jklcpa

KC, I'm wondering what type of device you are posting from, or if you experience a delay in the post and are clicking 'post' again, or if something else is going on with the forum. Yesterday I deleted a duplicate posting of yours entitled "IRS prodded...." There were 2 identical posts with the exact same posting time of 1:41pm. I deleted the one that no one was viewing at the time. Then last night at 11:23pm the same thing happened with the gas station post by joanmcq. Again, 2 identical posts with the same time stamp. I deleted one of those also. Both of the deleted posts are still on the moderator's control panel. Eric, if the system is allowing 2 posts each time KC posts, this might explain why she was getting that spam warning, because it was thinking she was making multiple posts at the same time. Now that the control has been turned off, it's easier to see why the might have been happening.

Does that happen even when you spend time typing something out, or is it always on the new topics that are a cut-and-paste from another website? I could see where the system could think you are posting too fast if you open a new topic, do a CnP, and click on post that could all be done within a matter of a few seconds.

Even if ADP wasn't administering the plan, it's possible that a smart customer service rep would catch this and code it to be reported as taxable wages, BUT I've also had dealings with the less-than-smart reps that will report the compensation which ever way the client tells them. mrichman333, it doesn't make any difference about the 50-or-less employees, but if the company has an HRA plan, that in itself is considered a medical plan and the employees applying for individual coverage would need to know this when filling out the application. I agree with Jack that it sounds like this employer doesn't know what he's doing, and the reimbursement was reported incorrectly. At least the employee called and questioned it so that it can be corrected before any more time passes.

You're welcome, Jack. KC, you spammer, you! No idea.

I agree that we don't know whether or not the W-2 is correct or not, and neither does mrichman333. I also think Jack's assumption is reasonable and the client should be able to provide, or obtain, a copy of the HRA plan summary if a proper plan really exists.

All of the attachments you've made on the forum are found by clicking on your user name at the upper right then My Settings > Manage Attachments. The limit is 8 mb, so that may be your only problem and not the size of any given picture.

This will almost certainly be challenged, and it does nothing to solve the problem of unethical preparers. http://www.accountingtoday.com/news/irs_watch/aicpa-says-irs-voluntary-tax-preparer-certification-program-is-unlawful-71073-1.html Full test for those that don't like clicking links: The American Institute of CPAs has sent a letter expressing strong concern with the Internal Revenue Service’s proposed voluntary certification program for tax return preparers, saying it “would cause significant legal problems that may ultimately frustrate the IRS’s goals, confuse the public, and lead to litigation.” The AICPA expressed its concerns to IRS commissioner John Koskinen in a meeting and letter last month, but has increased its level of concern in the latest letter (see AICPA Opposes IRS Voluntary Tax Preparer Certification). In a letter Tuesday to Koskinen, AICPA chairman Bill Balhoff and AICPA president and CEO Barry C. Melancon wrote, “We have repeatedly expressed to you and your colleagues that our members have very significant concerns regarding a voluntary certification program and urged the IRS to have a formal comment period to obtain and consider the public’s views prior to moving forward. … However, it is our understanding that the IRS has no intention of slowing down or considering viable alternatives. Therefore, we feel compelled to consider our next steps, and to raise more formally our legal and policy concerns with the IRS’s current path.” Under the proposed voluntary program, tax return preparers would receive an IRS certificate for display in return for completing a continuing education program that includes a comprehension assessment. The AICPA’s letter emphasizes the following points: • First, no statute authorizes the proposed program; • Second, the program will inevitably be viewed as an end-run around Loving v. IRS, (a federal court ruling rejecting an earlier IRS attempt to regulate tax return preparers); • Third, the IRS has evidently concluded, in developing the proposed program, that it need not comply with the notice and comment requirements of the Administrative Procedure Act. This is incorrect; and • Finally, the current proposal is arbitrary and capricious because it fails to address the problems presented by unethical tax return preparers, runs counter to evidence presented to the IRS, and will create market confusion. Describing the proposed program as “unlawful and improper,” the June 24 letter stated that it is essential that any regulatory approach instituted by the IRS to address this issue has a firm legal basis and reflects sound policy. “We continue to believe that additional regulation of tax return preparers might yield significant benefits and that the IRS can achieve these objectives while remaining consistent with Loving and other statutory limitations on the IRS’s authority,” the letter stated. “We have sought to work with the IRS to achieve workable solutions to regulate tax return preparers and protect the public, and we stand ready to continue these efforts,” the AICPA wrote.

I'm sorry for your loss. It's never easy saying goodbye, and no matter how long their life, it's never long enough. I bet the three little kittens are wonderfully entertaining. Nice that you rescued them.

They sure are cute little 3 year olds, Eric. Pictures are over in the politics section in the "Gun Control Works" topic. http://www.atxcommunity.com/topic/15199-gun-control-works/

There is no sale. You tell your tax program that the assets were converted to personal use. Then the person transfers them to the S corp and records them as Old Jack described. The S corp will continue on to depreciate them as if they hadn't changed entities using the carryover basis. In the S corp return, it will show the original depreciable basis and the accumulated depreciation from the Sch C as the opening numbers and depreciate from there. The excess of FMV over the adjusted basis on the date of transfer is nondepreciable.

If you are planning to see any of the war memorials, I'd recommend you see the Korean War Memorial. I found that one to be very moving and eerie. It is a highly polished wall with images of soldiers etched into it, and also has a squad on patrol of 19 free standing full sized soldiers whose images are reflected in the wall. The reflections almost looked like ghosts among the men etched on the wall. I get chills thinking about it. ETA - what you have lined up is great. We love the Air & Space Museum.

