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Everything posted by cbslee

  1. New York Releases Guidance on Economic Nexus Threshold and Requirements for Remote Sellers Effective Date: June 21, 2018, the date of the United States Supreme Court decision in Wayfair Threshold: $300,000 $500,0000 in sales of tangible personal property and more than 100 sales (On June 24, 2019, New York enacted legislation to raise the state’s economic nexus threshold to $500,000. The number of transactions threshold remains the same.) Measurement Date: Immediately preceding four sales tax quarters Includable Transactions: $300,000 gross tangible personal property sales When You Need to Register Once You Exceed the Threshold: Next transaction On January 15, 2019, the New York State Department of Taxation and Finance released a notice stating that businesses without physical presence in New York that exceed the state’s economic nexus threshold must collect and remit state and local sales taxes. New York did not pass specific legislation to enforce the remote seller collection responsibility. In the notice, the Department states that following the South Dakota v. Wayfair decision, “certain existing provisions in the New York State Tax Law that define a sales tax vendor immediately became effective.” Businesses that fall within the definition of sales tax vendor and make taxable sales into the state are required to collect and remit sales tax. Remote sellers without physical presence will be required to collect and remit sales tax, if in the immediately preceding four sales tax quarters the seller: Has made more than $300,000 $500,000 in sales of tangible personal property delivered in the state; and Conducted more than 100 sales of tangible personal property delivered in the state The sales tax quarters for New York are: March 1 through May 31, June 1 through August 31, September 1 through November 30, and December 1 through February 28/29. Sellers that meet this threshold and are not yet registered as a vendor with New York are expected to do so immediately. For more information, visit the Department’s webpage on the new requirement. (N-19-1 Notice Regarding Sales Tax Registration Requirement for Businesses with No Physical Presence in New York State, New York State Department of Taxation and Finance, January 15, 2019) UPDATE: On March 26, 2019, the New York Department of Taxation and Finance released a bulletin related to registration requirement for businesses with no physical presence in New York state. This bulletin states that New York’s economic nexus rules became effective on June 21, 2018, the date of the United States Supreme Court decision in Wayfair. Previous bulletins were not as explicit in naming June 21, 2018 as the effective date. UPDATE: On June 24, 2019, the New York Governor signed S.B. 6615, which raised the state’s economic nexus threshold to $500,000 from $300,000. The number of transactions threshold remains the same at 100 sales.
  2. 1. You have condensed the details to the point that it's unclear as to what the actual situation is ? 2. Who did the bank loan the money to ?
  3. Patrick, If you go the Drake Software main website, then click on "Service and Learning", then click on the last selection on the dropdown list, "Videos", you will find a lot of short videos that will give you a brief introduction to many different parts and aspects of the software.
  4. cbslee


    Actually my decision making process in a gray area like this is based on: 1. Discussing the issues/risks with my client. 2. Evaluating my client's level of risk taking or risk aversion. 3. Asking myself whether this is a "red flag" potential audit triggering issue. In 27 years, I have only undergone 3 audits, all over 20 years ago. One was for representation work on a return for a commission salesman prepared by H & R Block. One was limited scope, only involving whether my client had basis to deduct his large S Corp losses. The third was an audit of bank account deposits looking for unreported income. The auditor did find several deposits of totaling $ 3,000 or $4,000 from the sale of used equipment that my client didn't tell me about. To my surprise, the auditor closed the audit without assessing my client any additional tax ??? I will admit to being too lax in several areas. This year as I am easing into semi-retirement I have been tightening up on my client's compliance in those areas.
  5. cbslee


    Copied from Forbes: The Internal Revenue Service audited only 0.59% of individual income tax returns last year, the lowest audit rate since 2002, according to the IRS 2018 Data Book released today. A closer look shows that it’s the highest earners whose audit rate has dropped the most. For the highest income taxpayers—returns showing adjusted gross income of $10 million or more--the audit rate dropped from 14.52% in 2017 to just 6.66% in the latest report. For households with AGI between $5 million to $10 million, the audit rate dropped from 7.95% to 4.21%. For households with AGI between $1 million to $5 million, the audit rate dropped from 3.52% to 2.21%. For households with AGI between $500,000 to $1 million, the audit rate dropped from 1.56% to 1.1%. For households with AGI between $200,000 to $500,000, the audit rate dropped from 0.70% to 0.53%. Today In: Money By comparison, for households with AGI under $200,000, the audit rate dropped slightly, stayed the same, or climbed (from 0.48% to 0.54% for $50,000 to $75,000 AGI households). The report covers data from returns filed in calendar year 2017 and audits in fiscal year 2018. The nearly 1 million audits the IRS completed included more than 892,000 individual income tax return
  6. cbslee


