Lee B

I have only prepared a few returns so far, (Win 7 Pro 64 bit standalone) but I have noticed the following: 1. I turn my computer off at the end of the day and reboot every morning. 2. ATX 2014 will not open ( can't find server) 3. Prior in installing ATX 2014, I had to go to the Admin Console to get the servers started before ATX . 2013 would open 4. Now ATX 2013 opens without any problem (Although there is a new window that tells you the servers are starting up) 5. After opening ATX 2013, ATX 2014 will open without any delay. I get the impression that ATX has modified the server start up process which has also improved the opening of ATX 2013. But it is kind of annoying to have to open 2013 every day so that I can open 2014.

Rich, I totally agree with you. The evolution of these Regs have been ongoing since 2006, and proposed Regs were issued well in advance. The Regs that were issued last month were attempts to fine tune the Regs that have been out there for over a year. What the IRS didn't do was get out in front and make clear their expectations. At the class that I attended several weeks ago the presenter/coauthor, who is a National Tax Partner for CliftonLarsonAllen, the 10th largesr CPA Firm in the country, said that a upper level IRS employee, who was involved in the area told him that the IRS expected very few 3115 s to be filed for small businesses.

Very interesting, since Turbo Tax had a similar problem with Minnesota back in 2013 I think.

In the class that I went several weeks ago, the presenter/coauthor said that in a situation like this no 3115 is required or needed. Just elect the safe harbors which apply to your taxpayer's situation.

Very interesting, because some people who file for bankruptcy don't end up jumping thru all the hoops and their bankruptcy never ends up finalized.

Goes back to last year, ATX says state rules prevent them from allowing state forms to be duplexed.

Yes, I have been scratching my head about that. If a taxpayer's MAGI is low enough that they qualify for Medicaid and don't qualify for an ACA plan, but don't sign up for Medicaid, how do you handle that ?

This family should be exempt for affordability. Actually this family probably qualifies for medicaid, unless they live in a state that refused the expanded medicaid provision, which may be an exemption in it's own right.

I stand corrected: According to page 3-18 of The Tax Book: Repayments over $ 3,000: 1. Claim as a miscellaneous itemized deduction subject to 2 % ( not a good result ) 2. Claim a credit for the the repaid amount on line 73 Form 1040, calculated as follows: Refigure tax from the earlier year without the income that was later repaid. Subtract the refigured tax from the tax shown on the original return. Enter the result on line 73 Form 1040 Enter "IRC 1341 next to line 73. I had no idea this procedure existed until I looked this up !

Seems to me it should be a write in adjustment on line 36 as repayment of previously taxed income.

Interesting post from ATX: Jane P, The payer information is not transferred using the Import/Export method. However that is the recommended way to move your return data to a new machine as the backup/restore feature for 2013 works best on a local machine, but is not the most efficient when moving to a new machine, which has been enhanced for the 2014 software. If you have access to the original machine that the data was stored on, a flash drive, and both machines are connected to the internet I would suggest a call to Support and we can make sure we move the necessary data over to the new machine for 2013, which will include your companies, payers, and preparers. Beau Product Support Representative CCH Small Firm Service

There have been 5 or 6 posts. 1. Several where everything was fine preupdate, now the program won't even open. 2. 3 or 4 where the users keep trying to run 2013 & 2014 simultaneously and 2014 keeps crashing.

Last year ATX supported duplex printing for federal forms and schedules but not for state forms and schedule. There was a lot discussion on the ATX Board about this last year.

