jklcpa

Yes, agree with Randall. The retained earnings balance will differ from the AAA in this case since distributions can't reduce the AAA below zero.

I ran out one day too.

According to Deb, the client is age 21, less than a full-time student, and provides more than 1/2 of her support. For those saying she doesn't qualify, which part of question one do you think is precluding her from qualifying?

OK, I take that back then, but I still don't trust CCHSFS.

Pub 523 has a section with comprehensive examples devoted to those that rent the home for a portion of the time encompassing the 5 years. That section starts on pg 16: http://www.irs.gov/pub/irs-pdf/p523.pdf

I was scratching my head (was it yesterday? days are all running together) when someone here posted that ATX CCHSFS was blaming some glitch at the IRS when e-file rejects were being kicked out due to state EIN number missing from the W-2 entry. There was not one posting about this on the official Drake forum that has 10 times the registered users that this forum has. It's hard for me to believe this is an IRS problem and there was not one peep from anyone using Drake about a reject because of this. Anyway, it seems like most everyone is having a good season with the software this year. I just don't trust CCHSFS after last year's debacle.

I don't have a quick answer on the part about the tax on NII, but #2 is true. Bonuses accrued to a group or pool of employees that are paid within 2.5 months after year-end would be deductible in the year accrued if the forfeited bonus is reallocated to the others remaining in the pool. But, if the bonus requires that an employee still be employed on the date of the payment, then the "all events test" isn't met until that date that the bonus is paid, which would be in the following year. Here's a good article from the AICPA that covers it pretty well. Bonus Deduction Timing - Finding the Correct Tax Year Also, CPA is correct that bonuses to related parties can't be accrued. They are deductible in the year paid. It's part of code sec is 267 that puts limits on related party transactions and converts those transactions to a cash basis so to match the transaction in the same reporting period as the cash basis owner. A quote taken from another source: "The related party rules under IRC S. 267 require the matching of income and deductions arising from transactions between related parties. Related parties include individuals owning more than 50% in value of the outstanding stock of the company. The law requires that even if all events have occurred to fix the liability and the economic performance rules are met, the deduction may not be claimed until the year in which the related party recognizes the income. Thus, in the instance of a bonus payment to a greater than 50% shareholder, the amounts will not be deductible by the company until the period in which the income is recognized by the shareholder."

IRC sec 4974(c ) specifically includes 401(a) plans in the definition.

Yes, I see what you mean, hopefully a nagivator will be able to help.

From the IRS site (same info is on healthcare.gov too): http://www.irs.gov/uac/Questions-and-Answers-on-the-Individual-Shared-Responsibility-Provision If my income is so low that I am not required to file a federal income tax return, do I need to do anything special to claim an exemption from the individual shared responsibility provision? No. If you are not required to file a federal income tax return for a year because your gross income is below your return filing threshold, you are automatically exempt from the shared responsibility provision for that year and do not need to take any further action to secure an exemption. If you are not required to file a tax return for a year but file one anyway, you will be able to claim the exemption on your tax return.

IIRC, with ATX, the federal vouchers were printed 3 on one sheet and the one more for the 4th, and then in more recent years were printed one per sheet that was blank at the top. Are there any instructions at the top now? Drake is printing the instructions at the top of each sheet with the voucher at the bottom. If I cut them, then the client loses that part of the instructions. For the estimate vouchers, I give printed labels now instead of envelopes because most of my clients are paying online, and some of those will add all 4 state vouchers together and pay all 4 in April. There are still a few that get envelopes though. I still give envelopes for the balances due on the return though.

I don't cut them either. Give them the whole page. Some of the forms my program is now printing have the instructions on the top so I can highlight those and no need for a separate sheet of instructions. Win all around. I also highlight the words, "cut on the dotted line and send the payment with the portion below" for the ones that can't figure that out for themselves!

You would use the exercise date of 4/25/13 as the date of purchase. The grant date is the company giving the employee the chance to purchase the shares during a specified time and at a discounted price. The exercise date is the date that your client actually did make the purchase and acquired the shares.

Some mortgage company's 1098s are accompanied by a statement that shows the monthly activity for the year with a breakdown of P & I and escrow additions too.

Yes, I check HUD-1 back to county records for the real estate taxes pd in advance by the seller that the buyer is charged for because my state's fiscal year end is 6/30 with tax due date of 9/30 or 10/1 and these aren't included in the 1098 r.e. taxes paid from escrow many times. I'll also tie in the mortgage interest shown on the 1098 to make sure the interest in advance paid at closing is included.

It's a trademarked word...because they are that special.

That's what I tell them too, and they all agree with me.

Yesterday I scored a 6.5 out of 10!

In addition to all that MAS listed, there's also the time spent doing these: roll over from last year or set up as new client input the data maybe reviewed the return with client had them sign the e-fle authorization forms, scanned those in transmitted returns received acks and documented those

OK, you aren't selling the corporation's stock, so the company is selling some sort of asset. You said it isn't inventory or equipment, so what exactly is the purchaser paying for? Is it a customer list, the company's name, goodwill, or what? Whatever it is, it doesn't go on line 21 of your personal return. It sounds like the company is selling something of value that should be reported through the S corporation.

No, if it's a sale of a capital asset, then you are actually selling the stock of the S corporation and it would be taxed as a capital gain. That is one reason why a seller of a business tries to structure the sale as a stock sale instead of an asset sale, so that it gets taxed at the cap gain rates. In that case, the purchaser becomes the owner of the corporation.

I had 2 easy ones in today, pretty much the only ones that I do while the client waits. Other than having to get 2 folders out of my closet and a paper jam in the scanner, they were in and out in a short amount of time. I don't want to work like that all day, every day though.

She can give $14K this year, and if she is married, her husband could also gift $14K to her dad, all with no gift tax or estate consequences. She/they could repeat the same for 2015 and have given her dad $48K if she is married, or half that if she is single. Also, there won't be any gift tax to pay if she has enough unified credit to cover the "taxable" portion of the gift(s) if she wants to give the entire amount in 2014. If your client made any prior gifts, the amount of the credit available has to be recalculated in this year for prior gifts that used some of that credit because of the increase in the unified credit due to the law changes in 2010. If she's never given any gifts during her lifetime, she could give dad $50K this year, $14K is completely free of any gift tax effect, and $36K of her unified credit would be used up, but she wouldn't pay any gift tax at all. That's a hypothetical based on her receiving $100K; I know you said $100K+, but that's how it works.

What if the client signs the 8453 or 8879 but doesn't pay within 3 days? According to pub 1345, and ERO is considered to be stockpiling returns if those aren't transmitted within 3 days. CHAPTER 3 Electronic Return Origination Submitting the Electronic Return to the IRS An ERO must ensure that stockpiling of returns does not occur at its offices. Stockpiling is collecting returns from taxpayers or from another Authorized IRS e-file Provider prior to official acceptance in IRS e-file; or after official acceptance to participate in IRS e-file, stockpiling refers to waiting more than three calendar days to submit the return to the IRS once the ERO has all necessary information for origination. The IRS does not consider returns held prior to the date that it accepts transmission of electronic returns stockpiled. EROs must advise taxpayers that it cannot transmit returns to the IRS until the date the IRS accepts transmission of electronic returns.

I think the age requirement applies only to those without a qualifying child.