Pacun

Client lost 2 homes last year. One was rental and the other was primary residency. Bank sent him documents showing FMV of the rental property of $340K and Debt $350K. Residency had a FMV of $470K and debt of $495K.

President signed a law that my clients will not pay taxes on the debt forgiveness on the primary home but I am not sure if the rental property qualifies.

Also, how do you dispose of the asset on ATX program?

Not necessarily. Remember, only 100,000 of home equity debt is deductible as qualified home mortgage interest. Out here in CA, you could have blown past that amount in a couple of years when the housing market was hot. For example, if I bought a home in Clovis CA in 1997 (5 bdrms on 2 acres with horse corrals) for about 250,000, it very easily could have been worth 600,000 in 2005. Say I refinanced for 500,000, using all of the proceeds on other than home improvements, I can only deduct the interest on 350,000 (250K acquisition debt + 100k home equity debt). This is the law regardless of AMT implications. If in AMT, then it gets worse, because no Home Equity debt is allowed.

Hope that helps

Tom

Lodi, CA

[/quote

On your example, condition number 4 was not met.

"This is true only if ALL 4 things hold true....

1.- Taxpayer is affected by AMT

2.- They refinanced

3.- they took money out when they refinanced

4.- They did not use all the money on improvements to the same home."

Solution: patience.

Some clients have more data to be processed than others. Without giving us some time to compare, we wouldn't be able to help.

Am I correct?

This is true only if ALL 4 things hold true....

1.- Taxpayer is affected by AMT

2.- They refinanced

3.- they took money out when they refinanced

4.- They did not use all the money on improvements to the same home.

We have already had a dozen calls asking: "Do we qualify, and how much will we get?"

I have been telling them to ask their senator, congressman, or the IRS.

When I get this question, I say... "as soon as you get the check on your hands, you call me and tell me how much you got, in the meantime, just make sure that the IRS has your correct address"

1040ES

I feel good today, I donated to this forum what I charge for a simple tax return. This forum provides me with free help when I need it and I think that now that I making some money, it was time for me to donate something.

I was waiting for the simplest return to arrive this week. I got one yesterday and it took me only about 10 minutes to complete. I charged them $$$$ and I donated it. It feels good to remember this forum when money comes in.

The rule is that if you have subcontractors that do not have a valid number or a non-existent number, you have to withhold 35% of what you pay them and send it to the IRS. (please verify % amount). So, if you pay $1,000 to a person without a number, you have to send him $650 and $350 to the IRS. Most people will not want to deal with him if this is brought to the table.

Since the year is gone, he might not be able to deduct it.

I think some other people will reply to your posting with other approaches.

I made a mistake on my previous post. I corrected and this is what I mean.

"I have another question. Will this rebate decrease the amount of the taxpayers refund for tax year 2008?"

No, the president made it clear that it was in additional refund and recapture was NOT going to happen the following year.

His own number (I mean, the person that got paid). I am a citizen of another country and I have a social security number.

My suggestion is that you state your questions with details so you don't ask one question at a time.

"I have another question. Will this rebate decrease the amount of the taxpayers refund for tax year 2008?"

No, the president made it clear that it was in additional refund and recapture was NOT going to happen the following year.

It seems you had 2 problems and you have switched between the 2 along the post. (Problem 1, with the low income credit and problem 2, the hold state preference).

My understanding is that a married couple that makes 100K and have two children will get $1,800 ($600 for each filer and $300 for each child). I have 2 questions...

1.- what year will be the base to determine the head count, 2006 or 2007? (So clients that were not required to file should file on the base year so their head counts).

2.- what happens if a family has 6 children and makes $100K?

I noticed a little change in the input sheet. For joint accounts, both names and SSNs are listed. Does anyone know if this affects efiling. I assume it's ok. Will find out soon anyway.

Please let us know what happens when you efile.

What the employer did is illegal here in DC, so if this client lives in a state that it is illegal to ask employees to repay for their mistakes, no deduction allowed.

The guys with the costums are not tax preparers but homeless people that get paid a few bucks per hour (some of them are not homeless, though). I had one Liberty Tax office 1/2 a block from my office in DC but they closed the office because they were paying about 5K for rent per month.

"It might even generate itemized deductions on the state return."

For my local states, if you do not itemize on federal, you cannot itemize on the state. Are some states different on this regard?

discard the ofending form and bring it back. I would start with the credit form, if the problem is not solved, I would continue with the main VA form (760CG).

If you were a crook, as the other tax preparer, and filed as HOH for her too, the benefit (rip off) would be greater. The $35 difference is because you filed MFS.

You claimed it when you went to school, right? If you didn't make any money, whoever claimed your exception could have used it when you went to school. Even if you pay now, you will not be able to deduct it. You might be able to deduct the interest on student loan on the year you fork out the money to pay the interest.

File regular 1040 MFJ and attach W-7 with his passport and send it to Austin, TX. If you prefer, you can make a notarized copy of their passport. Hold on to state filing until you get the ITIN from IRS.

If you send the passport, in one month he will get his passport back, a week later, he will get his number 3 weeks later they will get the refund, if any.

Company reimburses $6,000 or whatever the IRS limit is. Company uses fiscal year that ends June 30th. Employee spent $6000 in tuition and got reimbursed in 2007, but W-2 does not show that amount because it was reimbursed after June 30th. Employee will graduate before June 30th 2008 and will spend another $6,000 on Tuition, which will not be reimbursed because of IRS limit.

In 2007 employee got reimbursed $6K but W-2 shows nothing. In 2008, employee will get nothing reimbursed but W-2 will show $6K that was reimbursed. In this situation, employee will be get reimbursed 6K and he will be able to use 6K for education credit.

I know I have to follow the rules regardless of what the W-2 reads but that leaves room for an audit. Any suggestion?

shut down your computer, boot up and wait for your computer to completely boot up. Click on ATX and be patience. Wait 10 minutes. If it opens, you need to upgrade your computer.

If you have weak computers, DO NOT roll over all your clients. Roll over as needed. Also keep in mind that back up need to runs from time to time and that only happens when you close the program.

Eli,

"No es la culpa del indio, sino del que lo hace compadre".

Some of us when we check returns prepared by other preparers, we want to impress our clients by putting down other tax preparers. This time, maybe the other preparer will put you down, even though you did a good job on the return. When I get a call from people trying to have their tax checked because they didn't get enough money, I tell them... "if you feel that you are not getting enough money, I think your taxes are prepared properly, but you can bring them and I will check them". If they come to my office (and without opening their copies), I ask them. "How many jobs did you have? If you work on your own, you have to pay taxes on the money that you made (notice my phrasing “pay taxes”), if you were a babysitter, you have to pay taxes on the money you made... after they answer these questions, I open their return and I check it. 99% of the returns are accurately prepared and I tell them... "Based on the information you provided to the preparer, your tax return was properly prepared". I add, "There is no legal way that you can get more from the IRS and if you do, you will be committing tax fraud and can be put in jail". When I hand their copies back, I tell them... "Your tax preparer did a good job on your return".

As professionals, please do not put down other preparers just to get move clients.

Believe me, next year, they will do the same thing to you, they will take your return to other preparer and the cycle goes on.

Up to 10K could not be subject to penalty to a first time home buyer if used to purchased a home. The house doesn't have to be new, but the tax payer has to be a first time home owner. As you know, some people who had a home and sold it could be first time home buyer depending on the states involved or the time lapsed.