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Bob, you were clear. When I prepare my own corporate return for the office, and for my personal returns, I leave the paid preparer info on there too.

John, are you doing that in Drake? When I looked at Drake's preparer setup, it requires a separate login for each preparer and must also have a PTIN for efiling. So if you are entering for preparer "..", what is the PTIN entered? Or are you filing these on paper? Seems like a hassle, and I agree with Jack on this and show my paid preparer info on all returns.

And for further clarification, the general chat says "Discuss taxes, software, anything you want besides politics." I think by now all here know that the IRS and taxes are political pawns, and the article does nothing to enhance our knowledge that will help us with the business we conduct with this agency. It was purely a political piece.

Did you leave out a PB, bacon & banana sandwich? btw.....ewwwww at that.

Lloyd, the post count is the # of posts you've made and shows up at the left below your name and avatar. It will probably be a pretty low #, only to make sure that new users are legit real people that are tax professionals that should be participating here, not just the spammers that we sometimes get. If you can already see the new private forum, you don't need to worry about the post count.

Jack makes a good point, and the worksheets will help document the deduction split for our purposes, but those worksheets aren't efiled with the return. Is there a way to document this on e-filed returns so to avoid the notices? The instructions for line 11 specifically say that an attachment is necessary as documentation in this case for a paper-filed return. Since it doesn't specifically address this issue for e-filed returns, I created a document with an explanation of the split and included the scanned Form 1098, and attached this as a pdf to the efile. Specifically, I had 2 new clients last year that purchased a house together, unrelated individuals both filing single, not MFS returns. Both names appear on the Form 1098 but obviously was reported under the first-named's social security number. I efiled the return with the attachment named so to be very obvious as to what it related to, and I haven't received as notice...yet. I did the same thing in a previous year for a divorcee where the 1098s came in the name of the former spouse. Never a notice there either. Instructions for Sch A, line 11, 3rd paragraph only: Line 11 If you and at least one other person (other than your spouse if filing jointly) were liable for and paid interest on the mortgage, and the home mortgage interest paid was reported on the other person's Form 1098, attach a statement to your paper return listing the name and address of that person. To the right of line 11, enter “See attached. Anyone care to comment if my attachment will work to avoid the CP2000 on an e-filed return?

Is the notice coming to the spouse whose name was not on the Form 1098. If so, did you report it on line 11 as instructed, and not on line 10, and did you indicate and supply the attachment to document the interest?

David, I've been trying off and on today to find something for you that says the exclusion is still available to be used against gains on sales by estates or heirs, but I believe Lion is correct. This exclusion WAS available in 2010 only, and that's why the first linked document says "for sales after Dec 31, 2009". As far as I can find, in 2010 this was covered in IRC sec 121(d)(9) , that frustratingly now reads as something completely different. If you look at this site, on page 4 of the right-hand column, in very fine print you'll see the amendments for 2010, the temporary additions of the words that would have extended the exclusion to estates and heirs. It's the last line of that first block in the amendments section. Hope that makes sense. Here's that site for the actual code: http://www.gpo.gov/fdsys/pkg/USCODE-2011-title26/pdf/USCODE-2011-title26-subtitleA-chap1-subchapB-partIII-sec121.pdf

Even if an accountable plan was in place, the situation Rita describes where the pastor is traveling from his home to his place of employment, that travel is commuting. If he actually worked at both A and B, after he'd go to one place, then the travel from the first place to the second would be deductible, but not a situation where he goes from home to only one of the locations. I'd say there's no deduction.

Linsey Pollak is totally cool. Google his name and watch him make clarinets from other household objects. The curly garden hose is a fun one:

I participate in another forum, not business related, and it has a private section that works very well for those subjects or private photos that we want to keep from anyone other than members. Like Eric is planning, it is also hidden from the search engines and bots. I hope this new addition will give us the opportunity to get to know one another better and will make for a friendlier place that people want to come back to.

Mine as well.

Eric, thank you, it all sounds good to me. My only thought is that those that don't really care about the politics forum's demise might not click on this thread unless you change its title, or start a new thread announcing your plans and ask for comments and suggestions.

Yes, what KC said. KC, Eric and I had been discussing its ending off and on since last fall, and in April we all agreed again that it was best for the group as a whole to put it to rest. So that the forum wasn't disrupted by any changes during the busy season, Eric thought it best to end it during the slower months of summer, around the time that he does some overhaul work to the forum.