There isn't a setting that you can change that will affect that function. Maybe you should PM Eric directly.

In my case that I asked about, it is a central air unit for the whole house.

It's never 7 year property, even if practitioners are using that shorter life incorrectly. First, the definition of seven year property includes property with a class life of 10 years or more but less than 16 years (Code sec 168(e)(1)). This includes office furniture, equipment and fixtures that are not structural components. Further, Code sec 1.48-1(e)(2) actually defines the structural components of a building - (e) Definition of building and structural components. (1) Generally, buildings and structural components thereof do not qualify as section 38 property. See, however, section 48(a)(1)(E) and (g), and §1.48–11 (relating to investment credit for qualified rehabilitated building). The term “building” generally means any structure or edifice enclosing a space within its walls, and usually covered by a roof, the purpose of which is, for example, to provide shelter or housing, or to provide working, office, parking, display, or sales space. The term includes, for example, structures such as apartment houses, factory and office buildings, warehouses, barns, garages, railway or bus stations, and stores. Such term includes any such structure constructed by, or for, a lessee even if such structure must be removed, or ownership of such structure reverts to the lessor, at the termination of the lease. Such term does not include (i) a structure which is essentially an item of machinery or equipment, or (ii) a structure which houses property used as an integral part of an activity specified in section 48(a)(1) (B )(i) if the use of the structure is so closely related to the use of such property that the structure clearly can be expected to be replaced when the property it initially houses is replaced. Factors which indicate that a structure is closely related to the use of the property it houses include the fact that the structure is specifically designed to provide for the stress and other demands of such property and the fact that the structure could not be economically used for other purposes. Thus, the term “building” does not include such structures as oil and gas storage tanks, grain storage bins, silos, fractionating towers, blast furnaces, basic oxygen furnaces, coke ovens, brick kilns, and coal tipples. (2) The term “structural components” includes such parts of a building as walls, partitions, floors, and ceilings, as well as any permanent coverings therefor such as paneling or tiling; windows and doors; all components (whether in, on, or adjacent to the building) of a central air conditioning or heating system, including motors, compressors, pipes and ducts; plumbing and plumbing fixtures, such as sinks and bathtubs; electric wiring and lighting fixtures; chimneys; stairs, escalators, and elevators, including all components thereof; sprinkler systems; fire escapes; and other components relating to the operation or maintenance of a building. However, the term “structural components” does not include machinery the sole justification for the installation of which is the fact that such machinery is required to meet temperature or humidity requirements which are essential for the operation of other machinery or the processing of materials or foodstuffs. Machinery may meet the “sole justification” test provided by the preceding sentence even though it incidentally provides for the comfort of employees, or serves, to an insubstantial degree, areas where such temperature or humidity requirements are not essential. For example, an air conditioning and humidification system installed in a textile plant in order to maintain the temperature or humidity within a narrow optimum range which is critical in processing particular types of yarn or cloth is not included within the term “structural components”. For special rules with respect to an elevator or escalator, the construction, reconstruction, or erection of which is completed by the taxpayer after June 30, 1963, or which is acquired after June 30, 1963, and the original use of which commences with the taxpayer and commences after such date, see section 48(a)(1)© and paragraph (m) of this section.

Thanks, Jack. I know very well how that conversation goes, having had it many times over the years. I was just being sarcastic. It's been a rough couple of days, weeks actually.

Right. I think she's going to end up with ~ $13 in additional depreciation this year, and a tax savings of a couple of dollars. I've spend more time answering her emails that this is worth because from the way she wrote to me, it sounded like her rental property on the first go-round. I'm anticipating her next (typical) questions...why 39 years when the unit will last only 14? What happens then? Blah, blah, blah.

ATX always charged my card in May each year also.

Client will spend $6700 on a new A/C unit this year and she takes the home office deduction. Am I correct that this is 39 yr life and can be depreciated based on sq footage of the office to the total just like the home itself is depreciated? No more energy credits either, right?

It would be based on your client's use.

The land is most likely investment property, and its sale would be reported as a capital loss on Sch D. Installment method is not allowed for losses.

Yes, John, it's true. I saw this first hand when I worked as a supervisor and reviewer at one of the larger firms in town. Once computers came on the scene, the newer staff did not have as good an understanding of the interplay of forms within the return or how to balance a set of books. It was especially obvious if a reviewer sent the product (tax or financial statement) back to the preparer for corrections.

John is correct. I assumed that the distribution exceeded the contribution since the OP mentioned taxing the earnings. Follow the ordering rules.

Yes, there will be no penalty because the 5-year rule is moot since he is over 59 1/2, but the 5-year rule applies in all cases before earnings can be tapped tax-free.

JohnH is correct with his statement about forms based entry. If you look at the 1040 form in ATX, other than the demographics at the top of the form, there are almost no fields of direct entry unless you are overriding the program's input and calculations. Almost all of the input is done on other input screens, most having multiple tabs that the preparer has to work in that are nothing like the forms themselves. If you want to renew with ATX, you should contact them soon if you want the discounted price. If it's like past years, doesn't that only extend through the end of this month?

Jack, re: cred65's post, rev proc 84-35 applies to partnerships and does not include S corps, although I suppose it may not hurt to try to apply the same logic in your situation with the income being properly reported on the timely filed personal return. Also, unless you have a POA, technically only the taxpayer can request penalty abatement, so if the letter you sent was on the firm's letterhead and the firm didn't have a POA, it will most likely be ignored by the IRS. I agree with Margaret, that unless you filed the extension electronically and received a valid acknowledgement, you don't know whether or not the paper-filed extension ever reached the IRS.