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Is that the rescue operation where about 800 dogs were living with an elderly couple in a triple wide trailer? It's a good thing I'm not closer to AZ or I'd be fostering or adopting!

Thanks, she's a long-haired chihuahua.

Son can't be a qual relative because his income was $4,900. QRs can only have $3,400 in income

Yes you are correct. Son claims own exemption. Exemption and std ded will result in -0- taxable income for the son. Tax benefit of education expenses is lost.

Clients have a property that was a vacation/rental for the first 2 yrs owned. Depreciation carrryovers were created due to income limitation. For 2007, clients decided to not rent this year & are using 100% personally. This property may or may not ever be a rental again.

The only item on Sch E is the "Vacation Home Carryover." I'm not sure if it's best to mark each asset as "converted to personal" or indicate business use % as 0%???

Should I file the Sch E with the return showing zero rental & the carryover?

If it's never rented again, what happens to the c/o? Is it just lost?

I suscessfully efiled an 1120S just 2 days ago with no problems. In fact, I was surprised that I received the ack as accepted the same day. It was efiled last year too. I am not efiling partnership returns so I can't say.

Have you efiled anything else this year?

Was it rejected by IRS, or just rejected by ATX server?

New this year, your EFIN must be "on file" with ATX before you can transmit any efiles, even if you've efiled in prior years.

Margaret, sorry for the late post. I too had the same situation in 2005. Client made non-ded IRA contribs in 2000, '02 & '03 & didn't tell me until 2005. I don't even know why it came up in discussion because she didn't contribute or withdraw from her IRAs in 2005 or 2006. Ordinarily the 8606 is only separately filed on its own if no 1040 is required. Penalty for filing late is $50/yr, so I told client to expect a bill for $150.

Client sent all 3 yrs' 8606s with a ltr of explanation to IRS that she never claimed any deductible contribs for these yrs, did not take any distribs from any IRAs (of any type) or make any ROTH conversions for any of these yrs. Also she stated that prior to the 2000 yr, she did not have "basis" in any IRAs. She also stated in the letter that she was not aware that this form was required.

Then form 8606 was filed properly with the 2005 return. 2 yrs later and my client never received any notice and was never assessed the penalty.

Actually, loans from qualified plans are taxable distributions unless certain exceptions are met. Perhaps your client failed to meet one of the qualifications or the loan proceeds exceeded the lesser of $50K or 1/2 the PV (but not < $10K) of participant's vested benefits.

You can read this in CCH Master Tax Guide at para 2164, or directly in code sec 72(p) - Loans Treated as Distributions. Also reg 1.72(p)-1, Q&A-4, -9 & -10

Repayments shouldn't affect the tax return.

On the K-1 Global tab, verify that your allocation & calculation options have the proper boxes marked. I have a very basic partnership return that I'm looking at as an example. On that K-1 Global tab, in my Allocation area the box that is marked is the "automatic select... (default)" option. Then in the calculation option area, that box is left blank.

If that doesn't work solve your problem quickly, this is what I'd do. Duplicate the return and using the dup then delete the K-1 form & redo just that. This method might be the least time consuming. The rest of the return is finished so you won't lose that.

Thanks for the reply, but you misunderstood slightly.

Exxon did split the settlement to my client because at one time he was operating as a proprietorship on Sch C and now he is incorporated. He received a check in his personal name & SSN, and also a check to the corp reported using EIN.

EACH settlement has a portion that is compensatory damages and a portion that is interest. Personally, he received 2 documents: a letter and a 1099-INT. (He also received the same 2 documents in the corp)

When Exxon prep'd the 1099-INT, they reported the interest net of the legal fees. There was no reporting whatsoever of the damage award. I am going to report the gross damages & report the legal fees on Sch A.

Since he no longer has a Sch C I hadn't considered the SE tax aspect of the damages, but you do make a valid point.

Client received a settlement in '07 from Exxon class action lawsuit. Settlement received is part compensatory damages & part interest income. Client received only a 1099-INT for the interest portion.

A letter shows detailed breakdown of gross settlement & related expenses. The 1099-INT reports the interest income NET of its share of prorated legal fees.

During some of the years covered by the lawsuit, this gas station was a Schedule C activity. The compensatory damage award is basically because Exxon overcharged dealers for their gasoline purchased. (Dealers were supposed to get a price break in their gas purchase costs if they agreed to charge customers different rates depending on cash or credit card payment. Exxon did not honor their end of the agreement & continued to charge Exxon dealers the higher price for the gas.)

Many years ago, my client incorporated the business (got a similar settlement this year in his corp) so he no longer has the Sch C operation. My question: should he report the gross damages as other income & the legal fees on Sch A, or can he net the legal against the damage award?

If he still operated as a Sch C today, how would he report this?

S Corp return efiled 1/30/08 & "accepted" ack was dtd 2/5/08.