Copied from the website of Nichols Patrick CPE : A Very Good Overview of Repair Regs The latest round of revisions to the repair and capitalizations have made their was our of the IRS , but this time the majority of the regulations issued as final regulations (TD 9636, https://s3.amazonaws.com/public-inspection.federalregister.gov/2013-21756.pdf) with the regulations under IRS §168(i) reissued as proposed regulations with further revisions (REG 110732-13,https://s3.amazonaws.com/public-inspection.federalregister.gov/2013-21753.pdf). Late in 2012 the IRS had issued Notice 2012-73 which delayed the effective date of then temporary regulations. The notice also indicated specifically that the IRS expected to make changes to simplify compliance and the notice provides that such changes are to be expected in the following provisions: – De Minimis Rule:§ 1.263(a)-2T(g); – Dispositions:§§ 1.168(i)-1T and 1.168(i)-8T; and – Safe Harbor for Routing Maintenance:§ 1.263(a)-3T(g) The final regulations apply to tax years beginning or after January 1, 2014, though taxpayers may elect to apply the provisions to years beginning on or after January 1, 2014. As well, taxpayers may elect to apply the provisions of the 2011 temporary regulations to tax years beginning on or after January 1, 2012 and before January 1, 2014. Significant changes in the final regulations as compared to the 2011 temporary regulations are discussed below: Materials & Supplies The temporary regulations provided as one of the defined types of “materials and supplies” under Reg.§1.162-3 any unit of property that had a cost of $100 or less. The final regulations raise that amount to $200 – still relatively low, but at least a more workable number than the $100 limit. In the temporary regulations this number had a special significance for most taxpayers due to limitation on a second optional test that could be used to classify an item as “materials and supplies” and thus not subject to the general capitalization rules of IRC §263(a) The de minimis method allowed a limited recognition of an organization’s capitalizations policy used for accounting and financial reporting purposes. The rule was far from perfect, being subject to an overall aggregate limit that effectively required tracking any item expensed due solely to the capitalization policy, meaning that an entity had to account for these items, although the purpose of the accounting policy on capitalization generally was to reduce the administrative burden of tracking such items. But even more significant was a second problem – the de minimis election was only available to a taxpayer with an “applicable financial statement” as defined by the temporary regulations. De Minimis Rule Changes The IRS noted the criticism they received over the de minimis election and did make certain changes. What the IRS did was create two elective rules. The election that applies to a taxpayer depends upon whether the taxpayer has an applicable financial statement. The IRS also moved the rule form Temporary Reg. §1.263(a)-3T to Reg. §1.263(a)-1, admitting that the rule applies not only to improvements ( as opposed to repairs), but also to acquisition, due to its inclusion in the materials and supplies regulations. The definition of an applicable financial statement remained unchanged in the final regulations. A taxpayer’s applicable financial is the first financial statement, listed below, which the taxpayer has for the year in question. If the taxpayer does not have any of these statements, the taxpayer does not have an applicable financial statement and will face a modified limitation. Applicable financial statements are: – A statement filed with the Securities and Exchange Commission; – A statement audited by an independent CPA that is used for credit purposes, reporting to equity holder or for any substantial non-tax purpose or – A statement other than a tax return required to be provided to an agency of the federal or state government ( other than the IRS or SEC) The IRS considered, but rejected, adding financial statements for which a SSARS review report has been issued by a CPA. The IRS argued that since a review does not require that there be analysis and testing of an entity’s internal control, it did not serve to address the potential problem the IRS saw with entities failing to consistently follow the policy or insure the policy did not distort financial reporting. Both entities with and without an applicable financial statement must still have in place as of the first day of the tax year ( thus for a calendar year taxpayer, as of January 1, 2014) a written accounting procedure in place treating all purchases of assets below a certain level as an expanse for nontax purposes. The entity must also follow that policy. For an entity with an applicable financial statement, the expense treatment must be reflected in the applicable financial statement. For entities without such statement, the amount must be treated as an expense on the accounting books and records of the entity. A complaint about the 2011 temporary regulation’s de minimis rule for those organizations that could use it was that require detailed tracking of the assets in question. That was because the entity has to test the items that were not capitalized due to the accounting policy to insure, in total, the amounts did not exceed the greater of .01% of gross receipts reported on the tax return or 2% of depreciation and amortization expense reported on the applicable financial statement. Commentators complained that this testing requirement defeated the entire non-tax purpose behind these accounting procedures – that is, not to have to waste time tracking and accounting for numerous low value assets. To comply with the 2011 temporary regulations a significant amount of accounting personnel time would be spent analyzing and tracking these “below the capitalization level” purchases. In response to that complaint, and to come up with a method to b used by taxpayers without an applicable financial statement, the IRS dropped the aggregate tests and instead went to a per asset “invoice cost” test. Assets that are expensed per the capitalization policy in place at the beginning of the year, which are