cientax

When I loaded my ATX software I only selected two states. Now I need to select a third state. Does anyone out know how I would go about doing this? I've been on hold with ATX support for at least fifteen minutes and still waiting.

Rural mail carriers that receive a qualified reimbursement cannot use the standard mileage rate and must use actual expenses. I've never had a rural mail carrier so bear with me and don't call me a dummy, please. Are they still required to have the actual miles to determine quaulified expenses? And is depreciation limited to the maximum for the year including Sec 179?

I tried to create Efile but the system tells me that the Efile Info form on ATX is not yet available. Does any else have this problem? I finally got the EIC form that's not draft but I cant create Efile. Ii even tried it on a return without EIC and still can't create.

Never mind!!!

"But the fact that he was in Texas had nothing to do with issuing the check. It was purely his own decision to be there." The client LIVES in Texas and so is his recording studio but the production company is based in California. And he does not have control over the funds as to when they are to be mailed.

My client called the company to ask in which year they were going to report the income. They have no idea and weren't sure if it would be reported in 07 or 08 since he received it in 08. Below is the results of a court case a few years ago. It is also possible that the company is on a fiscal year or is accrual basis and could possibly report it in 08. There were two other courts cases that I also read. One case where a baseball player won a vehicle after playing in a game in WI but the vehicle was in NY. He won the vehicle in one year but didn't pick it up until after the beginning of the new year. It was considered constructively received in the new year. "The United States Tax Court more concisely articulated the doctrine of constructive receipt in Davis v. Commissioner.4 The court stated that for income to be constructively received, the funds must be made available to the taxpayer without substantial limitations.5 At issue was whether or not a taxpayer faced such substantial limitations when a check was available to her at the post office on the last day of the tax year after the mail carrier attempted to deliver the certified letter containing it to her home earlier the same day. The taxpayer was not at home when the first delivery attempt was made and the carrier left a note that the letter would be at the post office for her. The taxpayer retrieved the check from the post office several days later, just after the new tax year began. Courts had previously held that when a taxpayer makes a decision to be unavailable to take delivery of a check, then they will not satisfy the substantial limitations requirement and they will be deemed to have had constructive receipt at the time of attempted delivery. However in this case, the court noted that the check sender specifically informed the taxpayer on a prior occasion that the check would be arriving approximately two months later than it actually did. The taxpayer had no notice to expect that the check would be delivered; therefore she could not have made a decision to be unavailable to take receipt.6 The court held that this lack of notice, under the circumstances, meant that she faced substantial limitations on the availability of the funds and that they were not constructively received during the first tax year.7"

Client received check this month on 01-07-2008 in the mail. The check is dated Dec 26, 2007. The check was received in the mail here in Texas and it came from California. The income IS taxable to him. Any opinions as to which year to include as income. He is cash basis taxpayer. The money comes from a production company that pays him royalties for a song he wrote. The checks are distributed quarterly and the money is not available to him prior to the distribution.

New client C-Corp with three shareholders. How do you record these transactions in the books. One shareholder manages the operating checking account and the others handle the other checking accounts for payroll and taxes. This is a commercial roofing company. The one that handles the operating account will sometimes write checks to one of the other shareholders in their name, they then cash the check and buy job materials and pay for them in cash. They bring in the receipts and the cancelled checks are returned by the bank once cleared, but the receipts don't always total to the amount the check was written for and no monies are refunded to the checking acct. They will also sometimes write checks to a relative (nonshareholder & nonemployee) to go buy materials and pay cash for the materials and again the company is not reimbursed for any left over monies. How would you record these checks in the books? As job materials? As owner's draw? As petty cash? I'm at a loss, Can anyone help. Thanks.

I have a client musician that lives full time in Texas where there is no state income tax. He travels to other states all over the country at different venues to perform. He receives a 1099MISC at years end for his performances. Is he required to file state income tax returns for each state that he performs in, where there is state income tax? Also, if he receives royalties from California for his recordings, is he required to file a CA income tax return even though he is not a resident of Cal? Thanks.

My client doesn't have his copy of the 1099 so we got a print out from the IRS to work from and it gives the information stated above and there is nothing in box 5. Since there is not a check box for Roth IRA on the 1099R, do I just not worry about it? Also, when I fill in the 1099R on ATX, it carries the amount of $8000 to 16a and $8 to 16b for pension an annuities. When I fill in the 8608, it carries only the $8 to 15b and nothing in 15a for IRA's. Do I just not fill in the 1099R and only use the 8606? Thanks.

