jklcpa

Before 2008 it was $50 per month per partner. Believe that was capped at 12 mos. For returns due after 12/20/07, raised to $85 per month per partner, max 12 mos. Tax yrs beginning in 2009, it goes to $89, but you should be OK for that year. For returns beginning in 2010, it becomes even more severe @ $195 per partner per month, 12 mo cap. Yikes! don't let them be late again. Without interest, that's $3,000 for each year from 2003 - 2007 and $5,100 for 2008. It's for a month or part of a month, so there's not even a little break for 2008 even if you could get it done by 3/31/10 because we're already in the 12th month overdue from 4/15/09. Late filing penalties will total $20,100 if my math is correct. Interest is calculated on the penalties using the quarterly rates in effect at the time. They could also be charged with failure to furnish K-1s timely. Sorry don't have fresh #s for these handy without looking them up. IIRC, it used to be $50 per K-1. If intentional disregard, that bumped up to the greater of 10% of aaggregate items or $100 with no cap.

Kea's link goes to the home buyer credit. Here's the link to the economic recovery tool: https://sa2.www4.irs.gov/irfof-mwp/start.do Don in Upstate NY also posted this in another thread.

Out of curiosity, how do you all handle the AMT exemption when preparing your clients' 2010 tax projections? Do you use the $45K that it will revert to without a patch, or do you assume that Congress will extend and keep the exemption high?

You need the contract of sale to see exactly what is being purchased. Unless this was structured as a stock purchase, that contract should include the purchase of equipment and fixtures, patient list, goodwill, receivables, any debt assumed, etc. Also ask your client to contact the seller to see if their tax preparer included Form 8594 in the tax return for the year of sale. That form is used to report the allocation of the sales price to the various classes of assets sold or purchased. The seller and purchaser both include this form in their tax returns and the numbers must match. Once you have the breakdown by class, you need to further allocate the total price for fixtures and equipment to the individual assets so to begin depreciation. You also need to breakdown the total assigned to the intangibles to properly calculate amortization. The full $200K is recorded on the books of the purchaser, however it is allocated. $50 cash was paid out, and the remaining $150 is recorded as a note payable.

Crank, here's a link to PA guide to individual taxes that will help you: http://www.revenue.state.pa.us/portal/server.pt/community/revenue_home/10648 Clicking on the first link to a PDF is for chapter 24 of PITGuide. The discussion of cancellation of debt starts on pg 7.

Yes

Yes, the full benefits received in 2009 will appear on 20a no matter what year they are for. The idea of the lump sum worksheet is to calculate the tax as if it had been received in the earlier year. The lump sum calcs are beneficial if the taxpayer is in a lower tax bracket during the earlier year to which the lump sum payment is for. If the taxpayer is in the same bracket for both tax years, usually the tax will be the same using both methods.

Partnership had break-in and theft of business equipment in mid-2009. Insurance claim was timely filed and the claim was paid in 2009. Sec 179 was taken on all stolen items, so -0- basis. In Dec 2009 the police recover and return some of the equipment directly to my client. In Jan 2010 the insurance co accepts $1800 from my client as a buy back of some of the equipment recovered. The client has all of the recovered equipment, but the $1800 was only for a couple of the items. The insurance agent told my client that they will probably never hear from the insurance co about returning the other equipment not covered by the $1800 buyback. My questions revolve basically around "netting" what happened. This is what I'd like to do: 1) Report the insurance claim received net of the $1,800 paid in the buy back 2) Report only the property not recovered as being stolen, remove only those items from the fixed asset schedule and report the gain. 3) Leave the items recovered on the fixed asset schedule. Technically they were out of service for a few months, but they had -0- basis, so I think this shouldn't be a problem. Does anyone see a problem reporting this way, or how would you report this differently?

I have one of these right now too. Not being subject to the 2% reduction would save my client a tidy sum in tax. Is this because you are considering the legal expenses as impairment-related work expense of a disabled person? I would have put this expense subject to the 2% as any other legal expense paid for the collection of income or preservation of income-producing property.

I don't do any PA returns with multiple UE's, but after the OP I did a test through trying to create an efile. I have ATX TTO with Max. Not even having a PA return in the test, the program wouldn't let me create the federal efile with more than one 2106 in the return. This obviously needs a fix. Because elfling wasn't having troubles, I wonder if a recent update is causing this?

The "normal" way to use lines 2 and 9 of Sch D would be for entries flowing from Sch D-1. Jainen, are you suggesting overrides on these lines? Also, the OP asked about e-filing this return. Is the IRS nowing accepting returns by e-file that include the D-1? The returns that I have like this, I paper file with the broker summaries as attachments.

