Edward

Currently when you sell a residence in which the OIH deduction has been taken, the entire home (when sold) is treated as a residence for purposes of the home exclusion rules and only the gain from depreciation allowed or allowable after Mar 6, 1997 is taxable. Somewhere I thought I had read that a new change is coming where the sale will consist of 2 separate sales (both business and 121 exclusion) with the entire business percentage being subject to taxes? Can anyone provide a cite for this change? Thanks. Edward

Maybe it depends on whether you are "right or left" handed!!! maybe!!

I plan on using the following format for dealing with such truckers in the future. Any comments would be appreciated. It is rather detailed but should provide needed important info for the truck drivers: a. Opening Odometer: b. Closing Odometer: TOTAL MILES TRAVELED FOR YEAR: c. Number of TIMES returned HOME: d. Number of DAYS in regards to c. above: e. TOTAL vacation days at HOME:

So the computation is fairly simple, like counting TOTAL days away from home PLUS the 3/4 day when departing and when returning as Cathyan states above. The driver I mentioned says he returned home seven times during 2009. Thus we take the total count based on these days THEN reduce by the time he spends at home/vacations and then proceed with the resulting number of days times the 59.00 x the 80%. I suspect the drivers can scan their trip reports and come up with the needed figures in moments? Thus, I was wrong in my initial assumptions.. Edward

Have a problem with a client that came to me for review of his 2009 tax return. It appears the other preparer computed the total DOT per diem amount by merely reducing 365 days by the number of days the driver WAS NOT DRIVING (sick, at home, or while truck was being repaired, etc) which totaled 56 days, leaving 309 days x 59.00 x 80% = $14,585. net DOT per diem placed on the return. I say this computation is totally incorrect. Because the drivers must take REST STOPS in accordance with DOT "HOURS OF SERVICE" rules, he should have maintained a written record documenting DATE, TIME AND PLACE of such REST STOPS. Then the resulting figure would be multiplied by 59.00 x 80% to arrive at the correct amount of per diem. This could greatly affect his total per diem as the truckers do have many days of down times like stop/wait times, sick time, at home, truck repairs, and many other NONE REST reasons while on the road which would not qualify for the DOT per diem rate. Am I correct on this assumption? Will appreciate any comments. Thanks.

Thats why I mailed my Form W-12 - In addition I attached the original IRS letter that gave me my PTIN, which also contained the Case Reference Number which was dated 10/28/1999. Maybe this will simplify the processing for them.

It's strange that the Form W-12 dosen't have a box to indicate our current PTIN?

After I posted the previous item, I received the NATP TAXPRO WEEKLY dated 9 Sept 2010 and would you believe that it appears that IRS is still confused about JUST how they should proceed with the PTIN/TESTING, etc. Following is a quote from the 'UPDATE; REPARER REGISTRATION AND TESTING: "NATP participated in a conference call on the 8th of Sept with David Williams, IRS director of electronic tazx administration and refundable credits. Williams is also responsible for the registered return preparer program. It appears the IRS is still trying to work out the details of the PTIN requirements, exactly who is required to obain a PTIN, and who is subject to the testing requirements. The IRS asked NATP for clarification regarding who the PTIN requirement should apply to and how and who should be subject to the education and testing requirements. IRS also mentioned that maybe payroll professionals (who only do payroll returns) would be exempt from the testing." - wow, seems as tho they are not totally certain how this program will proceed and create a problem regarding implementation of the the entire program.....

Access to the online sign-up system will be available through www.IRS.gov/taxpros in mid September. At time of this application the $64.25 payment will be required. Everyone must pay the fee and sign up for a PTIN using the new process, including those preparers who already have PTINs. Tax return preparers who already have PTINs will be assigned the same PTIN under the new system.

Ray. I don't believe there is any way to allocate the 130,000. If your client gets a 1099-Misc for the total amount for 2010 tax year then its taxable on the 2010 tax return. When IRS does the matching of 1099's, they will be looking for the 130,000 on your clients tax return. Thats the way it works for the "Cash basis taxpayer". Could your client get the offer to permit annual payments rather than a lump sum? Anyone have an additional opinion on this?

If you omitted an asset for 2009 and the return has been filed, I would think that a 1040X would take care of the asset that you missed for that year. Depreciaton changes that are not accounting method changes, are made on an amended return for the year being changed. I would think this is just a POSTING ommission and not a chanage in accounting method. A change in accounting method (requiring Form 3115) would be something like a "change in the method, recovery period or convention for a depreciable or amortizable asset; a change from not claiming to claiming special (bonus) depreciation; changing from the 30% bonus to 50% bonus; removing bonus depreciation for an asset that is not qualified property; a change in treatment from non-depreciable to depreciable, or vice versa; or a Change to capitlize an asset that had previously been expensed" In your case it was just an OMISSION and thus I would think a 1040X would take care of it? Can anyone else contribute to this opinion?

From NATP TAXPRO WEEKLY, 8/12/10: " Last week 31 members of Congress sent a letter to Treasury Secretary Timothy Geithner expressing concerns on two provisions in the IRS proposal regulating tax preparers. The concern raised was with regard to the registration of nonsigning preparers and the competency testing requirement. The Congressmen stated that the competency testing requirment may impose unnecessary burdens on the IRS' limited resources and tax return preparers and ultimately increase taxpayers' costs for return preparation. They also are not convinced that testing will eliminate some of the problems the IRS has identified within the tax preparation industry and they do not believe the IRS has adequately demonstrated that testing is needed. They feel that once the PTIN and registration system is operational, the IRS will have the resources necessary to track preparers and determine which ones need discipline. Their concerns are not unlike the concerns NATP has expessed from the beginning of this process. As always, NATP will keep you informed as these issues develop."

