Pacun

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.

If the person doesn't hold a green card or US citizenship, the money paid by the colombian government is not taxable. Other income (rent, interest, dividents, etc) that are from US sources will be taxable.

We know you gave copies, but that's the first thing they will tell the IRS. The reason I brought this to the table is because I was on an audit and the auditor asked my client... Did Mr. Pacun give you copies of your return? My client replied yes. I wondered if I was going to be penalized if my client said "No". My friend went to an audit and he said that the tax preparer didn't give him copies and the preparer was penalized $50 by the auditor.

How about if these people go to the IRS and say that you never gave them their copies? Would you be penalized $50 for each year by the IRS?

Are you sure sch C is not required? Open up sch SE and see what you can do.

Your only hope is to have the kid come to your office and file for him. If his income permits, she will qualify for HH, if not, she won't. Make sure you have him sign a clause stating "this is all the income received in 2007". Keep in mind that only the tax payer is the one who knows how much he/she made. Also, you are required to get the information from the taxpayer NOT from parents, specially when you are not talking about a little kid.

If he does not qualify for lifetime learning, he can use Sch A with the 2% floor. (Provided it was required to maintain his job qualifications).

He is not required to file. No need to file extension... unless you want to bring his UK income which for sure is excluded from US tax based on tax treaty.

Other benefits. State returns are approved very late for paper filing but are approved for efiling as soon as tax season starts. The future is efiling Saves trees.