Terry D EA

Agreed!!!

I downloaded it but have not received the disc yet. Dan was very helpful with the download and rolled over all of my clients from last year. So, I am looking forward to another peace of mind tax year. I haven't done a test return yet but will very soon. Concentrating on client letters and crap about the aca.

Working on the totally paperless thing. I just want to know if scanning a 8879 or 8867 is considered an originally signed form. If you archive them after 3 years by scanning and storing digitally now that would seem to be okay.

In my opinion. this is where the engagement letter is a must. I never, and I suppose this is the norm for all of us, do an independent verification of the client's books and records or receipts prior to preparing the tax return. A client can take a Lowe's Home Improvement receipt for repairs to their home and call it a business related repair and we will never know the difference. Even if the client is using QB which many are, each transaction is not verified. Now, keep in mind that I will send the guy packing who brings me hand written expenses on a sheet of notebook paper. That is where the due diligence comes in. Time to ask more questions. I think the main thing to keep in mind is the definition of carelessly and recklessly in circular 230 and if you are doing everything that is required to CYA, then there shouldn't be any concerns.

A potential client has inquired of my services to prepare their annual 1120S Federal & State returns along with each shareholders individual returns. During our interview several statements were made about the previous CPA who in the client's opinion offered incorrect information and was deemed incompetent. However, the statements made by the CPA were spot on and not understanding the difference between cash and annual tax payers and why losses cannot be deducted I determined were clearly on the shareholders part. Also, during the interview I was informed they would not longer be paying payroll taxes and each "employee" would be given a 1099 which I was asked to prepare in the future. These folks are definitely "employees" and I cautioned them about miss-classifying employees and the consequences and the statement of they didn't care was clearly made. I have not provided them with an engagement letter or contract yet because the statements made and potential fraudulent activity concerns me. First gut instinct is to refuse the engagement. But if I am only engaged to prepare the year end financial statements to prepare the returns and do not identify any other services or fees for any other services am I in the clear here? Under circular 230, and because I have knowledge of potential fraud with miss-classifying the employees, I really think I should run. Opinions please.

I have used nothing but laser printers as well. I have a two drawer HP2015 that puts out 30PPM and toner from rapid refill costs approximately 118.00 per year. As others have stated, the IRS required everything printed on laser. Probably doesn't need to be said here but inkjet will bleed off the page if it gets wet for any reason. Inkjet is also easier to wash. I learned about check washing when I worked in one of my business client's office when some of their employee payroll checks had been stolen or given to someone who had the capability to do so, and the amounts paid were changed. Yep, never thought this could happen either but it did. So, for me it is all laser. Just my 2 cents worth.

I know I am chiming in here a little late but the expenses to prepare the property for rent are capitalized and the depreciation begins once the property becomes available for rent and not when it is occupied.

Can't answer that one. Client of mine who asked the questions regarding the tax consequences of this sale is not the executor. I asked enough detail to determine the tax consequences. As to the final bottom line, that is yet to be determined. I have not been officialy retained to file this return. If and when I am retrained, then I'll get all of the details surrounding the sale and what has taken place since the time of death. However, thanks for the advice.

Thanks Lion and you did confirm my original thoughts. Just to be sure I am on the right track, the estate's basis is FMV at time of death for determining gain or loss correct?

Decedent died two years ago with the only remaining asset being his primary residence. The family has recently sold the residence. There is an estate that is currently open. The residence has not been used for any rental activities nor have any of the beneficiaries been living in or using the residence. I am of the opinion that form 1041 with Sch D is required to be filed due to the income exceeding the 600.00 threshold. In this scenario, the estate has held the property for the last two years and assumes FMV at date of death to determine the taxable gain/loss at the time of the sale. There are three beneficiaries and the will states the proceeds are to be divided equally. Now regarding the beneficiaries, Sch K is used to distribute the net income. Because none of the beneficiaries "inherited" the property, is this a taxable event for the beneies?

I worked for HRB in my area back in 1997. We were told that due diligence with EIC wasn't necessary and to do what the client said and don't ask questions. This is why I only lasted a week and a half with them. I agree with KC with franchise thing and if the local owner could be dishonest and a crook.

At one time I too was stuck in the forms driven or based entry and couldn't see any other way to work. Now, and after several years of inputting information on worksheets, I agree with John H. it is much faster and actually easier to navigate your way around.