How many of you are aware of the "Family Child Care (TAX WORKBOOK & ORGANIZER)" developed by Tom Copeland, JD., of the Redleaf Press? Its not only a useful tool for Day Care Clients, but has tons of other detailed tax info and sample completed forms on Depreciation, 8829's Sch C, 1040X's, EITC, energy credits, a detailed sample completed form 3115, 4797's, sale of residence with office in the home situations, closing a business, dealing with audits and much more tax data that is extremely useful in any tax office. If you have child care clients encourage them to call the 800 number that follows and subscribe to the "Family Child Care Catalog" which has numerous resources for the child care professionals. The Tax Workbook & Organizer for 2010 sells for $17.95 and can be bought by calling 800-423-8309, or online at www.RedleafPress.org. I've been purchasing the book for years after attending one of Tom Copelands seminars in Austin. Check it out - you'll be glad you did!!!

For Jainen: IRS has stated that "All paid tax return preparers are subject to civil penalties for knowingly preparing a return and failing to sign or provide an identification nmber on a return they prepare". In view of this, what is your opinion on these preparers that deliberately avoid such rules? If they are going to continue as such shouldn't they be subject to the same critical oversight that all current tax prepares are facing in the future?

Don in Upstate NY read it correctly - JohnH certainly is no "creep". I was referring to those that do returns and intentionally omit signing returns even tho they are being paid.

I'm aware that when one moves a 401(k) into an IRA (trustee to trustee) a 1099-R is required showing the rollover - code G. However, if there is a subsequent "IRA TO IRA & TRUSTEE TO TRUSTEE transfer, there is no need for the issuance of a 1099-R. Have client who elected to move his total IRA to another IRA custodian but the movement was via an investment firm. Allstate Life Insur prepared a check in taxpayers name and sent it to the investment firm, who in turn sent the check to Riversource Life Insur. Taxpayer did not get possession of the check at any time. Allstate Life Insur then issued a 1099-R with the entire amount shown as GROSS & TAXABLE with a distribution code of 7 assigned. I called them and they advised that the reason for such was because this was not a TRUSTEE TO TRUSTEE type transaction. I suspect they are partially correct? However, how do I mdoify the 1099-R worksheet to reflect that the funds did go into another IRA? The 5498's support this fact? Will appreciate any help. Thanks...

Gailtaxed you are totally correct. I know many in the area that do just what you stated. In fact, I personally delivered a W-7P to one of them and boy did I get the looks. Had a clients friend visit me who showed me a return prepared by a preparer who dosen't sign returns. New Home Buyers Credit was involved and IRS had promised to act on the 5405 credit but kept extending the promise. But theres more: The preparer had, for some strange reason, attached a copy of W-9 for each taxpayer, along with a 4506-T?? I asked the taxpayer why these attachments and he had no idea WHY but went ahead and mailed it all to IRS? I believe IRS should enlist the assistance of the Post Office to run down all these creeps. My son delivers mail in San Francisco and he claims to know of many of these types working out of their homes and we can assume that the majority are processing unsigned returns as gailtaxed mentioned.

Just google Boise Golf Courses and they'll give you a listing. Have fun, the weather is great this time of year!!!

Check it out - There's an extension of expiring tax provisions like the deduction of State & Local general sales taxes; The additional standard deduction for real property taxes; Above the Line Deduction for Qualified Tuition and Related Expenses and Above the Line deduction for teachers and other school professionals on the 250.00 deduction; the 15 yr cost recovery period for certain leasehold improvements, restaurant buildings and improvements, and retail imrovements; the 5 year depreciation for farming business machinery and equipment THRU 2010 only. Unfortunately there's no AMT "patch" provided!!! The Act also has some details about SE tax on certain service professionals going thru S corporations to avoid such. The President has yet to sign the bill.

Am looking for someone thats doing tax returns for KLLM contract (1099-Misc). There's alot of confusing data that they are putting on their annual tax summaries for the drivers. My FAX nbr is 210-337-1043. Please contact me if you are doing taxes for this type taxpayer. Thanks....

A Calif person born in 1928!! I too wish you a happy, happy birthday.

KC: You're born on a perfect day - Checked the BioRhythm Calculator and it's showing a high on the Intellectual scale. That's what does it. Anyway happy birthday. Edward

Many thanks for all the warm wishes and I certainly hope to celebrate at least one more!!

Our prayers are wth you also, but I'm certain there will be intervention that willpreserve your happy life after a successful recovery. Like Taxbilly, I'm also running on 4 cylinders but persisting. I'm certain that all the prayers and thoughts on this board will assist tremendously for both of you.

kcjenkins: I did some more research on this and noticed that in pub 721, page 23 under part V is says under the simplified method that she can continue using the retire's monthly exclusion - and then further down it says the unrecovered cost CAN be claimed as an itemized deduction. So does this mean that we can go either way? I sure never new that. Wow, guess I learn something every day. What do you think? Thanks.