Pacun

Need help with W-7 and filing tax return. My client married someone from Poland Oct of 2007 She came into the country June of 2007. In the process of getting green card to work.

So do I file the return MFJ and attach the W-7 to the return? or do I have to file extension and wait for the tin number before filing the return. This is my first one. any help would be appreciated. The return is all ready to go then he mentions he is now married.

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

I need some guidance with the 1099 A. Should I wait until I get a 1099 C before filing the 4797 and schedule D. In other words, do I report income even if no 1099 C has been issued as yet. This is rental property that was abandon. Box 1 - 4/9/07; box 2 - 52,473; box 4 - FMV 28,563 and box 5 - yes.

I read where the FMV of the property is the selling price and as a result, those forms must be filed for 2007.

Thanks for all your help, you've been great!!

jacksorh

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.

and I also see where it states the MFJ filing, it also states "for 2006"....so this year I guess they will file whichever way is better? MFJ or MFS...Correct?

...However, they have lived apart for the last 6 months of 2007, so I suppose they could file single and HOH?

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

OK...I finally had time to really read this document...and it is NOT a divorce decree...It is a Separation Agreement...does that make a difference?

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?

You can't amend and go from MFJ to MFS, can you?

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".

Client is 60 yrs. old. Factory he worked at shut down and he took a total distribution of his 401K. Under the "exceptions" on form 5329, Code 01 states: "Qualified retirement plan distributions (does not apply to IRAs) if you separated from service in or after the year you reach age 55 (age 50 for qualified public safety employees)"

Would this qualify in this situation?

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.

Michigan

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.

I HOPE CERTAIN OF YOU ARE KIDDING ON THIS POINT.

Just because your client DID NOT ISSUE a 1099, doesn't make the

payment nondeductible.

HOW IN THE WORLD are you retaining clients with that attitude?

Booger

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.

"he can treat it as a gift and not deduct"

YOU ARE KIDDING RIGHT?

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.

I have a new client that works for the Colombian gov't, and gets paid here by the Colombian Govt. She has an A-2 visa and I am unsure if the monies she makes is taxable in the US? Your help is appreciated.

Bardon719

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.

Well, I DID give them their copies, ("give" being the key word here) so I guess it's their word against mine. How would I prove something like that? I would not put it past them to do that...

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.

Former client, never paid me, comes in today needing copy of returns, per the lawyer. Seems hubby is in some sort of trouble, and needs those copies in the worst way. I remember him well, I did five returns in one year, cause he was "behind" in filing. He PICKED UP the returns, apparently filed them, and actually bothered to come in a few weeks later to tell me he would pay me soon.

I tell wife, "No, ma'am, I will not make copies until I get paid the $385 you owe me."

She gets huffy, and says, "Are you telling me that you won't make me copies of OUR tax papers?"

Me: "No, I am telling you that I gave you YOUR tax papers, you did not pay for MY work, so I am not making copies of my work and giving them to you."

"Fine, I will just call IRS and work around it."

OK, I know I was a total moron to give them the returns the first time. But I am sitting here amazed that she is actually mad at ME now! Happy Monday!

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?

On the 1099-Misc input, there is a box in the upper right which says to check here to transfer amount in Box 3 or Box 7 to 1040.

When I check the box, nothing shows up on the 1040. Am I doing something wrong?

If I put an amount on Line 21 subject to SE tax, how do I indicate that?

Bob

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.

>>is there something I can do here?<<

You can return his receipts, thanking him for keeping such good records, and explain how the lifetime learning credit works.

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.

This is the rule for filing a form in DC

Who must file a Form D-30?

Generally, an unincorporated business, with gross income over $12,000,

must file a D-30 (whether or not it has net income). This includes any

business carrying on or engaging in any trade, business, or commercial

activity in DC and receiving income from DC sources.

• T o determine if you need to file, please note that gross income

includes revenue from all DC sources after deducting the cost of

goods sold, but before taking expenses and other deductions allowed

when calculating net income.

• T he act of carrying on or engaging in a trade or business in DC is

determined by the nature and extent of the unincorporated business’

activities in DC conducted by: its owners; members; or through

employees, consultants, agents or other representatives.

An unincorporated business with gross income in DC of over $12,000

from any of the activities listed below, must also file a D-30 return.

• Rental of real or tangible personal property; or

• Leasing of real or tangible personal property; or

• A ny other similar arrangement.

It also reads...

When do you not have to file Form D-30?

• It is a trade, business or professional organization where:

- 80 percent of its gross income comes from personal

services actually rendered by owners or members of the

business; and

- Capital is not a material income-producing factor.

T he 80 percent requirement is met if the activities of your

employees, consultants and agents have or are presumed

to have produced gross income for the business in an

amount at least equal to the gross amount paid them.

The 80 percent test is not satisfied if the amount paid

these persons exceeded 20 percent of the business’ gross

income. If this test is not met, the business is not exempt

from DC taxes and must file a return.

Now, I have a couple of questions:

I am a preparer and make $20K yearly, do I have to file? (Sole Proprietorship, Fed Sch C filer)

How about a lawyer who makes $250K? (Sole proprietorship, Fed Sch C filer)

How about someone that rents out a room for $1100 monthly? (rent collected in 2007 is $13,200)