Even with the different font, people who are not frequent posters might miss that subtlety and take a post as a serious one. Maybe Eric can include a sarcastic smiley in the overhaul.

No, lol. I just had a little time to help, and I learned something from it too. A win-win.

I agree with Lynn and was about to post the same thing. Be sure to follow the instructions for the 5329 carefully and file a 5329 for each year of missed RMD. I think these are the correct line #, please check me though: Line 50 enter the RMD, line 51 the actual RMD taken, line 52 enter -0- on the line for the amount subject to the penalty and put "RC" (for reasonable cause) next to that line in parathesis along with the amount you want waived. Be sure to have a cause. Is this a small 401k where she possibly was not notified of the RMD? The 401k plan should have had her DOB on file and should have been notifying her each year of the value of the amount and the amount required to be withdrawn each year.

I found this site for you that gives a reference to a CA FTB publication that may give you the answers to the CA taxation of the IHSS: http://www.sbsnap.org/profiles/blogs/ihss-and-respite-income-exception-irs-and-ca-taxes From that site: IHSS and Respite income Exception IRS and CA taxes IHSS and Respite Income http://www.tacanow.org/news/ca-only-qualified-medicaid-waiver-payments-not-subject-to-federal-tax-in-2014/ " Taxpayers may exclude payments defined in Notice 2014-7 from taxable income in 2013. They may also file amended returns for any return open under IRC section 6511. That code sections means any return filed within the past 3 years. Please note, IRS Notice 2014-7 mentions both IHSS and respite payments. "IHSS income can be amended for California state taxes as well. See FTB Publication 1001 on page 3 discusses IHSS income. It is amended on Schedule CA. This has been in effect before the IRS came out with their notice 2014-7.

^ that, exactly. Atticus is one of our long time members that would never suggest that someone cheat like that. Hmm, donuts...time to eat the donuts. Thanks for that suggestion, Rita.

Maybe these links will help you: In general, income not taxable, relative & nonrelative: http://www.tacanow.org/news/ca-only-qualified-medicaid-waiver-payments-not-subject-to-federal-tax-in-2014/ and this one: http://www.ihssadvocate.com/news/ihss-income-not-federally-taxable From the 2nd link above: Accordingly, as of January 3, 2014, the IRS will treat qualified Medicaid waiver payments as difficulty of care payments excludable from gross income and this treatment will apply whether or not the care provider is related or unrelated to the eligible individual. The IRS will no longer assert the Alexander, Bannon, or Harper cases. Nor will it assert the position taken in PMTA 2010-07. About the 3 year look-back, clarified amending instructions: http://ihssadvocate.com/news/irs-notice-2014-7-clarified-amending-instructions Short article from a CPA: http://ihssadvocate.com/news/notice-2014-7-explained-by-regina-levy-cpa#overlay-context=news/irs-notice-2014-7-clarified-amending-instructions IRS Q&A re IHSS: http://www.irs.gov/Individuals/Certain-Medicaid-Waiver-Payments-May-Be-Excludable-From-Income Maybe one of the other CA preparers on here will answer about the state's handling.

Was this a NY state S Corp, and was the sale somehow connected to NY? That might be the reason for the gain being taxable in that state, whether he is a nonresident or not. The article states that the S Corp didn't have property, payroll or receipts, generally the 3 areas used for apportionment of income, but doesn't specifically state about the gain. This is why Delaware, where we have a lot of companies that have incorporated and operate here, many years ago put in a law that S corps and partnerships having nonresident shareholders must withhold at the highest state individual income tax rate on the nonresident shareholders' porportional share of income and turn those payments in to the state with the partnership or corp return, because those partners and shareholders didn't always didn't report and pay the taxes due to the State of DE. It is then reported like an estimated payment on the partners' or shareholders' DE nonresident return, and they can claim the taxes paid to other states on their resident state return.

Sara mentioned Sch D only because her example related to how an unreported stock sale would trigger the CP2000. I agree that you should file the 1040X to document the discharged debt.