reflected as an expense on the applicable financial statement or in books and records ( as applicable to the taxpayer) will not be tested against the capitalization regulations if the invoice price of each individual asset is less that: – $5000 for an organization with an applicable financial statement – $500 for an organization with out an applicable financial statement The overall result if these changes is that organizations with written and consistently applied capitalization policies will be able to treat items costing less than $500 )(or $5000 if they have an applicable financial statement) as materials and supplies or repairs if the organization makes the de minimis election. If the organization does not have such a statement of fails to make the election (which must be made on the taxpayer’s return via a statement attached), the “protected” expenditure amount drops to $200. While the regulations themselves do not mention it, the preamble to the final regulations reminds taxpayers and, rather explicitly, agents that amounts expended beyond this level do not automatically need to be capitalized- or even that a higher capitalization policy cannot be justified, Rather, such policies must be tested to see if they materially misstate income. De Minimis Small Taxpayer Real Estate Safe Harbor Another criticism of the de minimis rule in the 2011 temporary regulations was that it did not apply to real property. The IRS responded to this criticism in a limited fashion, creating a small taxpayer real estate de minimis safe harbor expenditure limitation which the taxpayer may elect apply. First, the rule only applies to taxpayers with average gross receipts of less than $10 million in the prior three years (thus the “small taxpayer” part of the rule). Second, the rule only applies to a building whose unadjusted basis is $1,000,ooo or less. If the taxpayer is leasing the building, then the total of all lease payments ( including a reasonable period of renewal based on the terms of the contract) is used for the $1,000,000 test. If the taxpayer qualifies, then we end up with the same sort of aggregate amount test that the IRS backed away form with regard to the general de minimis test. IN this case the taxpayer must look at the total of all expenditures that relate to maintenance , improvements and similar expenditures. Taxpayer may not use any other rule(such as the $200 materials and supply limit or routine safe harbor) to exclude items from this total. All such expenditures will be treated as not subject to capitalization rule if they total less than the lesser or 2% of the unadjusted basis of the property or $10,000. Routine Maintenance Safe Harbor The IRS also addressed criticism that the routine maintenance safe harbor excluded real property. Under the routine maintenance safe harbor, expenditures would not be considered an improvement to property (and thus subject to capitalization under Reg. §1.263(a)-3) if the expenditures are reasonably expected to be incurred by the taxpayer more than once during the class life of the property. The IRS explains in the preamble that due to the long class lives for real property, the agency did not believe the “two times in the class life” test was appropriate for real estate. However, the final regulations introduce a special rule for routine maintenance in real estate, applying the standard rule except substituting 10 years for the class life. Thus, if maintenance is expected to be performed at least twice during 10 years by the taxpayer, the maintenance can be covered by the routine maintenance safe harbor. The IRS also clarified that merely because the taxpayer ends up not actually performing the maintenance twice during the class life for a particular asset, that does not mean the treatment was in error. But the IRS does caution that the taxpayer’s experience must be considered for future treatments. Effectively, there is no right to “Monday morning quarterbacking” by an IRS examining agent based solely on events that occur after the asset is placed in service, but information available to the taxpayer when the asset is placed in service (including the taxpayer’s prior experience with such assets) is fair game. Financial Statement Conformity Although retaining the de minimis election conformity requirement, the IRS removed a number of other references to financial statement treatment in the regulations, agreeing that a taxpayer might have different motivations for accounting reporting, and those motivations should not result in different treatments for taxpayers otherwise in the same situation. Remaining Temporary and Proposed Regulations The IRS did not finalize the regulations for general asset accounts and partial asset dispositions covered by regulations under IRC §168(i). Rather, the IRS issued new proposed regulations but, for now, kept in place the temporary regulations. The IRS apparently prefers to get one more round of comments regarding their proposed changes to these regulations before making them final, though the agency indicated they expect to issue final regulations by the end of the this year. Primarily the IRS has attempted to remove certain mandatory treatments regarding partial dispositions under the 2011 temporary regulations, moving back to the older rules. As well, the IRS no longer proposes to automatically treat each significant structural component of a building as a separate asset, rather defaulting to treating the building as a single asset. The IRS also provided an “audit correction” option. Should the IRS later treat an expenditure as one that must be capitalized for replacing a significant component of the building, the taxpayer may seek permission for an accounting method change to write off the old asset rather than now being required to depreciate both the improvement and the portion of the building asset that represents the original component. Time to Start Advising Clients Now that the rules are basically in place (aside from those for dispositions mentioned above), clients need to work on getting ready for these regulations. At a minimum, consideration should be given to documenting capitalization policies and insuring that they are consistently followed by the clients.

