gives you a better idea of how the people who caused this fire are the same ones who are now telling us that they know best how to put it out and a reason not to believe their current promises. > > We have faced tough times before. We fought the Nazis in World War II, defeated communism in the Cold War and Americans fought each other to keep our country together in our own Civil War. These tough times require us to educate ourselves and help others understand what has brought us to this point and the grave consequences of what will happen if we let this continue-that is our fight. > > In my next email letter I will answer the other question you asked, "what's coming?" > , I know you will always consider me your crazy brother but please pass this message on to all of your friends. There are too many rumors circulating and I want to put the facts out there. This isn't about slamming the Democrats or Republicans--this is about getting the truth out to as many people as possible. The more people we can wake-up the more people we will have restoring the hope, promise and opportunity of our great country. Please pass this on. > > Glenn > >

Q. What is the first thing that John McCain wants to change once he becomes President? A: His prenuptial agreement. Q: If Jackson is on the 20 dollar bill, Washington is on the 1 dollar bill, then what is Obama going to be on? A: The Food Stamp

PUN INTENDED 1. Two vultures board an airplane, each carrying two dead raccoons. The stewardess looks at them and says, "I'm sorry, gentlemen, only one carrion allowed per passenger." 2. Did you hear that NASA recently put a bunch of Holsteins into low earth orbit? They called it the herd shot 'round the world. 3. Two boll weevils grew up in South Carolina. One went to Hollywood and became a famous actor. The other stayed behind in the cotton fields and never amounted to much. The second one, naturally, became known as the lesser of two weevils. 4. Two Eskimos sitting in a kayak were chilly, but when they lit a fire in the craft it sank, proving once again that you can't have your kayak and heat it, too. 5. A three legged dog walks into a saloon in the Old West. He slides up to the bar and announces: "I'm looking for the man who shot my paw." 6. Did you hear about the Buddhist who refused Novocain during a root canal? He wanted to transcend dental medication. 7. A group of chess enthusiasts checked into a hotel and were standing in the lobby discussing their recent tournament victories. After about an hour, the manager came out of the office and asked them to disperse. "But why?" they asked, as they moved off. "Because," he said, "I can't stand chess nuts boasting in an open foyer." 8. A woman has twins, and gives them up for adoption. One of them goes to a family in Egypt and is named "Amal." The other goes to a family in Spain; they name him "Juan." Years later, Juan sends a picture of himself to his birth mother. Upon receiving the picture, she tells her husband that she wishes she also had a picture of Amal. Her husband responds, "They're twins! If you've seen Juan, you've seen Amal." 9. These friars were behind on their belfry payments, so they opened up a small florist shop to raise funds. Since everyone liked to buy flowers from the men of God, a rival florist across town thought the competition was unfair. He asked the good fathers to close down, but they would not. He went back and begged the friars to close. They ignored him. So, the rival florist hired Hugh MacTaggart, the roughest and most vicious thug in town to "persuade" them to close. Hugh beat up the friars and trashed their store, saying he'd be back if they didn't close up shop. Terrified, they did so, thereby proving that: Hugh, and only Hugh, can prevent florist friars. 10. And finally, there was a man who sent 10 different puns to friends, in the hope that at least one of the puns would make them laugh. Unfortunately, no pun in ten did. **************** DIFFICULT WORDS TO SAY WHEN YOU ARE DRUNK Specificity Indubitably

What's the definition of a good tax accountant? Someone who has a loophole named after him.

A businessman was interviewing applicants for the position of Divisional Manager. He devised a simple test to select the most suitable person for the job. He asked each applicant the question, "What is two and two"? The first interviewee was a journalist. His answer was "twenty-two." The second applicant was an engineer. He pulled out a calculator and showed the answer to be between 3.999999 and 4.000001. The next person was a lawyer. He stated that in the case of Jenkins v. Comm'r of Stamp Duties (Qld), two and two was proven to be four. The last applicant was an accountant. The business man asked him, "How much is two and two?" The accountant got up from his chair, went over to the door, closed it then came back and sat down. He leaned across the desk and said in a low voice, "How much do you want it to be?" He got the job.

That four-digit number must be 1913, the year the income tax law was passed.

Your question may need clarifying. If his brother is making payments on the house, then there is no apparent problem in relationship to the house. If your client is living in a condo and quits making the mortgage payments on the condo, then he will face foreclosure. If the brother keeps paying on the house, it would not affect the other property in any way that I know of.

For a CPA the rule is that the accountant's workpapers are his own but the materials furnished by the client must be returned whether you were paid or not. However, if you get a subpoena, you may be compelled to furnish any records you prepared. You would need to consult a lawyer to make sure.

I would think twice about reporting all the capital gains at once. Even if the tax rate increases, the burden would be spread over the years vs all at once. There is a time value of money and it might be a good idea to work out a worst-case scenario with some actuarial assumptions about interest rates, present values and future values and see if saving tax today is better than the compound interest that would be attained by holding off. Since the actual calculations would be extremely tedious, I would use a 'quick and dirty' estimate.

You could get stuck with tax on the income he reported that he paid you. Contact the IRS.

This can cost more than the net settlement since the deduction would be reduced by 2% of AGI but the gross amount would be considered income. It might not be enough to use itemized deductions instead of the standard deduction. The big winner is the lawyer who gets his fee regardless of whether it helps the client or not.

I tried TaxSlayer several years ago. It was basically an MS DOS program and did not handle more complicated returns. However, it may have improved a lot since then. I felt the same way about Drake several years, but it has improved dramatically.

When I switched from Intuit to ATX, I bought both since I wasn't sure ATX would do the job. When I found it worked OK, I discontinued the Intuit program. When I switched to Drake, I tried the demo first to get the hang of it.

Once you are signed up for Drake you should be able to get into the forum. I did something wrong when I first tried, but after I called them or emailed them about it, they promptly contacted me and got me on the forum. If you email them a question that isn't something they can answer by emal, they call you and walk you through the process. Updates are a lot easier than with ATX and efiling worked flawlessley for me. The only difficulty you may have is getting used to the input which is on several different screens. I prepared a 'cheat sheet' to guide me, and posted it under the files section of TaxProExchange. You may want to refer to it. I will probably need to update it when the 2008 version of Drake comes out. The conversion from ATX works pretty good, but some things won't convert, so you need to check. When you convert, you will have to enter each client's social security number to bring them into Drake. That was the biggest hassle. But once you establish the client, you can access them from the CSM (Client Status Mgr) which shows them by name, alphabetically. The client write-up is something you can use to e-file 1099s, W-2s, and to prepare 941s and 940s. One complaint I have is that you cannot print a black-and-white 1096--which I would not mail to the IRS since I efile them. You can also use it for write-up work, but I haven't learned how to do that since I use Peachtree.

I forgot to e-file one but the client called asking "Where's my refund?" I thought it had been filed, but when I checked to see when I had filed it, I discovered I hadn't filed it yet. Fortunately he had not waited too long to call me so the delay wasn't too bad. What scred me was that it could have been several months if he had not called.

If she only made $135,000 why would she owe tens of thousands in tax?