I don't know about going back to ATX. I read an awful amount of problems this year again. Appeared to be off to a rocky start and smoothed somehwat at the end. I used OneDesk and had virtually a trouble free season. Little learning curve, good price and stability. Just my 2 cents worth

I read that somewhere as well. I think here in NC we are allowed 1%. Here is something else I think some of our low end clients know. Say a client owes you 120.00 for their return. You add the appropriate interest for three months and still no payment. Finally, you decide a small claims action may do the trick. All of the trouble, filing fees, missed time from work, makes it not worth it to go after them. Then when the court rules in your favor all you have is a judgment and still no money and additional heartache trying to use the court system to collect. Been down this road a couple of times and just cut my losses and moved on. Just like retail covering losses from theft, increase fees to make up for those few who don't pay. Hate to do that to good clients but as has been stated, good clients usually don't complain about an increase. I have even had quite a few of mine think my fees are too low and insist on giving additional money.

Thanks Joan. I guess the posts were referring to two different clients. The one that claims he took the deductions and never contributed the funds is the one that I was referring to. John hit it again with being thrown under the bus.

While I agree it does seem unusal but the trust instrument is real clear with the exact wording. You are correct, this board is the bomb and I don't know how I could survive a tax season without it. >>>>Are you instead just leaving in 58a and b but considering those amounts as corpus<<<< Yes. According to the trust document the unitrust amount is calculated from the year ending corpus. This also confused me regarding the ordering rules for the unitrust distribution. But... I can see that it works and the rules are followed in the following years. These things can make one crazy.

Thanks John for your added comment on "it won't work legally". Claiming kids and taking deductions for them for five years may have worked but it isn't legal either. Some people. Geez!

Well, jshtax, if that's the case then your client is guilty of tax fraud plain and simple. I agree with the others it simply won't work. I would indeed fire this guy before it comes back and bites you. I know you trusted this guy that he was doing what he said he was and it would be hard to do any due diligence here. But.... when I realize that he is guilty of tax fraud then it is time for him to go. A mistake is a mistake and should be rectified and is acceptable as I agree with Jack we are prone to errors because we are human. But purposfully committing fraud is inexcusable.

I like the CD option but I do like the professional look of the folder. I use the folders from Tennez with the business card slits in them. I have used CD's when the returns are huge and I know the client will eventually need some portion reprinted and I can direct them to the return. Example: One of mine this year was in excess of a hundred pages consisting of numerous Sch E and C's. Client called the other day and wanted expenses from a particular property. Directed him to the CD and appropriate schedule. Naturally, this return would not fit in the folder or any other folder that I would use. Hole punch the top with a binder type fastener and an envelope. All is well.

I figured out my problem. Line 50 (Total Assets) must match Line 60 (Net Assets Plus Total Liabilities). The amount of undistributed capital gains is what was throwing me off. The trust instrument does state that undistributed income, capital gains, dividends; etc are allocated to corpus. Once I included that amount on line 58b and realized that I had transposed the ending book value (Col and FMV (Col C) all is well. So, it was not the program after all. When I took time to actually read the error and analyze it I got it. Simple enough so maybe a good excuse is I have been staring at it too long and created a mind block so I couldn't see it. I don't know why I do it but sometimes when I question myself my mind gets boggled up. From my original post, I was looking at it as though it was a financial balance sheet where the accounting equation applies. Duh! Thanks for your help as you did help me unravel my confusion and accpet my apologies if I confused you.

>>>>The initial contribution should have been either cash or securities or other assets matched exactly with trust principal or corpus<<<< These items do match. The software that I am using throws a flag abouth the "liabilities" not matching as if it were a normal operating balance sheet. I agree that corpus should never change and in this situation it has changed due to the lack of sufficient income to meet the Unitrust distribution in some previous years. Also, the terms of this CRUT does include capital gains and following the ordering rules there is an undistributed amount this year that I think goes to corpus. This I am not sure of at this moment, and I will check the trust document, I am also aware that undistributed capital gains can go to the succeeding years as part of the Unitrust distribution and corpus doesn't get distributed until all is used up or income isn't sufficient. Again, following the ordering rules. I have all returns since inception simply becasue I had to amend all of them some time ago. During that time, I had to create all of the trust accounting from inception as well. We have real good accurate records and as I said above I have been thrown by that warning so maybe I over thought it.

I agree totally. I personally want to see the detail. This is extremely important when the need arises to review a return you completed a couple of years earlier or for doing comparisons.

Just moving this back to the top of the list hoping for a response.

I really think they are listening and do have a good product. it appears they are open to all of our suggestions and will work to meet our needs. One major issue that I found was the lack of an asset manager in the business module. I am looking forward to this next year. Personally I like a bit more detail in the statements but I don't know if anyone at the IRS really reads those and maybe my need for detail is for folks outside the IRS. I did ask about beta testing but I don' think that OneDesk has that capability yet.

If this is a client that you have not prepared the original return for, then you would have to input the original return and amend from there. I am always very adamant about letting the client know that I have to duplicate the return thus substantiating the fee.