I have never had anyone take a distribution from a Roth IRA and don't know how to enter on Form 1099R in ATX. There is no check box for Roth IRA on the 1099R in ATX and the distribution code that I have from the income information provided from the IRS states: "Distribution from a Roth IRA in 1st 5 years". This was a total distribution of $8,008 and he is under 59.5 and this was not a conversion. I believe that $8000 was what he contributed. Can anyone help on how to input on return? Thanks.

It may have been partly ignorance but he was going thorugh divorce at the same time he was closing and selling his business. He had no employees and this was the only time he was ever late filing the form and the plan was ternimated after selling the business and he no longer has a filing requirement. He was also having to travel out of state and over seas to visit his sick mother. He is the one writing the letter and the form has been filed even though late. I did tell him to explain his situation during the period the form was due to be filed. Hope he does get it abated, he's really a nice person even though he's very greedy he does not have bad intentions. He's not a client of mine but a former employer of my wife but still keeps in tough.

Does anyone have a typical letter that can be used or a format for requesting abatement of penalties on a 5500EZ. They are being penalized $25 per day and it is up to about $15,000 as of today. The 5500EZ has been filed but the penalties still remain. There is no tax to pay on the form, it is informational only.

Thank you, I just did it the way you responded and that's what I was looking for. Two weeks ago they had even a different new format that was even more confusing but they have since changed the format to make it easier. I did complain at that time and maybe that's why they changed the format. Thanks again.

Have you tried the new format that the IRS now has online for applying for EIN? If you check the box for S-Cor or Corp, it will not let you enter LLC after the entity name and it tells you you can not enter LLC if you checked S-Corp or Corp.. There is now a separate check box for each of the following LLC, for S-Corp and Corp boxes. What one lady at the entity section told me the other day was to get the EIN and check the box for Corp then make the S election using the 2553, but this morning another lady there told me we had to file the 8832 then make the S election on 2553. But the 8832 instructions say not to file 8832 if making S election.

Have a newly formed LLC with husband and wife members. They filed the articles of organization and have received their charter. Now they want to be treated as S-Corp. We called the IRS entity line and they said that the Form 8832 must be filed first then make the S-Corp election on 2553. However, the instructions on the 8832 says not to file the 8832 if wanting to make the S-Corp election. We are trying to apply for EIN for the LLC but to make the S election, wouldn't we need to check the box on the SS-4 for a corporation then make the S election? If we check the box for corporation, we cannot enter LLC at the end of the name of the entity. The EIN entity section is no help.

That's what I wanted to hear in a sense but now it (net income) will be subject to SE tax which is not what he wanted, BUT that's life I guess. Thank you for your help.

You gave me some of the information I was looking for but can you direct me to a site on how to handle this if he receives a 1099 shown as royalties? The company he is contracted with told him that the money was going to be reported as royalties. He did state that he has been filing as self employed but has since incorporated but not until after he received the money. Another problem that may exist is that the contract is in his persoal name and not in the name of the corporation.

Does anyone out there have a professional musician that makes big money in a recording contract I have anew situation and have questions on what to do. Please email me at [email protected]

Potential client is sole prop and is wanting to convert to S-Corp. Has about $110K in depreciable assets used while self employed but now wants to use them in S-Corp when he converts. Is he to transfer the assets directly or is the S-Corp to purchase the assets? Is the basis to remain the same if a direct transfer occurs or will the basis be the purchase amount if the S-Corp is required to purchase the assets? The individual purchased the assets in 2006 as sole prop and deducted Sec 179 on these assets, he would have to recapture the Sec 179 on his personal 1040 return in disposing of the assets. Could the S-Corp use Sec 179 again for 2007 where it would flow through the K-1 to the shareholders?

Never mind about the 121 exclusion, client owned the home less that two years and does not qualify for reduced exclusion because he does not meet any of the required criteria.

If Section 121 was available in 2001, how would I get the exclusion, if any, to work on the Sch-D for 2001? Any help please!

Q: When did Form 2119 become obsolete and when did section 121 exclusion become law? I'm asking because I have a client that did not file 2001 return and sold his residence in 2001. IRS did SFR for that year and we are trying to minimize his liability. IRS is taxing him on the entire amount of the sales price. We don't have any information on his selling expenses but we do have the information on what he originally paid for the home. Should we just report this on Sch-D and let him pay the cost for not keeping accurate records and for not filing? No way we can get the information for selling expenses. He did not buy another main home.

If you are using ATX program, there are tabs on the asset entry form to add more assets whre you enter the asset information. You can also just rollover the tax return from 2004 to 2005 then rollover to 2006 and the asset entry form will cary over.

Could you clarify what exactly you are trying to do please? You are not giving enough information.