Margaret CPA in OH

I agree with Elrod. I've had to do only a few but I generally reside in the 'better to have it and not need it than need it and not have it' side. Given recent discussions about making things as clear as possible for those IRS folks, I think they will discard if not needed but may appreciate the guidance.

Wow....

Catherine, I of course understood that as I am sure did Jack. We folks sort of overdocument with belt and suspenders to cover all sides of us! I'm still in the pause mode to see if anything shows up by week's end then will begin other actions. I really don't feel rushed, just confused!

Thanks again, all. It's good to know there is a variety of opinions and options to address this issue. I especially appreciate the slow down and relax choice! Then I will check e-services as I already have POA. What I will not do is is have a 98 1/2 year old client invest in a 3 year cd. The check is actually good for one year so it seems I do have some time to pursue avenues and recheck all my rechecks on checks, data entry, etc. Based on Catherine's experience, I'm betting that is the situation. If I remember to do so, when I get to the bottom of this mystery, I will share.

Love it!

To be honest, I did not check that because her AGI is $182,920. I don't think any of my clients have low enough income to qualify and I do run the diagnostics. But I confess - I didn't on this one. Still open for any possibilities, though. Thanks!

Okay, I have checked all of that, JohnH. There was actually a balance due for 2010. The checks were all written on a trust account which was reconciled monthly as to amounts. The estimated payments were $5500 in September and $5500 in December (extended return). Final tax liability was $4334 and I applied the $6666 overpayment to 2012. She receives only an annuity with no withholdings, divs and interest from revocable trust (no withholdings) and K-1 from CRUT (no withholdings) and Social Security (no withholding. She will be 99 in December and I don't want to have to deal with more than her estate, the CRUT and final return so would really like to get this $2500 issue resolved. I'm not an IRS agent, OldJack, but I do manage her finances. I simply cannot figure what this could be. I am not perfect but in about 15 years of doing some rather complex returns for her and her late husband, this anomaly is a first. I'll be on the phone unless something comes to me in my dreams. Thanks, meanwhile, for the suggestions!

Thanks for the replies. I checked the check register and copies of vouchers for estimated payments so don't think that's it. Call? What number - the 1040 line? You are correct, I may as well dedicate my second line for the day! That may be my only true option though. Sigh...

I manage affairs for a client who has received a totally unexpected refund check from IRS for 2011 for $2500. I have triple checked every single thing that I can find on this return and am absolutely baffled as to the source of this. Of course there was no explanation, just the check. First time for me - any suggestions? I don't plan on advising deposit any time soon.

Thanks, JohnH. On order now! As I ease into retirement, it's about time I got some organization in my life. Hmmm, might help delay retirement, now that I think of it.

The titling you suggest is exactly what I have been doing and it uses little space. However, I cannot always recall what was documented on which date so like the idea of keeping the whole exchange in one or maybe two. The ease of rereading a thread from one longer saved email appeals to me. At least it's worth a try for a couple of those clients that tend to drag out exchanges over several weeks or even months. Isn't it wonderful how we can keep learning neat things for organization and just business tips from each other, not just tax stuff? This is the greatest resource ever for me.

Thanks for this suggestion, JohnH. I use Eudora, an email client, to download all emails and do have a handful of specific client folders. For most, however, I print to pdf and save in the client folder in my master client file. The pdf doesn't take much space but it does get unwieldy with continuing threads. I will set up this Waiting For folder today. I like it!

Imagine a dope slap here, at least I think so. Thanks for that reminder and I will check on that. Makes sense.

Thanks, OldJack, I know all that you wrote. The problem, as I thought I stated, is that when I input this into the shareholder's personal return, Sch E page 2 has the legend "Recognized gain on shareholder loan repayment." I think there is additional data entry or some carryover that is missing. I just noticed a Basis Worksheet form so will work on reconciling the proper entries. I know what the outcome should be; it's just getting the right numbers in the right places as ATX continues to improve the flow of prior year data and reduces our manual entry. I may have missed entering something on last year's return. Will check.

