Pacun

I think the new regulation states that you can readjust to reflect the life expectancy of the new ower. I am not sure if you can or you must adjust.

She should wait until she is 59.5 years old so she doesn't pay penalty. Remember that she would have a basis is the decedent had a basis on the IRA.

If your client accepted the IRS assessment, and paid accordingly, that becomes the original filing and any change would require a 1040X.

So you think the statue of limitations will be 10 years after the IRS assessment. I think you are wrong. I know we are NOT taking about the statue of limitations here but always keep in mind that the statue of limitations starts at the original filing if no more income or tax is added.

I have a client who purchased a house 18 months ago. He could not continue making payments on his house and forclosure was his only option. No only he lost his down payment money, his house and whatever mortgage payments he made but next year he has to pay taxes on the debt forgiveness since his house did not cover his mortgage loan. Is that correct?

I think you should not amend.

You can hire ERC to do for you.

Oh well, more to get paid for. And my job is trying to get me to go to 40 hours a week......and this will give them more ammunition.

The problem is that most clients will not come back to you if they receive a letter from the IRS. Clients think you made a mistake and that's the reason why they received the letter.

Let's say that your client owes 1K to the IRS and he will be paying $200 per month. Do you really need a payment plan or just make those payments until you finish? Will the IRS try to collect that $1K if you respond to their first letter with a $200 payment?

I would not work with this client but if you feel the need to work with him, ask him to get his bank statements from December 2005 until January 2007. When he brings that in, you can make a decision to amend or run away from this "nice, poor victim".

It is my understanding that PLRs are very expensive. Has any one requested one? How much did it cost? How long did it take? How much tax did you save? was it worth it? Any information and/or experience you might have on this topic is welcome.

Isn't this forum lovely!!!???. I asked this question about a month ago and JOHNH gave me good information about my problem and now KC put the icing on the cake!!! Thank you both.

No. Your clients have not filed and therefore you just need to file 1040. Remember that the IRS does not file for clients. In order to file you must file the main form (1040, etc) and that form must be signed by your clients. No matter how many letters or other forms you sign with the IRS, you still have NOT filed if no main form was signed.

That's right. I have never purchased early. I always wait until at least christmas.

Question:

Fred is a very disruptive child. His parents have arranged for him to attend a military school to give him a more structured and disciplined learning environment. Is the school tuition deductible as a medical expense?

Answer:

No. You cannot include in medical expenses the cost of sending a troubled child to a school where the course of study and the disciplinary methods have a beneficial effect on the child's attitude if the availability of medical care in the school is not a principal reason for sending the student there. Utilizing the resources of the institution to alleviate the medical condition must be the principal reason for the child's presence there. Any ordinary education received must be incidental to the special education provided.

You can include in medical expenses the cost (tuition, meals, and lodging) of attending a school that furnishes special education to help a child to overcome learning disabilities. A doctor must recommend that the child attend the school. Overcoming the learning disabilities must be a principal reason for attending the school, and any ordinary education received must be incidental to the special education provided. Special education includes:

Teaching Braille to a visually impaired person;

Teaching lip reading to a hearing-impaired person; or

Giving remedial language training to correct a condition caused by a birth defect.

In another example, the IRS ruled that the tuition paid by the taxpayer for his children to attend a private school was deductible as a medical expense. In this case, a physician diagnosed the children with severe dyslexia that handicapped their ability to learn. The private school provided a specialized education program designed to teach the children to deal with this learning handicap eventually permitting them to continue their education at a regular school. This was allowed as a medical expense under IRC Sec. 213 [Ltr. Rul. 200521003].

Thanks.

I got this yesterday. It seems you still have ten days to enter the contest.

"We know you usually wait until later in the year to renew your ATX software for next season. So we wanted to give you a special reason to renew now. If you renew by June 30, 2007, you'll not only get 10% off on the price of your software, you'll also have a chance at winning up to $5,000 cash. That's because we're extending the deadline for entering our special contest until June 30. Renew by then, and you'll be eligible for one of three prizes--$5,000, $3,000 and $2,000."

They include the names of the 3 winners from the previous contest.

Gene,

I think more that 2 monitor is extravagant on our field. Just a thought.

Just make sure you do not depreciate your third or fourth monitor because you are crossing the ordinary and necessary line.

How can you rent something for rental income and not have schedule E? Let's say you do it for 10 years, other income is casual income and in this case it seems to me that it is profitable rental activity and therefore, rental income.

Yes. Only one mouse. This is the short answer to your question.

In reality you can have as many mice as you want connected to your computer, but you only one cursor.

Are strike benefits included in earned income for purposes of the earned income tax credit?

Yes, strike benefits are considered earned income for purposes of the earned income tax credit. Rev. Rul. 78-191 states that earned income includes strike benefits paid to union members who picketed even though the same benefits were paid members who didn't picket.

SORRY I meant "Interesting tax question about earned income" as the title, it seems that we cannot edit titles.

I thought the whole thing was inheritance... but I guess you are right.

I think you are forgetting something important... Dead people do not give gifts.

A translator has an office that he rents from landlord. IT guy wants to rent a desk and assist clients 4 hours a week on premises. Translator will charge $200 per month for the rent of office space and desk. Translator files Schedule C and where will he report the $200 monthly he will get from IT guru? Sch E? Will translator get away with not paying SE taxes on this income? Keep in mind that translator will deduct full rent against his schedule C.

Your main concern here would be the FMV of the house at the time of death. If it was sold to a non related party then the selling price will be enough since the property was sold before the 6 months alternate valuation kicked in.