You haven't said exactly in what capacity the parents of the purchaser, and the purchaser himself, are related to this trust. You said the purchaser is the son of a "member". By "member" do you mean that this parent is a fiduciary or beneficiary of the family trust? The instructions for the form direct people to Pub 544 (not authoritative), chapter 2 in the section "Sales to related parties". It has a list of related parties. Perhaps that will help you make a decision.

RoyDaleOne, Further on in the OP, it says "At the time of ownership transfer my client still owed $6,750 (amount that is being pay by new truck owner." It looks like ownership was transferred, the new person taking over the payments, and this disposition should be recorded with $6,750 as "proceeds."

From pub 544: The amount realized from a sale or exchange is the total of all money you receive plus FMV of all property or services you receive. The amount you realize also includes any of your liabilities that were assumed by the buyer and any liabilities to which the property you transferred is subject, such as real estate taxes or a mortgage. In pub 544, look under the section sales and exchanges.

Is the soc sec and SE income his only income? There's the AGI limitation and phase-out, but his income if single would have to be about $81K for it to be the cause of the additional reduction.

You didn't give dates, but the holding period of gifted property includes the donor's holding period. For the portion the sons inherited, the holding property of inheritied property is always considered long-term.

Since the stock was in all three names when mom died, only 1/3 of the value should be in the mom's estate. Her 1/3 gets the step up in basis. Because that stock was purchased entirely with mom's funds, in effect she gave each of her sons a gift of 1/3 of that stock at the time they became owners. The date mom put the sons' names on that stock is important in determining their basis. If the sons became owners at the initial purchase, then their basis in their 1/3 is equal is the adjusted basis paid at that time. If the stock was 100% mom's and then she added their names later, then the rules for determining the basis of a gift would apply. If the FMV is greater than mom's adjusted basis on the date of the gift, then the sons pick up her adjusted basis on the date of the gift. If FMV is less than adjusted basis, it is more complicated. Here's a summary on the IRS site of determining the basis of gifted property. After determining the basis of each of the sons' 1/3 ownership that they got from mom while she was living, to that you'd add whatever stepped up basis they inherited from mom's 1/3.

Awesome, JB. Tell her to only take one course in frikkin. No minor is necessary. We don't want you to wait 4 years for that pie!

On the TIN, that's what I would do. I realize the ptnship didn't have the number and applied very late, but ultimately that is the number assigned to the entity, no matter what the name. Attach an explanation of the EIN assignment and the name change to the returns. Have you advised your client about the late filing penalties for 2007. For 1065s due after 12/20/07, it's $90 per month, per partner, for max of 12 mos. That's $3,240. I'm assuming 3 partners, that son and DIL are each a partner with the mom. That's if you have no reasonable cause. The partnership may also be assessed the failure to furnish information timely (K-1 to each partner) at $50 each. That amount is assuming it wasn't intentional.

Margaret, you are correct with that reference. An existing partnership that incorporates to an LLC but is still filing as a partnership simply continues to file a 1065 using the same EIN. The entity doesn't file a final return. It would be a name change only. If you are rolling over from the initial return's file in ATX for the LLC for the second year, be sure to check the name change box on page 1. Also make sure to change the entity type box on page 2 in Schedule B from partnership to LLC.

Lion, I think you are right in your reporting on Form 1065: Guar Payments, including health insur should appear on 1065, pg 1, line 10, and page 4, line 4 of Sch K. Guar Payments excluding health insur on page 5, Sch M-1, line 3 Make sure that page 3, sch K has the entry on line 13d for wife's health insurance. That could be what's throwing you out of balance, because that would affect the reconciling of the Sch M-1 to that first line at the top of pg 5, line 1 in Analysis of Income. I think your K-1 reporting sounds o.k. Hope that helps.

Happy Birthday, Taxbilly. Sorry I'm so late. Hope you had a wonderful day!

Other than 2 on extension, my return was the last one finished this year. All of it was complete in mid Feb with the exception of my husband's part time Sch C. I did that Sunday evening. We owed money, otherwise we'd have filed 2 months ago.

Thanks Linda, It is new even though a 2007 model. They bought a left over from the dealer.

Landscaping business, a partnership, purchased an '07 Chevy 3500HD 4WD with reg cab. It has a dump bed on the back, seating for 2 or 3 passengers (not sure if it's bench or bucket seats), no seating behind driver, 100% business use. Chevy calls this heavy duty, and I know this truck weighs over 6000 lbs, but I don't think it heavy duty for IRS definition because I don't think it weigh over 13K unloaded. I am always confused over how to classify this. Is this just 5 yr listed property (vehicle)? Does it qualify for the 50% bonus deprec without limitations? Cost was almost $35,000. Could I use sec 179 for the full price, or is it limited? I think my head might explode...