    I had a client who flipped 5 houses during the 3 years ending 2017. I reported them on Schedule D and they went thru. I claim no special insight, however I do think that I pushed the envelope.
  7. Usually an S Corp would not be desirable in this situation, because down the road if any of the properties need to distributed back out to any of the partners, departing or otherwise the properties have to come out at FMV which could trigger unwanted taxable income. You don't mention, "What is the rationale for these partners to combine together ?" The combining of partners and LLCs into one umbrella organization seems to me to be overly complicated both for both accounting and tax purposes. Inevitably, with this many individuals involved, one or more partners will need to leave whether because of death, financial problems, disagreements etc.. Getting this many individuals headed in the same direction would be like herding cats or watching a train wreck !
  8. An honest objective response: This is my second tax season with Drake after 20 years with ATX. To be honest the input is more than a "little" different. Some of the worksheets are very busy with several links to subworksheets. Until you get used to it, sometimes trying to find the right worksheet is frustrating. If you are doing mostly straightforward 1040s, I don't think the transition would be too bad. I do mostly business entity returns and complex 1040s so that transition was more difficult. Drake has Oregon business entity returns available several weeks earlier than ATX which was a big deal for me, plus Drake efiles all of the Oregon entity returns which ATX did not do at the time I left. Honestly it still takes me a bit longer to process returns on Drake than it used to on ATX. However that's more than offset by reduced stress and frustration ! I like Drake and I don't regret changing.
  9. Copied from IRS eNews: The IRS will present a webinar, Tax Withholding Estimator , at 2 p.m. ET on Sept. 19. This 120-minute webinar will illustrate the improved features and design of the new IRS Withholding Estimator and teach tax professionals how to use it. Tax pros can earn two continuing education credits by participating. Go to irs.gov to Webinars for Tax Practitioners in order sign up.
  10. cbslee

    QBI from Sch E

    The problem is that the definition of a trade or business is not based on rules & regulations but on an aggregation of administration guidance and a number of court cases, some of which happened decades ago. The peace of mind that you are looking is not currently available ! Perhaps clarity on this issue will evolve over the next ten years.
  11. Edsel, You have a tendency to ask incomplete questions and then dribble out additional tidbits of important details over your next 2 or 3 posts, so that when someone answers your first post, our posts are usually wrong or not useful. My personal choice is that I will not reply to any more of your posts.
  12. cbslee

    MeF Shutdown

    Copied from IRS E-News: The Modernized e-File (MeF) Systems, both Production and ATS, will be unavailable from 8 a.m. ET on Saturday, Aug. 31, to 6 a.m. ET on Tuesday, Sept.
  13. We are gaining a lot of circular momentum here, approaching Warp 1.
  14. I stand corrected with egg on my face. This situation is a perfect example of how difficult it is to prepare returns correctly and why so often we see mistakes on returns prepared by other preparers.
  15. I would enter original cost plus improvements for the depreciable basis and carryover the accumulated depreciation. I believe changing the basis or the accumulated depreciation would be incorrect. You have a change of method on an existing asset not a new asset.
  16. First, this is not my area of expertise, bur I do read a lot and it seems to me that this could be a fairly complex question. Find some detailed resources, which are available online, so you can pin down the key issues, then examine the facts & circumstances. Note: Selling your home, then buying a boat registered in a different state by itself does not change your principal residence.
  17. I started making QCD's last year although not in excess of my RMD. My understanding is that you can make a QCD(s) in excess of your RMD, however the excess amount will not reduce your taxable income, it will only reduce the account balance against which next year's RMD will be calculated. Note: The total of your QCD(s) are limited to $ 100,000 each year.
  18. Quite true, the reps I dealt with were very friendly. The results, not so good!
  19. Copied from IRS E-News: 1. New IRS Impersonation Email Scam The IRS and its Security Summit partners warned tax professionals this week about a new IRS impersonation scam campaign spreading nationally on email. The new email scam uses dozens of compromised websites and web addresses that pose as IRS.gov, making it a challenge to shut down. By infecting computers with malware, these imposters may gain control of an individual’s computer or secretly download software that tracks every keystroke, eventually giving them passwords to sensitive accounts, such as financial accounts. “The IRS does not send emails about your tax refund or sensitive financial information,” said IRS Commissioner Chuck Rettig. “This latest scheme is yet another reminder that tax scams are a year-round business for thieves. We urge you to be on-guard at all times.” The IRS does not initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. This includes requests for PIN numbers, passwords or similar access information for credit cards, banks or other financial account.
  20. I won't go into the details, but I had similar experience recently with a B of A credit card in regards to setting up automatic payments. On the face of it their credit card website looks very professional etc, but when you go down to the next level I was going around in circles. Tried to get help from a real person on the phone, they emailed instructions telling me to do the same thing which had already not worked. I am in the process of closing this credit card and will never do business with B of A again. It's a tossup as who is the worst B of A or Wells Fargo !
  21. Actually, Microsoft is making a number of changes to become more compatible with Chrome, Android and Linux in order to compete with Google.
  22. I used Firefox for years. My SaaS Payroll and Accounting software from Accountants World no longer supports Firefox, so I have had to switch to Chrome.
  23. I totally agree. I would never use McAfee or Norton !
  24. In my state of Oregon only CPAs can issue compilations. That position is strongly defended by the Oregon State Board of Accountancy.
  25. I don't know about your state, but in my state of Oregon only a Practicing CPA would be able to prepare those statements. As a practical matter, that's why I have never had questions about my "internal use" financial statements, because compiled, reviewed or audited financial statements are so expensive! For about five years I did have a client who was a subsidiary of a Swedish Corporation who did have audited financial statements. I had to arrange for a CPA with a nearby office to issue reviewed statements to keep the parent company's auditor happy.
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