jklcpa

Definitely talk to the parents. With this level of earnings, they may have done this so they could make IRA contributions for the kids.

Great, can't wait to read it.

It sounds like the OP is entering it as vacation home & the deprec is being limited to the income after other expenses were applied. I think for the rental home, I'd allocate the first 2 months of mort int & re tax to Sch A. Then for the remaining 10 mos after being put into service as rental, the balance of int & re tax to Sch E. If the rental home was 100% rental after being put into service, it should allow the depreciation to create a loss. And that loss should be deductible if the modified AGI on the 8582 is > $150K.

I also work as JohnH does. Most all of my clients are in by the middle of March. It really does work well.

George, I hope you're going to stick around on this board for the summer. The regulars seem to stay all year, but many will disappear after today. I think we'll all be test driving some new programs & posting our findings. At least, I hope it works out that way. Does the TRX prep 1041s? I do just a few W-2, payroll returns & 1099s. Does it handle these? Do you get a discount if we mention your name?

I just check that billing detail & it is a bit confusing. For the billing detail, it is listed by SSN & shows the # of states filed. Ex: early in the season I had a week with only one client's e-file consisting of a fed & 3 states. The billing detail shows fed $0.00 and in the state column shows 3 x $0.00. BUT, when I go to the "View Totals" that shows the total count, it shows a list of 1 fed e-file and 3 state e-files with a total count of 4.

I have TTO with unlimited e-file and was annoyed that I was getting those email reminders that my bill was ready. Bill? What's that? ATX lied? Not surprised. Anyway, I did notice that the bill listed and counted each return e-filed separately. So a client with fed & 2 states was being counted as 3 e-files. Then just think if all those were extensions. That could be 6 e-files for one client.

You can treat the OID as considered de minimus if the OID is less than 1/4 of 1% (.0025) of the face of the note multiplied times the # full yrs from date of orig issue to maturity. If determined to be de minimus, then OID can be ignored. In Biznester's facts, then as long as Note B had an orig term of > 5 yrs and Note C had an orig term of > 3 yrs, then OID is de minimus and ignored. Pub 550 has examples.

Your basis should not include the accrued interest pd at prch. The basis is the price of the bond and any fees for making the trade. Concerning the interest income in the year of purchase: the broker issues the 1099-INT for the gross amount paid and it's up to the TP to report the accrued interest pd at prch as a negative on Sch B, so the Sch B in the year of prch should net out to the interest income for the period the bond was actually owned. Example: 10K 5%bond pays int 6/1 & 12/1. Bond purchased on 7/1 for face plus $75 in commissions & fees. Total cash outlay is $10116 calc'd as follows: Face of $10000 Fees $75 Accr'd int pd at prch $41 In year of prch, TP collected $250 of interest on 12/1, which is for the entire 6 mos even though he owned it for only 5 mos. 1099-INT for the year of prch will report the full $250, but the TPs Sch B for the year of purchase should report the $250 on one line & then subtract (as a negative) the $41 accrued int pd. So he really only paid tax on $209 of interest. So then the bond or note is redeemed for face and TP pays another fee of $75. His basis is $10000 plus the orig fee at purch and the fee to sell. His total basis & selling expenses in the example = $10,150 (10000 + 75 + 75). So TP has a loss of $150.

I thought life insurance proceeds could be taxable to a corp if the the corp is subject to corp AMT. Or am I wrong on this?

We don't know what the $103,000 of other income consists of. Of that, earned income would have to be $28K to deduct the full $30k using sec 179.

The accrued interest pd at prch should have been reported as a negative on Sch B in the year of prch, so no taxes should have been paid on that interest. That way the TP should have only paid taxes on the interest for the period that the bond was actually owned. The Sch B instructions cover this. Read the instructions for Line 1 Interest Income under the heading "Accrued Interest." The reason a buyer pays accrued interest at purchase is because at the next int payt date, the buyer will receive the full 6 mos interest, even though the bond didn't belong to him/her for the full six mo period. The accrued interest isn't part of basis. ETA: Agree with Maribeth. I just need to type faster, or not at the same time. :)

It sounds like most of the criteria has been met for this to be mortgage interest, BUT, to be deductible as mortgage interest, the debt must also be secured debt. Is the home security for the debt in the event of default? Also, you might want to read the interest tracing rules. If your client put the entire proceeds into a checking account that was used for other purposes while the construction was going on, some of the debt will be considered other than mortgage debt. It could be personal or investment debt. For example, if he put the entire proceeds into an investment account & then paid out the construction expenses as needed, that interest could be investment interest. All of that then brings up the ordering rules for repayment of the debt as well.

If they paid points on the new loan, they'd be shown on page 2. They'd be amortizable over the life of the loan. But they prob didn't since you don't have a 1098. Also, you prob don't have a 1098 because their 1st pay't on the loan should be due 1/1/08.

Is the estate filing a calendar year return, because estates can have a fiscal year? The estate can choose, as its year end, any month end date that is not more than 12 mos after dod. That means that this estate might have a year end as late as 8/31/08. When the EIN was applied for, what year-end was specified?

Is this a new return that you've typed in or a rollover from last year. Maybe there's a space (you hit the spacebar) that you can't see. Maybe try deleting his name & # and retyping. Or paper file the return. How long is it taking to get a reject error back?

go to the worksheet for line 21 of 1040. It's the 7th entry down the page

My work is completed & the limited # of extensions I have are already filed. I'm exhausted too. I took today off and attended to some personal business. Yard work is upcoming. Today was absolutely gorgeous here, my weeping cherry blossoms are just popping. I just love this time of year, especially now that I can relax a little.

use 5 yrs

Yes, do the amendment. Don't you think the clients will also be asking why the refund is so different from LY ? I know mine would.

JB, the 1040 should report the mother's income up through her date of death. Then, an estate can have 2 types of filings for federal purposes. One is Form 706 if the estate ASSETS are high enough to be taxable. The second is the Form 1041 if the estate had INCOME that was collected after the date of death. The 1041 is also referred to as "fiduciary" return.

I successfully efiled a return that had 2 forms 8606 in it. TP & SP both have basis in trad IRAs and are receiving RMDs.

The threshold for filing is gross income of $600 or more.

My cutoff's been around 1 or 2 am, but then I have to read for relaxation to fall asleep. Sometimes sleep doesn't come until about 3, so I've been on about 4-5 hrs sleep for the past couple of weeks. I don't see anyone before 10am, and all I can say is that's it's a good thing that my computer doesn't have that camera/video thing on it. Lots of work done in sweat pants & t-shirt when there's no appts before lunch!

From Pub 334, Ch 10 under the heading Who Must Pay SE Taxes: Fishing crew member. If you are a member of the crew on a boat that catches fish or other water life, your earnings are subject to SE tax if all the following conditions apply. You do not get any pay for the work except your share of the catch or a share of the proceeds from the sale of the catch, unless the pay meets all the following conditions. The pay is not more than $100 per trip. The pay is received only if there is a minimum catch. The pay is solely for additional duties (such as mate, engineer, or cook) for which additional cash pay is traditional in the fishing industry. You get a share of the catch or a share of the proceeds from the sale of the catch. Your share depends on the amount of the catch. The boat's operating crew normally numbers fewer than 10 individuals. (An operating crew is considered as normally made up of fewer than 10 if the average size of the crew on trips made during the last four calendar quarters is fewer than 10.) You are not subject to SE tax if you are under age 18 and you are working for your father or mother.