Janitor Bob

So.........the little one, well call Spanky, goes to the office with dad yesterday! Spanky is in the waiting room playing with his hot wheels, so I thought.

As I'm on the phone with the software company (Really important problem being fixed) Spanky abruptly hang's up on the tax software vendor!

Then the cell phone rings, Spanky picks up the phone and hang's up on that call as well. After two hang up's the wise self says, Son why did u hang up on those people?

Cuz dad dis is my day at de office and they interupting my race! Gosh I hate it when they leave me speachless like that, lol!

JB.............do u have good sitters in mind that have a hot wheel's track for his races?

Single Dad

That is a classic! Leave it to a child to remind us what is really important in life.....and the only sitter I know that had a hot wheels race track was my grandmother. When I was a kid she would babysit for me and would take part of my hot wheels race track and spank me with it....I was an ornery kid!....Man...nothing like getting beat with your own toy!

My client was totally insolvent "at the time of foreclosure" and as I recall in bankruptcy proceedings. In my case the income was not taxable due to insolvency.

Dig really deep on this one, as the rules have changed and if I'm not mistaking there were some tax cases on this same issue as well.

Single Dad

The debt was non-recourse and client never re-financed...So debt was secured by the property only and buyer is not personally liable for the balance...thus no debt forgiveness...thus no taxable income...correct?

It's a fairly common problem, but I'm not really sure why it would all of a sudden happen.

Usually it's an IE update that causes it.

The problem started back when IE 7 became available.

Microsoft did issue some updates this morning...if your computer is set to update automatically, it may have done so during the night...and caused this problem. I disable automatic updating during tax season and set windows update to notify me when updates are available but to NOT automatically download and install them...This way I can selectively apply the most important ones and minimize the chance of problems.

Not than any Microsoft update ever created any problems....

Jainen,

You are absolutely right, and I guess I should have been more specific with my point. When I researched this issue initially it was for a client who had purchased his home and never re-financed it. I will try to be more specific in my future posts.!

Deb!

Single Dad...you had one of these last year...how did you handle it? In this case, clients are still living in the home...it is just owned by HUD and not them

So Lila and I were out for a walk and I see Chaz (the guy on the corner by Woody's Market that drinks warm Corona) and I say hi....I know...my mistake....anyhow Chaz sais to me ..."Hey....you iz gonna dew mine taxes again this year right?"....and I said "yes...certainly...when you pay me for last year."

Chaz just looks at me and sais...."Taxes iz Kewl"...and he said it with a "k" at the beginning instead of a "c"....I had never heard it spelled this way...so I did not know what to say....So I just walked away with Lila

Do you smell it?...seriously....is somebody burning sulphur?!

Thanks KC...I was still insolvent after for many months...Just now...with saving and retirement plan...becoming solvent.

KC...This form 982 is new to me.....All of the debt forgiven in this case is consumer debt (credit cards, medical bills and hospital bills, etc) and I had no actual assets or property....It appears that I would not fill out anything in parts II or III...Just list the total debt forgiven on Line 2...Correct?

In this case, would I simply ignore the 1099s received, or enter them and then enter an adjustment on the 1040 somewhere to remove the amounts from gross income?

...Or do I enter them on a 1099 Misc and just NOT have the amounts carried to the 1040?

If you were insolvent both before and after, it will all be nontaxable. If the forgiveness made you solvent, then some might be taxable. But usually in a case like yours, you will be insolvent even after the 'adjustments', and still making some payments. If so, just use the 982, mark box 1(b ) and fill out the explanation section for Part II. There is a tab at the bottom to do this.

Thanks KC...I was still insolvent after for many months...Just now...with saving and retirement plan...becoming solvent.

I am still somewhat confused on this insolvency issue. When my wife passed away in March of 2007 my assets (including life insurance proceeds) were much less than my total debt (due to her huge medical bills). I negotiated with several collection agencies to take partial payment and forgive the rest.

I had no retirement plan monies left, , no savings, did not own a home or a car.....So assets were way less than debt....can I personally avoid paying income tax on this forgiven debt because I was insolvent?

If so, is there a particular form that needs filled out or do I just ignore the 1099s that I am sure I will soon receive?

