SFBOB

Sorry I should have said 1041 not 1040.

I am having a problem with a client that has rental property in a Disclaimer Trust. The trust is irrevocable and created upon the death of her husband in 2007. In all years prior to 2010 the losses if any, stayed in the trust 1041 return. Now with 2010 ATX software, the loss flows to the 1040 line 17 through the K-1 data entry.

If any of you have a taxpayer with rental property in a trust, be very careful.Reporting depreciation has also changed. Rental Income, not including depreciation is reported on the K-1 line 7. Depreciation is reported on line 9. When the data flows to the 1040 through the K-1 worksheet, it nets out correct on line 17.

NOW HERE IS THE BIG ONE. The depreciation reduced the line 7 income and then went forward to the 8582 in the 1040 return for a passive loss carryforward to 2011. In other words the client gets to deduct the depreciation twice. I any of you have a client with this type of transaction, carefully check your work. Please E Mail me at [email protected], if you wish to discuss the problem. I have forwarded the infomation to CCH. Thanks Bob

Thanks for the Happy Birthday Greetings. I hit 80 on monday and still feeling pretty good most of the time.I am thankful every day for the Blessings I Have Received. Have a good day eveyone.

I suggest you call 1-916-845-7057. This is the practioner Hot Line. Call about 3:00 PM PST and ask for an experienced Corporation representative. Use this source to discuss a potential new client; then use the information to work out your clients problem. As the prior post stated; there is a $800.00 annual fee plus the Original fee to the California Secretary Of State $800.00. The secretary of state will issue the corporation number. Good Luck Bob

I am in head over heels with all the changes regarding the 5 year carryback option. No Alt Min calculations if the loss occured in tax years 2008 or 2009. I must make the correct adjustments on the NOL worksheet.The Loss was $335,000 in 2009 with a NOL of $164,000 before any adjustments on the NOL worksheet, that I may be required to make.If any one has done a Ponzi loss and would like to get into a phone conversation for the benefit of both of us? E Mail me at [email protected] and we can talk on my nickel.In closing; I have learned a great deal already and would like to share and continue learning with and advanced preparer on this subject. Have a great day. SFBOB

If you have not printed the instructions on form 1045, go ahead. Pour yourself a large drink of your choice and go to it. This will be a good learning experience for you. Good Luck Bob

Most of the time California plays it pretty loose. Call them with all the taxpayer information and my luck was been pretty good on the first call. If you have not prepared the prior year, that may be a different story. Good Luck Bob

Thank you very much and good night, jainen.

Lucho

mcb39 To the best of my knowledge William Tasker is in the publishing business in Caribou Maine. Eric very likly is in contact with him. I did talk to him many months ago and he decided CCH and a move to Rome Georgia was not in his plans. I plan to stay with aATX until I close my business. I will hit 80 July 5th. Have a good one Regards Bob

Yes, Bob, I remember William Tasker well. He is the first person that I ever got phone support from, many years ago. He went on to bigger and better things and for several years was the trusted ally of the ATX Community Board before CCH took them over. Is he still with them?

In all honesty, in all of those years, I have only had to call support a handful of times. Mostly because somebody on the "board" had answered the question before I had to ask it. This is in reference to both the old ATX board as well as this new one that Eric so kindly created for us.

I have e-mailed them twice about the referral matter and have never received a reply. I also talked to a sales rep in that regard and he was going to take care of it and get back to me. At this point, I no longer care. I have not received a renewal call from them to my knowledge. To be fair, though, I am away from home a lot and could have misseed it as sometimes messages get deleted before I get to listen to them. But, I have my cell phone with me at all times. Yes, I have been with them a long time. In fact I still have the 1999 through 2009 programs, inclusive, on my main work computer. Jump drives enable me to work when I am away from home as I am now.

Thank you for acknowledging my post. (I was part of the meal that many of us old faithfuls put on for the support crew when William was still there and it was still ATX.)

Hi mcb39 If you have been around since 1996 then you know William Tasker, he remembered all of us. CCH is a very large corporation and they work just like the banks. New face every Saturday morning when I come in. I have had excellent service from Tech support by sending an E Mail and getting an answer every time within 24 hours. I also blow a little smoke their way and thank them in advance for the gretat service they provide. Good Luck Bob

My concern for the future of ATX software is that many of the new prepares coming into the business have very limited tax knowledge.I recomended ATX to an associate several years ago that was using Lacerte; she purchased ATX on simple returns that were W/2, standard deduction and E Filed. Her town was small and several hundred clients worked for the same company. I called her the next year and asked how she liked ATX. She said it takes alot more tax knowledge. I said what do you mean; she said I MEAN IT TAKES A LOT MORE KNOWLEDGE!!!. She has continued to use ATX for E Filing due to the low cost and is using Lacerte pay per return for complex returns. This lady has been in the tax business for over 25 years.

I like ATX because I started on the forms and took H&R Block classes when I started in 1987 after retiring from my own office supply business.I like to see where the numbers are going on the forms.

I demoed ATX to several of my associates using Prosries and Lacerte and their main objection was that they could understand it, however their employees could not. THEY NEEDED TO ANSWER THE QUESTIONS ON THE INPUT SCREENS.The fact that ATX is based upon a spread sheet requires moving to many many locations on the screen.

