Terry D EA

Truck Driver client was over the road owner-operator. Client apparently didn't think it was necessary to make truck payments and the truck was repossessed. Business began last year as a sole-proprietor with beginning depreciation on the truck. How is this dispostion treated? I have not had to deal with a respossessed asset disposition before and any help is appreciated. Terry D.

JB Here is my opinion for what it is worth. 1. The trips to and from the poultry farm may very well be a commute and not deductible unless the commute would be recognized as from her home to her first job and from the poultry farm to home. Mileage in between would be deductible. 2. The donated van would become a part of her investment in the partnership and would increase her capital account in the partnership. The partnership now owns the van and can deduct the maintenance expenses related to it. she cannot deduct them on her personal return unless she paid for them and did not get reimbursed. If that is the case then form 2106 if she is an employee of the partnership. 3. If she is on the payroll for the partnership then the vehicle expenses (mileage), would be deducted on form 2106 and Sch A as an unreimbursed employee expense. Otherwise they may be deductible on the K-1. I hope this helps in some way. Terry D.

Why are you filing separate? Your client can file MFJ and show the spouse as deceased on the tax return. Unless there is a some situation that warrants the MFS status, MFJ is the way to proceed. Yes, the tax return can be e-filed. Terry D.

Hey JB, I think we all get this kind of stuff more often then we care to. I always tell my clients they have to assign the value to the items they donate. I explain the 500 limit and the need for the 8352 form (I think that is it), and then I direct them to my website to click on the link to the Salvation Army valutaion guide. If you would like, go to www.qptps.com and you can copy the link from there. I do apologize the website needs updating but I am the chief cook and bottle washer in my business and the luxury of time doesn't exist. Terry D.

No, I think you need to read the rules regarding dependency and the support test. Terry D.

KC, Do you know a way to run a report within the ATX program that would allow us to see the names of the returns we have created and transmitted within ATX. I have looked at most of the reports. The e-filing reports only appear to reflect the returns e-filed and I see we can create a report of client's from the return manager. I have been printing both reports any comparing them to make sure that I have not overlooked transmitting any returns. Is there an easier way? Thanks, Terry D.

KC, Yes, I did see that I posted that point backwards. There are some issues with the determination of the housing allowance in this church among some other issues involving the finances. I may be asked to help here and want to be sure of what I am getting into. Thanks for being helpful. Terry D.

Mike, Thank you for your response. Through some investigation, the pastor has been telling the treasurer at the end of each year what the amount of his housing allowance is, which by your statement, this is indeed retroactive and unacceptable. With that the current council has not voted or even viewed the pastor's pay package nor the youth pastor's package and I am of the understanding this has been the practice for a number of years. I will take the time to read Pub 517 and already have the MSSP. If you don't mind, I would like to speak with you privately about some of this. I have your e-mail as you have helped me in the past and I will begin the contact in that manner if you approve. Thanks, Terry D.

Jainen I will reply at the risk of offending you. I initially chose to not respond to you as I felt comments of such a nature do not deserve a response. But, I felt some type of defense was warranted. I do see and recognize both sides of the coin here and I do not have the attitude that you suggest. Matter of fact, your response to this post demonstrates that you appear to be very closed minded and it is purely a shame that you have reduced this to prejudice. Your accusation of prejudice is completly unfounded. You do not know me, nor have you ever met me, and for you to make such an accusation is more than offensive to me. You have been on this discussion board and the ATX old discussion board for some time and you have attacked me more than once with some kind of ill minded unecessary remark. I beg you to find one time or even one instance that I have taken the liberty to do the same to you. Most people on this board including myself, have a high level of respect for you and the knowledge you possess. Why don't you treat others the same? >>In my observation "the Hispanic community" is deeply religious with far more commitment to family values than the general population. It also embodies a strong work ethic, which is the principal reason for immigration in the first place. They don't risk freedom and money just to hide their marital status or claim someone else's kid. << I agree with your statement here completely. If you go back and read my original post, I never made any type of statement to anything you have said in this statement and I ask that you refrain from taking out of context the comments that I made. Terry D.