I simply have had no experience in this area with any clients, so not sure what to do.

Here's an article I dug up. It appears that perhaps with the passing of this new bill, your clients will be O.K.

http://www.realestateinvestingtax.com/shortsale.shtml

Deb!

Has this new bill passed?

A client just informed me that they went through a forclosure and that their home is now owned by HUD and they are wondering what affect, if any, it will have on their federal income taxes....Is there any tax consequences to my client? I have never personally dealt with this before.

Foreclosure was finalized in 2007

It sounds like it's updating all 10000 forms at once, Bob. In which case, you've a longer haul in front of you than you realize. The next time you open your program, it's going to appear to "stall" as it's processing those updates. Trust me, leave it be. It needs to process 10000 forms when it opens the program as you just downloaded them. That is probably going to take upwards of 30 minutes.

What I would recommend is going to your Preferences and setting up the update to only update specific forms and states, then using the Automatic update. It's an improvement they made this year which I wholeheartedly am in love with.

Let me know if you have any problems.

Danielle

Former ATX Rep

Thanks Danielle...I realized this after I started the update...but figured at this point I should just let it continue and go on to other tasks....fortunately this is not happening on my primary PC....On that one, I will heed your advice.

OK...So I know I am supposed to update daily if not multiple times each day....but I have been busy with non-tax related issues....so just now updating for first time in a week.....It has been "Updating Forms" for 45 minutes and is only at 49%...Is this normal?

Jeesh....My punishment for not updating daily, I suppose!

I used a Dell P1500 for a few years and it worked fine with ATX until it wore out, now I use a Lexmark E250dn laser printer...very good...very fast...also prints the "client Copy" watermark as it should...which was a problem with the Dell.

....Ma is excited cuz tonight is her bingo night....She put on a clean t-shirt and her best pair of stretchy pants....Heck...she even brushed her tooth!

FYI....I just sat on the scissors :o

I am very happy to see Willie from Tex Upport here on this forum....Tanks willie!

Just how big is your shoe? With the right size rubber band, you should be able to get it on over your shoe AND hold your sock up.

All of my rubber bands are sticky!!

And you can't use a rubber band why?

That would require shoe removal...A procedure that I am simply not prepared to undertake at this time....but thanks for the suggestion!

Most of you know that my wife of 16 years passed away last March (thanks for the many condolances). I just wanted to let all of you know that since then, many changes have occurred. I am dating an old girlfriend and we are moving into a new house (actually her childhood home) with my daughter, Smokey the spoiled cat, and Brody the ugly pug. This should prove to be a very interesting tax season and I look forward to corresponding and sharing thoughts and ideas. Happy Holidays to all!

OK...So the elastic in ONE of my socks no longer fuctions properly...but the elastic in the other sock is fine...now I have one cold shin and one comfortable shin

Hi JB. Glad you're back. I hope you are doing well and look forward to more of your posts.

taxbilly

Thanks....It is nice to stop in every once in a while...I have purposely taken several months off from doing personal income taxes (although still many business returns to work on at my full-time job)....just working on one last extenion-filed return for an elderly client. The regs are prety clear that it is deductible, but after many months of not thinking about personal taxes...It is nice to bounce things off of some fellow preparers. I hope things are nice down there in Florida...it has been dry, but now very pleasant here in Ohio. After this return you guys may not see me for a few more months....but then I'll be back as a regular on the board!

My client is an elderly lady who required in-home skilled nursing vists throughout the year fo which she paid over $21,000.00 not reimbursed by any medical insurance. Is this deductible like any other allowable medical expense?

Doing really good here....I miss my wife...but doing good

I am much like a cheap switch....Easy to turn on and just as easy to turn off.....Being cheap though...If I am turned on then off, I might break and not be able to be turned on again.

This is what has happened....ATX turned me on...Then harshly and violently turned me off....I am broke and ATX will never turn me on again. For various reasons that I will not get into here...I MAY use their software for another season.....but they will never....NEVER regain my trust and devotion...If they were to bring back the former community, I would not take part in it. I have found a new home.

ouch....drank that slushy too fast