I have had to wrestle with line 21 3 or 4 times in the last two years and I don't remember a way to do that.

The only qualifier that I remember is that the educational institution must on the list of eligible institutions that enrolled students can borrow funds from the Federal Student Loan Program. This list includes lots of private vocational schools and even some colleges outside the US. My youngest daughter graduated from Simon Frasier in Vancouver BC which she partially paid for with Federal Student Loans.

First we need to know whether the Starbucks program qualifies as a tax free Educational Assistance under IRC 127 currently limited to $ 5,250 per year. If it does, to extent that we receive a tax benefit in one year, the future year reimbursement becomes taxable income.

Copied from the website of the Maryland Society of CPA s: Posted By: Bill Sheridan on January 22, 2015 in Taxation That didn’t take long. Tax season has only just begun, and the MACPA’s federal tax listserv is already lighting up with questions from tax pros. The issue at hand involves the IRS’s tangible property regulations. The final disposition rules for tangible property were issued in August and largely adopted the proposed regulations that were issued in 2013. The IRS also recently issued procedural guidance, but if the listserv is any indication, a ton of questions still remain. The MACPA is working on digging up some answers, possibly in the form of CPE programs and other guidance to address the issue. Stay tuned. In the mean time, here are a few resources that might provide some answers. AICPA resources: Tax treatment of expenditures related to tangible property resources FAQ: Forms 3115 and the new tangible property regulations IRS updates accounting method change procedures IRS Rev. Proc. 2015-13 IRS Rev. Proc. 2015-14 AICPA: Repair regulations’ de minimis safe harbor is set too low Regulations govern dispositions of depreciable property The five actions for IRS tangible property ‘repair’ regulations It’s not too late to save tax via IRS tangible property regs Post By:

You have two choices: 1. Use the import/export function to move the client files from the old computer to the new computer. This is what I have always used and it works pretty smoothly, never had any issues, but it does not transfer each clients efile info. 2. Use the backup/restore function to move the client files from the old computer to the new computer. Have never done it this way other users say it works fine and it brings over more client info. Either way, it doesn't bring over everything ie payer files, several days ago, ATX helped a user bring over all of the other misc files per a post on the ATX Board

Excerpted from a long post on the ATX Board: "Upgraded Server cannot run ATX 2013" . . . . . ...................................................... " The final explanation given by tech support is that the 2013 program was not really developed for a network and just will not run properly on Windows Server 2012r2" I really feel for this longtime user of ATX because he did everything right.

Remember the receivables have been distributed to the former members, the bank account would not remain open. Each member would collect his own receivables.

I believe that a new EIN is needed. The LLC is terminated and the assets and liabilities would be distributed to the members including the receivables according to their membership interest percentages. Depending how the LLC was started and what the members contributed to the LLC the termination could be fairly straightforward or somewhat convoluted.

Once upon a time, employees of the government were very very busy promulgating endless rules and regulations to instruct the citizens how to follow that wondrous creation known as The ACA. One day after the moon and the sun had circled the planet many many times,spokespersons came forth and said, "Lo and behold citizens, if you have been a member of an HRA, the rules are all different and to show that we are most thoughtful the rules go back to the beginning of this year. The citizens and their advisors were most confused crying, "This makes no sense, what will we do?" The advisors went to the country's revenue agency, "This makes no sense, what will we do?" The employees at the revenue agency said, "We don't know, the left hand knows not what the right hand is doing." The employees at the agency promulgating the new rules and regulations said, "We don't know, the left hand knows not what the right hand is doing." Moral of the story: If the left hand doesn't know what the right hand is doing you may be in big trouble. Footnote: It is said that this is what actually happened. The employees of the DOL and HHS did not know that rules and regulations they were writing would be in conflict with the rules already in place at the IRS. The employees at the IRS had no idea that the employees at the DOL and HHS were going to publish these rules when they did and were extremely surprised. After all no proposed rules or regs were ever published nor were any hearing ever held.

I am going to deduct the greater than 2 % shareholder's premiums as Self Employed Health Insurance on page 1 Form 1040. After all that is what the current unchanged IRS guidance says you can do. The strategy that I relayed in my previous post is an end run around the ACA Market Reforms. Is the strategy totally risk free, No it isn't. CliftonLarsonAllen believes that the penalty although it would be unlikely, would be limited to 10 % of the Health Insurance Premiums reported in Box 1, 3 , 5. The value of a $15,000 Health Insurance Deduction on page 1 of Form 1040 is definitely greater than a 10 % penalty as long as the taxpayer is in the 25 % bracket or higher.

After attending a class on Monday presented by the Oregon Society of CPA s, that covered this in depth, I have modified my position as follows: 1. The Regs issued November 6th change HRA s which affects the Self Employed Health Insurance Deduction for S Corp shareholders. 2. The ACA Marketplace Reform Regs are in direct conflict with IRS guidance for S Corp shareholders and partners ( See Pub 535, IRS Notice 2008-1, Rev Rule 91-26, and Ann 92-16 all of these remain unchanged.) 3. Until this conflict is resolved, we need substantial authority to rely on prior IRS guidance. 4. By subjecting the reimbursed premiums to Social Security and Medicare and including the reimbursed premiums in Box 3 and Box 5 wages, the assertion that there is a Group Plan which is subject to ACA Market Reform Penalties is significantly reduced. 5. The argument in favor of this position is the reasonable cause exception under Sec 4980D©(1) based on our reliance on Pub 535, IRS Notice 20089-1, Rev Rule 91-26 and Ann 92-16 all of which still exist unchanged. I take no credit for this strategy. The strategy originated with the National Tax Partners of CliftonLarsonAllen, the 10th largest CPA Firm in country with more than 1,000 CPA s employed who prepared over 100,000 tax returns last year. This strategy is the official position of CliftonLarsonAllen according to the course presenter and coauthor Andrew R Biebl CPA, one of the National Tax Partners for the firm.