The future is in growth of the ATX Tax program sales for CCH and I do not see it happening.If you have not guessed by now I am 80 years old.I plan to stay with ATX as long as it continues to be available. [Lets ask our selves how long the ATX users on this site have been in the business] and how many are new preparers. Have a good one Bob

When I posted this about supporting the forum;I had not read the dinner contribution post. Eric and the Mrs, I hope you had a great time out on the town.

This is an unsolicited post. Think about all the hard work that Eric does in our behalf by maintaining this fourm.He does not have the CCH bank roll behind him.I am sure tossing a bone his way would be appreciated. I just mailed my bone, why not join me. Click on donations on the upper task bar on the home page.ERIC PLEASE DO NOT DELETE THIS MESSAGE FOR A FEW DAYS.Have a great day everyone. Regards SF BOB

The executor is responsible for filing the final tax returns for the decednet and very likly a 1041 for the estate or trust. This could be a good opportunity for you to do the correct work for the executor. I am sure you will receive several reply to your question. Good Luck Bob

I also agree with the regulation, however want to make this point to all of those that use this site.

PLEASE DO NOT THINK YOU WILL BE EMBRASSED BY ASKING YOUR QUESTION,WE ARE HERE TO HELP YOU. YOUR QUESTION IS NOT STUPID!!! Have a great Sunday Regards Bob

The client after deciding to fund the bypass trust with rental property, asked me to make a projection of how the children would fare on his death after 20 years.

[1] I have reconfirmed that the suspended losses on the residential rental property remain in the trust and do not pass to the survivor annually for his benefit on the 1040.[2] I worked an example of suspended losses carried forward for 20 years an prepared example return on the 2008 ATX software. Result is when the property is sold the gain reported in the 4797 results in a K-1 entry on line 11D, Net Operating Loss Carryover. The benefit to the beneficiariy will require an amended return with an NOL carryback at the time of death of the father.

[iNTERESTING STUFF THIS TRUST TAXATION]. Most of us do not get envolved unless we have a good rerlationship with a trust attorney. There is good money in this work if you can get it!!!. Thanks to all for your feed back Bob

Client and his attorney have decided to fund the trust with the rental property. Main reason is to make the principal amount from the stocks available to the surviving spouse if needed. I have confirmed with NATP for a $25.00 question that the passive looses remain in the trust and are released when the property is sold or pass to the beneficiaries. Thanks to all for the feed back.Bob

Thanks jasdim I am on three forums and only 2 replys. The rentals are 2 single family residential rentals. Each FMV $1,000,000. My thought is would the Stock and Mutual funds create a problem if used to fund the trust?Problem with using the rentals is the suspended passive losses are not available to reduce the srviving spouse's current income. Your continued thoughts will be appreciated. Bob

Taxpayers were married 30 yeras and lived in a community property state.

A revocable trust provides for a bypass trust upon the death of the first spouse, wife died November 2009.Community property consisits of the pesonal residence FMV $1,000,000, residential rental property FMV $2,000.000, Stocks and mutual funds FMV $2,000,000.

I have learned that passive loss on rentals [ as a result of stepped up basis] will not pass through to the survivng spouse if the rentals are used to fund the trust.The passive loss remains in the trust until the rentals are sold or the assets are distributed to the beneficiaries upon the death of the surviving spouse.

The trust document provides for distribution of all income at least annually, [ capital gains at the discretion]of the surviving spouse. It would seem that the main disadvantage of funding the trust with stocks and mutual funds would be tying up principal that may be needed by the surviving spouse.

Surviving spouse is 60 years old and lives on the income from the rentals and investments. If this were your client, how would you fund the trust? Thanks for your time. Bob

Yes the comments in the S/S letter refers to one time home sales and other large income spikes. Will adjust down in 2011. Just wanted to share this with other ATXer's

With the decline of the stock market during the fall months of 2008 my client sold an annunities resulting in an incresed AGI of $100,000.00.The result was a Medicare cost adjustment of $110.50 per month, plus $110.50 penalty for the high income. Total result was $221.00 monthly deduction in the original $1089.00 monthly S/S. Client is single and AGI range is as follows:

$85,000.01 TO $107,000.00 Adjust $44.20

$107,000.01 TO $160,000.00 " $110.50

$160,000.01 TO $214,000.00 " $176.80

OVER $214,000.00 " $243.10

Clients normal taxable income is $10,000.00 plus non taxed $13,068.00 S/S

MFJ and MFS is a different adjustment.

When your client calls, tell them that the reason is detailed in the letter they received from S/S [That is if they read it and saved it]

As a general point of information; the client sold the annunities because she found that the insurance company had 85% of her policy value invested in the stock market on a fast train headed south in 2008.

Have a great Holiday Regards Bob

Google The Tax Book and you will find their home page. I also use Lassers Your Income Tax. The professional hard cover edition. Phone 1-800-678-0484

Sorry for the duplication. Just learning the steps. Thanks for your understanding. Bob

What is the web link to the Tax Book that you are talking about? What is the cost?

Thanks for the information!

Google The Tax Book and you will find their home page. I also use Lassers Your Income Tax. The professional hard cover edition. Phone 1-800-678-0484

Google The Tax Book and you will find their Web page.As a point of interest, I also use the professional Edition of Your Income Tax by Lasser's Phone 1-800-678-0484 if you are interested.