Thanks for the support taxcpa. I intended no offense in my statement. I didn't even make reference to my clients as business clients either. Many "Puerto Ricans, and folks from El Salvador want to be called 'Hispanic" and get extremely upset if they are called Mexicans. The fact remains, the practice I mentioned, is done in large proportions within the community I mentioned and needs to be stopped. I am originally from Ohio and moved to the South 12 years ago and still get called a yankee, matter of fact, a damned yankee. I guess I am mature enough to not really care at all and all I do is laugh at it. I am sorry if I offended anyone by my earlier post in this thread. That was not my intent. Terry D.

Had this same thing this year. However, I have come to realize that some of this is used as a scam to defraud the IRS and get a whole lot of money back. My scenario, the female client told me she got married and had a baby. I asked about her husband and she said he already had his taxes done some place else and filed as HOH. She knew enough about filing statuses but didn't realize that because she told me the changes, I couldn't file the return the way she wanted. She in turn wanted to file for HOH and asked me what would have happened if she would have never told me she got married. I explained that I would have prepared the return, the route the IRS would take and advised her to bring her husband, the return that was prepared and allow me to amend the return before she got in trouble. She agreed, but that was two weeks ago. Hmmm, I wonder where she is? I have seen this happening more and more within the hispanic community in our area. Once the IRS begins collections, they flee to Mexico. I have lost several hispanic clients because of this practice which is okay with me. The other thing that happens is if they stay here, and after the IRS sends the "We're coming to get your stuff in 10 days" letter, they usually come back begging for help. I've even seen it where I get them all straight, don't see them again for 3 years and then they come back with the same mess again. Go figure? Terry D. Terry D.

I have a minister who has opted out of SS. This particular minister tells the church what the amount of his housing allowance is. As I read some of the IRS regs on this, the governing body of the church sets the housing allowance amount. Is this correct when the minister has opted out of SS? How does the housing allowance work when the minister has opted out of SS. I understand the housing allowance is to reduce the SE tax and has no affect on taxable income. Can you point me to some additional reading material. Thank you in advance for your expertise and help with this. Terry D.

You do not qualify for the credit if all of the following apply: 1. You received an economic stimulus payment of $300 ($600 if married filing joint). 2. Your 2008 tax on Form 1040 line 46 is $300 or less ($600 if married filing joint) 3. Your 2008 filing status is the same as your 2007 filing status 4. You do not have any qualifying children. I have a young client who meets all of the above except her taxable income in 2008 is more than 300.00. The worksheet is giving her an additional $300.00. The worksheet is confusing and I have read and re-read the information on this credit until my eyes have gone crossed. Am I correct when I read that her stimulus payment was less than $600.00 and because her tax liabitlity for 2008 is greater than $300.00, she gets the additional $300.00 credit? Terry D.

Yep, you hit it right on the head. Good luck on finding the cost basis and date of purchase. Alot of brokers expect their clients to keep up wih that information. Terry D.

I TOTALLY agree with each one of you. I would love it if ATX could find a way that would allow us to print the return organized the way we want instead of a default method. Sometimes it takes longer to check and uncheck the boxes then it does to complete the return. Cathering, unfortunately, I don't see any way of doing this. I've used this program since 1998 and have always considered the printing feature to be less than friendly. Terry D.

Kc you are right and I have known the correct answer all along I was just hoping for a loop hole of some sort that I may not be aware of. I do like how you stated to divorce my sympathy from the client. I usually do that without a problem. This one kind of got to me so I went out on a limb. My final decision is exactly as you have said. I had some folks from my church here and they were whining about having to pay and insisted that I might have made a misktake. I cannot make a mistake that they earned 10K in interest that is taxable. Hard to swallow but lack of planning on their part doesn't consititute any sympathy on my part. One more thing, I would never under any circumstances change any figures on anyone's tax related documents to help reduce their tax liability. Terry D.

taxbilly you are correct. I have calculated the credit manually and it is pretty clear cut and dry. I will advise my client of the repayment requirement that will begin with her tax return in 2010. Thanks to all Terry D.