Joan, it wasn't held in a trust prior to death, was it? That may change my answer, but I believe if the property was titled in the individual name, then you would use the stepped up basis and depreciation starts over in the estate, covered by IRC 1014(a), I think. If the deceased was the sole owner, any depreciation taken by the estate before death is ignored at the time of disposition, so if the estate continues to rent and depreciate, the basis at disposition would be the FMV at DOD (or the alternate valuation date) less any depreciation taken by the estate. It is more complicated if the property was not solely owned because the other owner(s) continue on with their original basis and depreciation, and they may or may not be the person or entity that inherits the property. Community property states also complicate a situation where property is co-owned. Below is some narrative and an example that may help: Depreciable Assets Depreciation is one of the “events” that affects basis; when a taxpayer has recovered part of his or her investment through a depreciation deduction, the basis must be reduced by the amount of the deduction. However, if you inherit property that the decedent had been depreciating (because he or she had used it in a business or rental activity), the inherited basis of the property may or may not be affected by the prior depreciation that was claimed. If the decedent was the sole owner of the property and died prior to 2010, the inherited basis is the full fair market value at the date of death (or the alternate valuation date, if applicable) – that is, no adjustment is required for the depreciation allowed while the decedent was alive. The inherited basis from decedents dying in 2010 is determined by a more complicated set of rules (see CAUTION 2010 earlier in this article). If the property continues to be used for business or rental purposes, depreciation starts anew based upon the inherited basis. As explained above under “Beneficiary Tax Basis,” when the decedent had jointly owned the property with another individual, the post-death basis is made up of two parts; the surviving tenant’s part of the original basis plus the value of the portion of the property included in the decedent’s estate. For depreciated property, the combined new basis is also reduced by the depreciation that had been allowed to the surviving tenant; the decedent’s previously claimed depreciation is ignored. For example, Mother and Son invested $60,000 each for a rental property that they owned as joint tenants with the right of survivorship. Up to the date of Mother’s death, depreciation of $20,000 had been claimed. The fair market value at Mother’s date of death was $200,000. The inherited basis of the property is $150,000 ((50% x $120,000) (50% x $200,000) - (50% x $20,000)). If the beneficiary and the decedent jointly owned the property, and the beneficiary continues to use the property for business or rental purposes after the co-owner’s death, the beneficiary continues depreciating his or her adjusted basis under the same method used in previous years. Depreciation on the part of the basis inherited from the decedent starts anew as of the date of death using the modified accelerated recovery system (MACRS). A surviving spouse who inherits community property from his or her deceased spouse that was used for business or rental purposes does not reduce the inherited basis by any portion of the depreciation attributable to the period prior to the spouse’s death. The entire new basis (less any land portion if the property is real estate) is depreciable. Below is a link to Reg 1.1250(3)( b ) that also talks of basis, gain calcs, and how the additional depreciation that is normally used in computing depreciation recapture prior to death is adjusted to zero immediately after death. The deprec recapture would only come into play if the property was acquired by the transferee prior to death, and then the gain would be considered IRD and would be subject to recapture. Anyway, the section I referenced starts at the top of the right-hand column on page 2, and continues on with an example on page 3: http://www.gpo.gov/fdsys/pkg/CFR-2012-title26-vol11/pdf/CFR-2012-title26-vol11-sec1-1250-3.pdf

Raven, your client should definitely file a Form 1040 because the statute of limitations on assessments hasn't started until a return is filed. An SFR doesn't consititute a filing and does not start the statute of limitations running.

