Pacun

Because you never mentioned that you could file jointly. File jointly and end of conversation, then. AND they will get extra 400 for the making work credit.

That's the answer to your question. Since your client is filing MFS, the credit for this tax payer will be the smaller of $4,000 or 10% of the cost of the house. No way the credit will be bigger than $4,000. Wait for the divorce and claim the 8K next year when TP files single.

The way I see it is that the taxpayer will only qualify for 1/3 of the 8K. Parents will sign the HUD-1 and the IRS will get a signed copy of it, correct?

Can I conclude that it would be reasonable for the TP to therefore claim the full $8000 credit ? Or am I missing something ?

Go to LN 4 Calc Alloc Credit worksheet and take out the entry on line 1. If you discarded the form and made only 4 entries on the new form, you should be OK.

Please make that their visas were active at the time they were working. If they violated the visa rules, they didn't have a visa anymory and they must pay taxes.

By Denise Lavoie, AP Legal Affairs Writer BOSTON — The U.S. Tax Court ruled Tuesday that a Massachusetts woman should be allowed to deduct the costs of her sex-change operation, a decision that could have broad implications for transgender people. Rhiannon O'Donnabhain (oh-DON'-oh-vin), who was born a man, sued the IRS after the agency rejected a $5,000 deduction for approximately $25,000 in medical expenses associated with the sex-change surgery. The IRS said the surgery was cosmetic and not medically necessary. In its decision Tuesday, the tax court said the IRS position was "at best a superficial characterization of the circumstances" that is "thoroughly rebutted by the medical evidence." The legal group Gay & Lesbian Advocates & Defenders, which represented O'Donnabhain, said the ruling could potentially affect thousands of people a year in the U.S. who undergo similar operations. "I think what the court is saying is that surgery and hormone therapy for transgender people to alleviate the stress associated with gender identity disorder is legitimate medical care," said Jennifer Levi, a GLAD attorney. IRS spokeswoman Michelle Eldridge declined to comment on the ruling. In a 2007 interview with The Associated Press, O'Donnabhain said she underwent sex-reassignment surgery at age 57, after a tormented existence as a father, husband, Coast Guardsman and construction worker. She wrote off the $25,000 in medical expenses on her taxes, but the IRS disallowed the deduction, ruling that the procedure was not a medical necessity. O'Donnabhain, now 65, said she brought the lawsuit in an attempt to force the IRS to treat sex-change surgeries the same as appendectomies, heart surgeries and other deductible medical procedures. "It is not OK for them to do this to me or anyone like me," she said. O'Donnabhain's lawyers argued that because gender-identity disorder is a recognized mental disorder that is generally treated with hormones and surgery, the costs are legitimate medical deductions. The tax court agreed.

I checked 2006 and you should be good for all years for which a refund can be requested.

You should be OK with the big EIC amount. You should amend at once since your time to claim the extra money is running out.

Department of the Treasury Internal Revenue Service Kansas City, MO 64999-0002 If no check is enclosed.

If I am not mistaken, these are new rules. In 2006, a brother could not qualify you for EIC.

Since they have the forms already signed for the years to come, the father should be OK claiming the child every other year. Mother qualifies for EIC every year if otherwise qualifies because the child lives with her. HOH is another ball game. She can claim HOH if she supports the child more than 50%, which could perfectly happen every year. Father would not qualify for HOH ever in this situation, unles he has another dependent. Pretty much the same thing that KC said.

Since it is a rental property, debt forgiveness will not be cancelled because he was insolvent. He will have debt forgiveness to report and a business loss.

Notary public fees go straight to line 21 with a notation.

I think I am right because MargaretMort said she was a "young woman who is Russian and was in the US on a work visa". Margaret please provide more info.

I am not sure but a template, which is already, included in the ATX program will solved your problem. I am not sure how the template will work with rollover clients, but it will work with new clients. So you create the template with all the common forms you need, and when a new client comes in, you open the template and all the forms will pop up.

If the Russian worked for the International Monetary Fund or similar organization which does not have a FEIN and is not required to get one, file schedule C and SE with full amount shown on W-2 and 0 deductions. Any deduction should done on 2106 and schedule A. Based on your situation, only statutory workers can deduct expenses on sch C.

Keep in mind that as long as someone paid or is reponsible for any loans (no scholarships or grants), whoever claims the student's exemption is the one that gets the credit. Just having the 1098-T is not enough proof according to the IRS.

If the registration is under both names, whoever paid for the taxes should take the extra deduction.

If they have proof of payment and otherwise qualify, yes.

It seems that the IRS doesn't care what happened to the previous house, so I think he could qualify. Anyways, when the bank reposes a house it is considered a sale in the eyes of the IRS. I think the 1099-C reporting the cancelation of debt will be issued for tax year 2010.

It depends on the bank. Some banks accept the deposit and then they send the money back to the IRS. If this happens, you will get your refund after you verify with the IRS that the bank got your money, then you have to go to the bank and ask them to return it to the IRS. It could take an extra month or two. This happened to my brother last year. If the bank rejects the deposit when the IRS tries to deposit it, a paper check will be issued and mailed by the IRS the following Friday. This happens when users give you the wrong account number or the account is closed (it depends on the bank).

Yes, after the sale, the LLC was liquidated. What I feel is that the person with no money invested, no work performed for the LLC will get a loss. This person never had any investment at risk neither was liable for any debts of the LLC since the LLC did't owed anyone. This is the situation, LLC was created by the 3 members, everybody agreed 3 ways for losses and profits. When there was time to buy the first property, only 2 members had money to puchase the property. To even up, the other member was going to invest heavier on the next property that the LLC was going to purchase but since the real estate market came down, there was no second purchase. The rental property had 15K loss for the last 2 years, each member got 5K loss. The previous preparer claimed losses for the two members with basis on the ONE property, and carried the loss (didn't claim any loss whatsoever in 2007 and 2008) for the basisless member, hoping that the property was going to generate a profit when sold. To me, he would still qualified to take 3K passive losses since he had other passive income. When the property was sold in November 2009, there was a 12K loss and each member got 4K loss. Am I correct to assume that the basisless partner should use 3K passive losses for 2007, 2008, 2009, 2010 and 2K loss in 2011? AND the same is true for the other two members? As always, when I am going to amend a return prepared by another person, I always want opinions from this forum.

I don't have an answer but this is an excellent question. Since your client just closed the deal, ask him/her to go back to the realtor to have a copy of the HUD-1 that everybody signed. It wouldn't hurt to have it anyways.

Thank you KC. This is exactly what I needed. So, in order for Mark to qualify for EIC, the father had to make less than $15,800 and not claim Thomas. EVEN THOUGH HE PROVIDED 0 for Tomas' support. Of course, if they were born in Oct 1991 NOT 1990 as originally posted.