Pacun

Good point.... BUT why do you want to deviate from reality??? The truth is that she doesn't pay rent. I would go with intent and reality (both are the same since parents did not intent to collect rent from daughter).

Depreciate 75% of the structure, 0 for the land and take 3/4 of utilities, taxes, mortgage interest, insurance, etc. The other 25% will be considered personal use of the owners, which might fit on schedule A (taxes and mortgage interest).

It must be new.

Thank you Linda. I am reviewing the information and hope some one else replies to my question.

I have a W-2 from the Postal office with entries on box 32. TP is a rural mail man and purchased a jeep and moved the direction wheel to the right. TP is getting his last pay check stub and I will check if what he got reimbursed for miles, is added back to box 1. In any event, can any one tell me how the postal office does its calculation? Can I depreciate his jeep? Any information about this will be appreciated.

Good suggestions. Also, other employees might not be affected by this if they made less than $87K from this employer or made more than $89K from all employers including any Sch SE in 2006. Of course medicare doesn't have a ceiling.

You should mention how much he made so we can suggest you the best course of action. If he made $6K, there is no need to even mention the ITIN on the thread. If he made $20K, maybe. If he made $30 and paid more than $15K on mortgage interest, there is no need to mention the mother. As you can see, I am assuming a lot of things here, since the question came from a TAX PROFESSIONAL, it also bothers me the fact that you do not put all related matters on the table. You file as HH (based on the information you have tea-spooned out from the barrel). He is living with his child and he is providing more than 50% of his/her support. Again, if he made less than $10, it does not matter if he files HH or single with one dependent. Also, if he made $20K and paid $12K on mortgage interest and $2K on real estate taxes, it doesn't matter if he files HH or single with one dependent.

Yes, they will not pay penalty on $20K if both are firts time home buyers.

Each state has different rules. If you sell a house and you move to another state and buy another house, you are considered a first time home buyer. If 3 years have passed, you are considered first time home buyer.

Client is single and owns a house. I itemized on Federal but it seems that West Virginia doesn't allow itemize deductions. Is this correct?

Keep in mind that you filing last year's taxes and therefore your client was 60 on December 31, 2007.

Since no one provided more than 50% of mom's support, have son that got the 1099int claim her as a dependent and 25% of the $42 of medical expenses should go to sch A (provided they are using house money to pay for medical expenses). Basis of the house should be her basis plus improvements. If any of the children lived with her, that child should be able to exclude the gain if he lived there for more than 2 years in the last 5 years prior to sale. By the way, whose taxes are you preparing? Ask other sibblings to sign form so that your client can claim her exemption.

The only thing I can think of is that you are entering an amount lower than 297 (just as you did on your posting "oops typo its 297 not 257") I have calculated and everything works.

Try delete and roll over from correct name. Sometimes I have two clients with the same name. Also, open the 2006 program and verify that all the forms are there.

ATX rejects any created efile when you save again. So, I guess you did your tax planning and recreated the efile. You must amend if it is not rejected for other reason.

1.- (answer to question 1) You don't report the sale of primary residence anywhere if they had a loss. 2.- Not deductible since the apartment rent is a personal expense. Husband will have moving expenses (transport expenses for himself and his belongings). 3.- Seller needs to file a gift return and taxes (most likely) will be killed by the credit. Niece's basis on the house should be reduced by gift amount and that's it.

Interesting point Jainen. By the time the bank is finished with this guy, this guy will owe the bank more than 10K. Bank charged about 4K to my friend because he was late with payments and the bank sent him a foreclosure notice. If lawyers had repossed the house, I believe my friend would have owed more than $10K on attorney fees. Also, I think the bank will sell his property for less than the FMV and I believe there is a clause on loan application to cover the bank's position. So the 1099-A is a document just to show the ex-owner that he doesn't have any rights on the property anymore.

Thank you Linda. In my client's situation, it doesn't matter which house he can use on 982 because he will get a 1099-C for both. The difference between one 1099-C and the other will be about $2K, which is not much.

I agree, you don't enter anything on line 21 unless this was not his primary home and no need for 982. I have a related question. Client owned and lived in a house for 2 years and 2 months. He purchased a second house and move to it. He rented the old house for 3 month and they he walked away from both houses. He lived about 6 months on the new house. On both houses, he will get a 1099-C showing that he had debt cancellation. On the first house, he didn't report a gain because he used the 2 year exclusion because it was his primary residence. This year's Sch D shows a profit on the older house which is wiped out by the exclusion and a personal loss on the new house, which is not deductible. My question is, which house will he use for form 982 since he will get a debt cancellation for both houses?

File the return based on what actually happened or the actual intent on the date of the transaction.

Nice catch. I am assuming that she meant that the sale occurred in 2006. Regarless of whether the son and daughter were renting, they didn't own it for 2 years.

Let's assume, parents bought house for $300K and sold it for $450 eventhough the house was valued at $550. If parents sold the house for $550, since they lived in the house for more than 2 years, no taxes would paid. Currently, child has a short term gain of $100,000 and you want to see if filing a gift tax form, his gain dissipates. His basis will be the same even if mother files a gift tax.

It seems a pretty straight forward return so amending shouldn't be a problem. She should get EIC for both years if salary is low and no one claimed her.

Please verify date of birth as stated on my previous amended posting.

ANY program will not calculate EIC if date of birth is not entered. So, I believe previous preparer didn't enter her correct date of birth. You are correct, take the credit. ALSO, being 27 now means nothing regarding previous year. Give date of birth so we can assist properly if you want to amend.