Pacun

We are glad to have you too! Have a sit and relax.... we will be with you shortly (maybe after April 15).

I always tell my client... The IRS will catch it FOR SURE but the auditor will read your return, then he will decide if he needs to send you a letter. If the auditor feels that he will spend more on postage and handling, he will not send you anything. You do not tell your client, "maybe the IRS will not catch it". If you do that, the next time your client will leave out a 1099misc expecting that the IRS will not catch it. Last time, a TP came to my office with his previous 3 year returns and a letter from IRS. The IRS was questioning the Itemized deductions. On the return they made $53 and the itemized deductions were $35 in mortgage interest, RE taxes and 2106s. I checked all years I was surprised that every year they made about $100K. I asked them why they made so little that year and they said "we always make about the same amount of income". I checked W-2s carefully and a W-2 for $45K was left out. The IRS was asking for a $3K payment and I told this new client, if I amend, I will include the other income and I will not use any 2106s. The client agred and we added the additional W-2. I was surprised that the auditor didn't match their W-2s. At the end they owed 6K. Another one, a client told me that he left out $142.60 from dividends. I said... I will charge you $100 to amend or you wait for the IRS to send you a letter next year and you will owe them about $55. He said, I am going to wait. Next year the IRS send him a letter demanding more than $3K because he left out $14260 (fourteen hundred two hundred sixty). So, I guess you should amend.

Any Notary Public.

File jointly and problem solved.

If they realize they are wrong, they will correct their mistake with another letter. If the boss is wrong, he commands again, we say in Spanish. They will want part of the refund back and they will try to get interest.

Ask your client to give them his/her correct address.

If both were sold together and to the same person, you only add the cost of land to the basis and you handle the sale of the house only. You only make a distinction for depreciation.

Yes, everything goes to Austin: W-7, 1040, notarized copy of passport or original passport, and payment. Use husband's social security on payment. One month later you get the passport, a week after that, the number, and 3 weeks after that, the return is proccess and refund issued if any. After you get the number, you send the state return. When both are applying for ITIN or a single person, I do not ask my people to send payment with the return. I ask them to send payment when the number is assigned. Why? Because when they receive the payment, they assign a temp number to the payment and later they assign a different ITIN to the person and then they proccess the return without any payment. It takes a couple of letters to match the payment made with the temp number and the return with the other permanent ITIN.

The exception for the penalty is to purchase your first home. In this case, they have to pay the penalty.

File MFJ missing her SS# and attach W-7 invoking the 183 day rule and send it to Austin, TX with her passport.

Get the basis of the house and report the sale on Sch D using the saling price of $28,563.

All you need is to check General partner, enter income on line 1 or whereever, then on line 14 A (second line, non-farm income) enter the self employment income. Sch SE will be populated. I open K-1(1065) worksheet and SE for 1040 and the number flow. I believe your problem is that you entering it on line 14C.

Sale was an installment sale. Only cash is involved. At the end of the day, TP will have a loss.

No. Never single for 2007. The only choices are: 1.- MFJ 2.- HH for one with the kids and MFS for the other 3.- Both of them HH if they both had at least a child living with them. Keep in mind that they should have lived apart since June 30th for HH and a child must have lived with the HH parent

Yes, it makes a difference. Lawyer is right (or at least not going againts tax laws), but he cannot force anyone to file jointly or separate. Since they have a written agreement to file jointly, I think they should file jointly.

A small business owner (bar and restaurant) incorporated his business as a "C" corporation. Shares of this entity were never publicly traded. Two years later he sold his shares to another. Does he recognize as the basis his net worth on the day of sale divided by the number of shares outstanding? Moreover, is such net worth calculated using the fair market value (or book value) of assets less liabilities? What form(s) are used?

Because I am not sure, I limited myself to... "a 1040X is in order". Keep in mind that "She has a very small income and would probably not have any tax liability".

If he was 60 years old at the time of the distribution, what more are you looking for. He only has to pay Fed and state taxes ... no penalty.

I think that after you update your profile and add your state to it, a lot of answers will come your way. In order to make the scholarship taxable, you need to know how the money was spent. Most states have a low income credit and you might not need to pay the state.

We are talking about interview techniques here. We would tell them, we are going to do it this year only... next year please issue 1099misc. Also, remember... in front of an auditor, your client will say... "no one told me that I should have issued 1099misc". If you refresh their memory by saying "remember I told that if you didn't issue 1099misc, it was assumed a gift".

If she doesn't want to cause any trouble, a 1040X is in order.

Actually, that's a good technique so our clients understand how important it is to issue 1099mis to any contractor that they pay more than $600 for labor. If you tell them, since you didn't issue them a 1099misc, it is understood that you gift them the money and you can only deduct $25.

What state are you in?

I have to defend lawyers. What the attorney meant is that each of them should have remarried by December 31, 2007 and therefore file MFJ.

I also want to thank Jainen, JohnH, KC and many, many others that keep this forum alive. I also want to thank the arquitect behind the scenes that programs this forum. Since a donation is better than 1000 words, I donated this tax season.