Today I received another "accepted" ack for same S corp dtd 3/3/08.

What is going on? Anyone else have this happen?

Just one more strike against ATX in my book.

Yes, it certainly is annoying.

I'm also having another printing problem. When I print only the filing copies, all returns print. But if I ask for the filing copies & client copies to print, then I don't get everything. It skips printing the filing copies of the state return. This has happened more than a couple of times.

Client traded 04 Jeep deprec'd under luxury rules (& < 6000 lbs) for 08 Jeep >6000 lbs.

Both vehicles ~ 75% business usage.

I'm using Creative Solutions/Tompson depreciation program & it looks like its working properly for the basis new auto, splitting into its components. New basis is old Jeep as if deprec'd at 100% + cash paid. Under new rules, my basis in the new Jeep is ~ $5,600 lower than using old rules. This difference is the deprec not allowed over the yrs due to bus % <100%.

Now I'm doubting myself because my problem is that my fixed asset schedule doesn't tie-in to books. The difference is that same ~ $5,600. (The cash pd was posted to asset acct, and aje to cr asset & dr accum deprec for deprec actually taken on old Jeep). What am I doing wrong??? I've spent way too much time on this & I just can't rationalize this.

2nd question - looks like I need Form 8824 for this transaction. Is that correct?

It looks like I'd be better off electing out of this method, using the old method and having a higher basis for the new Jeep. Even with the bus use % applied, deprec basis would still exceed $25K and I could use up to that as sec 179 since it's over 6K lbs & is then an SUV.

I hope someone can straighten me out. I just want to scream or put my fist through the screen right now!!!!!!

It is always neat to see the eclipses. I was able to stand at my front door, inside & warm & watch it.

Husband & I support & are members of a small local observatory that gives a twice a month lecture. Free to members, and $2 for non-mem. It's amazing because after the lecture, we all get to use the telescopes, weather permitting. Someone really advanced will set up the telescope on the most interesting thing in the sky that night. In weather not good for viewing we also have a very fancy planetarium. It can simulate flying off the earth to other locations, changing all perspective of planets & stars that one would see, stuff like that.

For anyone here interested at all in the sky, stars and such, the McDonald Observatory at Austin, TX has a great website, magazine & daily radio program (can listen to on web too). Here's the link to STARDATE: http://stardate.org/

Earlier I got same red error messages as everyone else.

Then, I did an update around 9:30 with no problem.

Now at 9:49 at the stage to receive acks, I'm getting a new red error that says "unable to continue...due to server error...unknown error"

The process just locked up at the ack receive point. It wouldn't even go to the end for disconnect. I'm hoping that they're still working on their server & I'll try later.

I might have some interest later in the year, but not now. I doubt that I'll be renewing with ATX early, if ever again. I'll be evaluating new software choices this summer.

I did go to Drake's website & watched the prerecorded webinars. It gave an overview of the basics. It looked fairly easy to use. That would be one of my choices.

Tried to create the e-file for 1099-MISC & program wants and answer to whether or not this client has filed Form 6847 -Consent for IRS to Release Information as it relates to the Combined Fed/State Filing Program. Huh? This "yes" or "no" question is on the Payers Tab of the 1099MISC input area.

I just thought that efiling these was easier than printing on the red & mailing. If paper filing these, I'd normally only file copies with the Fed.

My client is not required to file electronically or on magnetic media.

So on the tab, should I just check "no" and be done, or is my client required to file 6847 before I can e-file these?

It would be more useful to me if NT / OT were separated, but I can live with it either way. I'll just skip the topics or posters I don't like to read. Even with separate sections, some OT & e-file postings would still end up in the tax section. It happened on the old ATX board too. So if it saves money & bandwidth to keep it the way it is, then do so.

Two things I don't appreciate are:

1) the total hijacking of a thread onto another topic (instead just start a new topic), and

2) as KC pointed out, the growing number of sarcastic posts by a handful of individuals. These serve no purpose here other than to undermine the helpful & friendly tone we have going.

Found a great screen cleaner. It's environmentally friendly too.

http://www.chunkysalsa.net/screenclean.swf

Yes, I just saw that today too & that we can only use the 8879-PE for filing extensions???

I guess that's why a just paper-filed the partnerships last year, because like Lydia33, I don't have a scanner.

Yes, 1120S was created & transmitted on 1/30. Ack received as Accepted 2/5. Interestingly, I received 2 "accepted" ACKS for this return. I wonder what THAT means. Lucky (I guess) that this was my own S corp filing!

Yes, you should check your preference settings. And for the return that is "Held" go to the E-File Manager and mark that return. Then using the drop down menu for E-File, click on Release Marked E-Files. After that you should be able to transmit that return.

I haven't updated today, and I haven't customized anything yet. That paragraph is still in my letter.