I'm finishing an 1120S. Single sh loaned corp money to survive (cash flow issue for contractor) and repaid most of that loan over the course of the year. When I put in the amount repaid in ATX it flows through as a recognized ordinary gain (Line 16E on K-1). I am struggling to reconcile the repayment of this loan as a taxable gain to the sh. Surely something is wrong with the data entry, right? (Retirement really is looking good)

Fading away here...my biggest income clients are two elderly folks (one is 98) for whom I do major trust work. When they pass, my income will be about half the current amount. I stopped taking new business clients when my other CPA retired 2 years ago and, finally, I can pay 'retired' membership rates for Ohio Society and American Institute of CPA's due to decline in hours and having reached full retirement age. I really don't want to sell so will probably just have natural attrition. But I am now no longer concerned about losing ANY clients and am quite relieved about some who have left within the last couple of years.

Well, bless his honest heart! And it is reportable income although, because it is less than the $600 reporting threshold, he may not receive a Form 1099. If he is not in the business of writing copy, he could report it on Line 21 of Form 1040 as Other income but, because it is over $400, it is subject to Self Employment tax so he would also file Schedule SE. If he had any expenses related to this income, he may instead be better off with a Schedule C-EZ, not too complicated if the expenses are easy, and Schedule SE. If he is truly not in this business, he may just report it on Line 21 and pay only income tax, not self-employment. As always, it depends and you will likely receive other suggestions, too.

This must be about the funniest descriptions of women and men I have ever seen...so vivid, so true!

If he, as so many now in the military, has email access and can print, fax, scan or email back, you can send him a copy of the return including the 8879 so he can sign and return it himself. I have several out of state clients and one in Switzerland and it works for us. He should return the signed form also encrypted or fax to you, though. It may be that a parent already has POA for such things. As he was going to a combat zone, it might have been one of those covered items prior to deployment.

Yes, congratulations to all who have passed this test and the EA and CPA exams and to all who have managed to maintain some semblance of sanity in this wild and crazy profession. Indeed, we are all "special" because we keep at this and actually enjoy it, at least most of the time!

So you are filing the 2011 return? If everything was held jointly as you wrote, wouldn't it simply be reported on the 2011 joint return? Also, in my Handy Dandy QF, it mentions that interest earned IRD can be reported on Form 1041 or beneficiary's return.

Congratulations - celebrate this weekend!

Woo Hoo! Congratulations!

Update: my client described the transaction. And, the purchase of the single client: I used to work as managing editor at XYZ up until 2008. After I left, clients began to dwindle, which probably had something to do with the economic downturn. In the fall of last year, I heard from XYZ's owner, who said he was down to two clients, both accounts which I used to manage. He wanted to shut down the publishing side of the business and concentrate on the entrepreneurial training side and asked me if I wanted to purchase the clients. I said that I did. One of those two clients ended up falling through because he did not contact them to tell them what was going on. The other was ABC Insurance, which transitioned successfully at the beginning of this year. The names have been changed.... I believe Section 197. I don't believe the client filed Form 8594, I have recommended it be filed and I doubt the seller filed. I have booked it on the balance sheet and will amortize as it clearly was that portion of the business and all of it.

Thanks again, jainen, but I think I will need more than a magnifying glass to see the verbiage to which you refer. I'm looking on page 10-23, 4562 Depreciation Section 179, of the Premium Quickfinder Handbook for 2011 tax year, left column, center, titled Intangible Assets-Section 197. I honestly do not see a little bitty #1 or a footnote of any kind on the page. The paragraph reads: Fifteen-year amortization beginning with the month the asset is acquired applies to the following intangible assets that are purchased by a taxpayer (not self-created) in connection with acquiring assets that make up a trade or business or a substantial part of a trade or business: [iRC Sec 197(a)] Goodwill, going-concern value or workforce in place. Covenant not to compete. Copyright or patent. Franchise, trademark or trade name. Customer based intangible (for example, composition of market or market share). Supplier based intangible (for example, favorable contracts or shelf space at retail outlet). License, permit or other right granted by a government unit. Business books and records, operating systems or any other information base. Computer software acquired in connection with the purchase of a business and not available to the general public. The 15-year write-off period does not apply to movie or book rights that are not included in the purchase price of a business. Purchased mortgage servicing right can be amortized over nine years. [iRC Sec 167(f)(3)] So I don't see an itty bitty #1 or a footnote but thought that the 'substantial' referred to the asset purchased as being a substantial part of the seller's business, not the buyer's. Regarding disposition, how would my client know for sure that this purchased client was no longer an asset (and therefore a disposition identifiable for documentation) without some sort of termination letter? Just trying to do the right thing. Thanks again - I'll keep looking for it.