Article in yesterday's NY Times: Russian Hackers Amass Over a Billion Internet Passwords By NICOLE PERLROTH and DAVID GELLESAUG. 5, 2014 A Russian crime ring has amassed the largest known collection of stolen Internet credentials, including 1.2 billion user name and password combinations and more than 500 million email addresses, security researchers say. The records, discovered by Hold Security, a firm in Milwaukee, include confidential material gathered from 420,000 websites, including household names, and small Internet sites. Hold Security has a history of uncovering significant hacks, including the theft last year of tens of millions of records from Adobe Systems. Hold Security would not name the victims, citing nondisclosure agreements and a reluctance to name companies whose sites remained vulnerable. At the request of The New York Times, a security expert not affiliated with Hold Security analyzed the database of stolen credentials and confirmed it was authentic. Another computer crime expert who had reviewed the data, but was not allowed to discuss it publicly, said some big companies were aware that their records were among the stolen information. “Hackers did not just target U.S. companies, they targeted any website they could get, ranging from Fortune 500 companies to very small websites,” said Alex Holden, the founder and chief information security officer of Hold Security. “And most of these sites are still vulnerable.” Mr. Holden, who is paid to consult on the security of corporate websites, decided to make details of the attack public this week to coincide with discussions at an industry conference and to let the many small sites he will not be able to contact know that they should look into the problem. There is worry among some in the security community that keeping personal information out of the hands of thieves is increasingly a losing battle. In December, 40 million credit card numbers and 70 million addresses, phone numbers and additional pieces of personal information were stolen from the retail giant Target by hackers in Eastern Europe. And in October, federal prosecutors said an identity theft service in Vietnam managed to obtain as many as 200 million personal records, including Social Security numbers, credit card data and bank account information from Court Ventures, a company now owned by the data brokerage firm Experian. But the discovery by Hold Security dwarfs those incidents, and the size of the latest discovery has prompted security experts to call for improved identity protection on the web. “Companies that rely on user names and passwords have to develop a sense of urgency about changing this,” said Avivah Litan, a security analyst at the research firm Gartner. “Until they do, criminals will just keep stockpiling people’s credentials.” Websites inside Russia had been hacked, too, and Mr. Holden said he saw no connection between the hackers and the Russian government. He said he planned to alert law enforcement after making the research public, though the Russian government has not historically pursued accused hackers. So far, the criminals have not sold many of the records online. Instead, they appear to be using the stolen information to send spam on social networks like Twitter at the behest of other groups, collecting fees for their work. But selling more of the records on the black market would be lucrative. While a credit card can be easily canceled, personal credentials like an email address, Social Security number or password can be used for identity theft. Because people tend to use the same passwords for different sites, criminals test stolen credentials on websites where valuable information can be gleaned, like those of banks and brokerage firms. Like other computer security consulting firms, Hold Security has contacts in the criminal hacking community and has been monitoring and even communicating with this particular group for some time. For people worried about identity theft and privacy, the discovery by Hold Security of a giant database of stolen data is highly personal. But there are steps everyone can take to minimize the hackers’ impact. The hacking ring is based in a small city in south central Russia, the region flanked by Kazakhstan and Mongolia. The group includes fewer than a dozen men in their 20s who know one another personally — not just virtually. Their computer servers are thought to be in Russia. “There is a division of labor within the gang,” Mr. Holden said. “Some are writing the programming, some are stealing the data. It’s like you would imagine a small company; everyone is trying to make a living.” They began as amateur spammers in 2011, buying stolen databases of personal information on the black market. But in April, the group accelerated its activity. Mr. Holden surmised they partnered with another entity, whom he has not identified, that may have shared hacking techniques and tools. Since then, the Russian hackers have been able to capture credentials on a mass scale using botnets — networks of zombie computers that have been infected with a computer virus — to do their bidding. Any time an infected user visits a website, criminals command the botnet to test that website to see if it is vulnerable to a well-known hacking technique known as an SQL injection, in which a hacker enters commands that cause a database to produce its contents. If the website proves vulnerable, criminals flag the site and return later to extract the full contents of the database. “They audited the Internet,” Mr. Holden said. It was not clear, however, how computers were infected with the botnet in the first place. By July, criminals were able to collect 4.5 billion records — each a user name and password — though many overlapped. After sorting through the data, Hold Security found that 1.2 billion of those records were unique. Because people tend to use multiple emails, they filtered further and found that the criminals’ database included about 542 million unique email addresses. “Most of these sites are still vulnerable,” said Mr. Holden, emphasizing that the hackers continue to exploit the vulnerability and collect data. Mr. Holden said his team had begun alerting victimized companies to the breaches, but had been unable to reach every website. He said his firm was also trying to come up with an online tool that would allow individuals to securely test for their information in the database. The disclosure comes as hackers and security companies gathered in Las Vegas for the annual Black Hat security conference this week. The event, which began as a small hacker convention in 1997, now attracts thousands of security vendors peddling the latest and greatest in security technologies. At the conference, security firms often release research — to land new business, discuss with colleagues or simply for bragging rights. Yet for all the new security mousetraps, data security breaches have only gotten larger, more frequent and more costly. The average total cost of a data breach to a company increased 15 percent this year from last year, to $3.5 million per breach, from $3.1 million, according to a joint study last May, published by the Ponemon Institute, an independent research group, and IBM. Last February, Mr. Holden also uncovered a database of 360 million records for sale, which were collected from multiple companies. “The ability to attack is certainly outpacing the ability to defend,” said Lillian Ablon, a security researcher at the RAND Corporation. “We’re constantly playing this cat and mouse game, but ultimately companies just patch and pray.” Nicole Perlroth reported from San Francisco and David Gelles from New York City.