I just read a shorter version of "The American Recovery and Reinvestment Act of 2009 - February 12, 2009", and it does state that the non-repayment portion and the increase in the credit apply to homes purchased after Jan 1, 2009. So, are my calculations correct? My client doesn't care about repayment if my calculations are right. Everything I have looked at says yes but I want to be sure before I transmit this return. Terry D.

Apparently legal custody of this child has changed and you say there is documented evidence of such. If the child lived with the appointed legal guardian more than 6 months of the year, then the child would be the dependent of the guardian to take the exemption. This would fall under the same label as a foster child as the original posts states there are legal documents in place. The child made under 3500.00. The mother cannot claim the child as she relinquished her custody. Jmho Terry D.

Maybe MaMallody will chime in here as he is an expert with clergy taxes. I have done a few and find it a little strange that all of this guys income has gone toward his housing allowance. I guess it would be possible if he is a part time pastor, which by the income you show, I hope he has another job somewhere. Sorry I am not of more help. Terry D.

Since the stimulus package has just passed, I have a client who can claim the credit for the first time homebuyer. She meets all of the requirement regarding the home purchase. 10% of the home = 7200, income less than 35k, qualifies for the full credit of 7200 which after I complete form 5405, the full amount of the credit flows to page 2 of the 1040. This credit appears to be fully refundable. If anyone else has eny experience with this, please check my calculations as I find it a little odd the whole amount of 7200 is refundable which gives her a 9k refund. Here is the good question. Since the bill just passed and it now states that this is indeed a credit and doesn't have to be repaid, would you advise the client of such at this time? The IRS says more information is coming and I am just a little uncomfortable with this whole thing. Thanks, Terry D.

Is it me or are the ACKS coming considerably quicker this year? I transmitted a PITA client name reject for the third time at 5:00 PM today and just received an acceptance on at 8:50PM. Thought that was grest and then a client called and wanted to know why he hasn't received his refund yet and couldn't understand why it didn't come in ten days. First off- client needs to learn how to count, only been 8 days. Next question, client - It should be here Monday right? Me- Don't know the light in my crystal ball just burned out. Geez, what do they expect? Terry D.

When we had to mail in the signed 8453 forms, many times I received nasty grams threatening to kick me out of the e-file program because I (the stupid one) put more than one form in the envelope and the mail room crew apparently couldn't figure out what to do with the extra forms behind the first one. Now who was messing with who? I'd love to stick it to them but I'd like to watch while they got it as well. I like the glue in the bottom of the envelope thing. he he he! Great post Anarchrist. Terry D. :lol:

All of the replies have been interesting. However, I do agree the most with taxtro that it is a schedule C and I have to find the answers to the questions each of you has asked. I am not sure if she does this in her home or the folks she baby sits for. I do know for certian that she is not a household employee. The income was from 5 different people. The question will be what she provides for the children when she is watching them. Now, keep her in your prayers. When I spoke with her this evening, she was very upset because her son was being life flighted to Duke and we agreed to put this on the back burner for now. Owing money to the IRS isn't something she wants to hear right now. Thanks to all of you. Terry D.

Okay now I am confused a little more. If this is not a corp then how did goodwill ever come into the picture? Under your scenario, if goodwill was indeed sold on an installment sale and defaulted, I believe the defaulted amount would have to be recognized somewhere. Goodwill has no physical substance at all and is an intangible. I am under the understanding for Goodwill to be part of the sale of a company, it could only be taken when an entire company has been acquired by another company. Sounds to me like the simpliest way to handle this is if the disposition was recorded on the assets when they were sold and when your client re-claimed the assets from the repossession, he would report the FMV of the equipment minus the loss on the repo which would return either a loss or gain. His cost on the books is the FMV. I hope I am helping and not adding further confusion. Terry D.