taxxcpa

I have a client who owns an S-Corp that he is about to sell. There are all kinds of complications. Gain due to recaptured depreciation cannot be reported on the installment method. It is reported in the year of sale even if no installment payments have been received.

There could be some depreciation not subject to tax as ordinary income--if the FMV of the asset is less than the accumulated depreciation. Older assets aren't likely to be affected, but newer ones could be.

For real estate,

Sec 1250 Property: Recapture on the depreciation you could have claimed using SL depreciation is taxed at 25%. Recapture of depreciation in excess of this is taxed at 15%. (The Tax book, page 6-14).

Determining what is capital gain and what is ordinary income is a difficult thing to do.

My software has a choice in the Form 8829 to designate where it will flow:

C, F, 2106 or K-1(partnership)

Never have had any problems with the flow-through. If it is a 2106, it then flows to Schedule A.

One client forgot to tell me she had a baby and I had to amend the return to claim the new dependent.

Very few people pay me in cash. I never deposit it since I can always use it when buying something.

The expense for meals would need to be 50% of the cost.

The numbering system started with the 00's in the northeast, then they were assigned moving south and west with a little ziging and zaging along the way.

One year a newly widowed lady whose husband had always handled the family financial maters came in. I looked up from the material I was reading and to my astonishment there she came lugging a small suitcase. About the time she reached my desk the latch on the suitcase released and my office floor was covered by every type of bill known to human kind. The fact she did not return the next year was a relief.

Once I'd just left Houston Pipeline's office and the fastener on my brief case came loose and everything spilled out.

It made me think of a guy I once worked with who took three fifths of whiskey in his briefcase on out-of-town audits, so I remarked, "It's a good thing I didn't have a bottle of whiskey in there." My two assistants got a laugh out of that and suggested that you should always buy whiskey in rectangular shaped bottles.

It looks like the IRS has succeeded in making a lot of tax preparers paranoid.

You are guilty until proven innocent.

With Drake you can e-file all income tax forms, personal or business; you can also e-file 940, 941, 1099 and W-2 forms--all for one price.

Tax Act would be my second choice. I used it several years ago as a supplement to ATX when ATX would not automatically calculate the loss carry-forward and reduce taxable income for K-1s when they turned profitable.

“Having a strong system of quality control for tax return preparation and continuing professional education is in part what differentiates a CPA firm from H&R Block and other non-CPA firms. The taxpayer is ultimately responsible for what is on his or her income tax return.

The taxpayer should be responsible for providing correct information to the tax preparer. The preparer should be required to take some kind of test and continuing education so that the client can feel assured that the preparer understands how to do a tax return.

A preparer should lose his right to prepare tax returns if he enters unsupported figures not provided by the client, but should NOT, in my opinion, be responsible for verifying that everything the client is telling him is the truth (unless the IRS will provide each tax preparer with a polygraph machine and a skilled operator.)

One problem with giving those refunds so quickly is that, in many cases, the IRS has not received the W-2 and other withholding information from which the refund is based. This permits identity thieves to "borrow" your SSN and file a return showing lots of tax withheld by employers whose EINs the thief has also "borrowed" for his scheme.

This is a growing problem. Something needs to be done,.

I use PDF Factory as my default printer, so I never print out 25-pages I don't want by mistake.

After I print to the PDF, I then, if I want a paper copy, tell it to print to my HP printer.

Is the PO open Monday?

I grew up in IL where we celebrated Lincoln's birthday, even after the combined Lincoln/Washington Presidents' Day started being THE February holiday!

In Texas we used to have a state holiday for Jefferson Davis' birthday and for Robert E. Lee's birthday. When I was a state employee, I got off on those days.

Questions about how Drake works should be posted on the Drake forum where a lot more Drake users can see the question and Drake employees also read the questions and sometimes answer or post a link to an explanation.

I only have one client who comes in the evening. Some come in the morning or afternoon, but most mail or e-mail their returns..

Only two clients stay here while I prepare their returns--which is the worst option.

How much do I charge?

If you have to ask, you can't afford it.

I've only filed one 1040 so far. I had one all ready to go, but got an e-mail telling me that one figure he gave me didn't agree with a 1099 he had just received. I may wait another week before attempting to file any more 1040s. I've e-filed some 1120s, 1120Ss and 1065s, since they don't usually have 1099s or other forms that affect income or expenses.

The IRS has replaced the DCN with the SID. If you look at your 8879s and 9325s, you may find that the form indicates that the number is the SID but is still in DCN format.

Using Drake, the DCN appears on both the 8879 and the 9325. You can go to the EF data base and look the SIDs up one at a time, but there is an easier way. You can go to Reports and create a report under EF and Bank Products. The report can include the client name, Federal SID and State SID. The report can be exported to Excel, and at the end of the tax season or any time in between, you can print the Excel worksheet.

Unless a client asks for the SID, it is not too likely that you will actually need this, but to be on the safe side, I'll print the report after tax season and keep it for a few years.

Hopefully all software companies will provide some means of doing this.

Looks like springtime in Alaska.

I have to use the FIRE system. It is a hassle. You have to enter a TCC, a PIN and a password and all kinds of information which you absolutely must keep written down somewhere and stored in your computer, since you won't remember it all the next year.

So if they pay in the 28% they should have withheld on the contractor's behalf, do you gross up the 1099 to show more income than they actually received and the tax "withheld?" That seems logical...

If you gross it up, wouldn't you have to pay the tax to the IRS, so if you grossed up $1000, using 28%, it would cost you $$1388.89 ($1000 to the contractor and $388.89 to the IRS)?

What's a humble opinion? I don't even know what that means!

In my humble opinion it means that it's what I think, or maybe what I think I think.

Corporate returns can be transmitted Jan 13. I have one ready and will give it a try on the 13th.

BTW, don't try to pronounce it unless you're ready to trill that "rr" forcefully.

Trilling the "rr" and wiggling my ears are two skills that I have that most anglos do not have.