SunTaxMan

CORRECTION! "Physical Presence" or "Bona-Fide Resident" Does it matter which criteria is met for qualifying for FEIC? Why? I have a client who seems insistent on using "bona-fide resident." I am trying to figure out why.

I am puzzled at this thread. In the 1040 ATX, there is the K-1 input worksheet, which has "basis" and "basis summary" worksheets - both are tabs along the bottom of the page when the K-1 input sheet is open. What am I missing?

I just found the thread. My sympathy also. I have a sister in law who died recently after a very long battle with cancer and another sister in law with COPD, who continues to struggle. Fortunately both the sister in law who died and the sister in law who is still living are Christians - we know they will be in Heaven and we will see them again. Very comforting in the struggles of missing them in this world. We take comfort in knowing the "sweet sorrow" of losing a loved one, yet knowing they are in a much better Place! I hope your Aunt was a Christian and you can look forward to seeing her again in Heaven. In the meantime, I also will be praying for your comfort and consolation in the family loss and the "adjustments" so necessary at this time. "You will keep in perfect peace all who trust in you, whose thoughts are fixed on You!" Isaiah 26:3 (New Living Translation)

Resident of "independent living" facility, lives in a single family house on the property. Initial payment made at entrance to the facility. Monthly continuing payment includes meals, housing, facilities maintenance, grounds maintenance, medical, etc. - the "normal" services offerred. Medical portion of facility's expenses are used as allocation of resident's monthly payment to be "medical expense" on Schedule A. New wrinkle. Financial statement of facility includes, among other expenses, real estate taxes paid. Can I use a portion of resident's monthly payment as "RE Tax" on his Schedule A? (Deduction would be the same ratio of facility's RE Tax portion of total expenses.) The "perspective" that give me thought about this is situation of mobil home resident who owns mobil home, but pays "lot rent" on the ground on which the mobil home sits. I remember that if the landlord of the park identities a RE Tax component of the monthly rent, that RE Tax component would qualify as RE Tax on Schedule A - even though the real estate is not actually owned by the tenant. Questions: 1. Am I remembering the mobil home/lot rent situation correctly? 2. Is RE Tax a legitimate, DEDUCTIBLE, component of independent living monthly payment?

Some changes made by IRS are good..... Always was April 15 was the dealine for filing personal income tax returns - even 16 or 17, if 15 was on a holiday or weekend. Starting this year, taxes are not due until you are nominated for a Cabinet position.

KC has given you the details - the "long story." The short story - No deduction in the situation you describe. You ask, "Why?" Because in your situation there is no "requirement" for rest (in order to be able to complete the trip.). Driver is not sitting at the turn-around terminal because he is "required to rest," he is sitting there because the load isn't ready. An added perspective, if the "wait time" gets excessive, i.e., by definition of union or company rules, then union or company, or both would have provision for Driver to check into a motel for legal "time off" before returning. Correct? One other consideration, is the "wait time" on-duty (line 4 on the log) or off-duty (line 1 on the log)? Well.......I guess my "short story" turned out to be longer........ O Well! this is life!

New client. HISTORY. TP (Pennsylvania resident) filed Articles of Incorporation (in Delaware) in October 2006. No Corp returns have been filed to date. CPA (PA resident) who set up Corp in DE, also did 2006 personal returns (Federal, two states and local)) and did not advise or inquire about Corp returns for 2006. TP has been taking a reasonable wage from Corp since inception. He is not the only employee. 941s, SUTA, FUTA all filed and up to date. To date, NO inquiry has arrived from DE or IRS about the absent Corp returns. HRB prepared personal returns for 2007. No discussion about who owns the Corp that generated the W-2. Apparently no questioning about whether taxpayer was even "involved" in any business enterprise. HRB (apparently) simply accepted TP info, as presented (W-2s, 1098), without asking any further questions, prepared the returns (Fed, two states and local). Apparenty no questioning about whether TP might be involved in any business. (He is sole shareholder in Corp.) TP came to me with 2008 W-2, 1098. I know the TP and have been aware of business activity. I asked for prior years returns. He gave me personal returns only. I asked, "Where are (1) prior years' corp returns and, (2) corp info to 2008 file corp returns?" He said "What Corp returns? I never thought I had to do anything with Corp - just file on my W-2." QUESTION. This scenario would seem to be adequate explanation to accompany late-filed 2553. My thought is to file 2553 ASAP with effective date of October 2006 - inception date of Corp. Reasonable approach? I am also thinking that it might be wise to file all prior year 1120s returns with 2553. Wise or 'premature' conclusion? Would it be better to file prior returns after 2553 accepted? Suggestions and/or comments appreciated. As to profit or loss from Corp activity, TP says, "I don't know. There is barely enough money to cover wages and expenses. I don't think I am making any money. I don't have anything extra." My observation - lifestle is not lavish or extravagant, but....... He apparently has not been keeping track. Gross Revenue for 2007 about $350,000. For 2008, about $650,000 - but those are "estimates!" Judging from (1) my observation and (2) wife's comments, I suspect there may be an NOL worth investigating.

Thanks all! I sometimes wonder if I am the idiot...... Please -- no opinions to that comment!!!!! Have a good day and thanks again.

Most clients have not been in military during any part of 2008. If I answer question correctly, i.e., "No" - no rebate is calculated. If I answer question INcorrectly, i.e., "Yes" - rebate calculates. If I IGNORE the question, i.e., don't answer it at all, the rebate calculates. I don't understand: 1. Why the worksheet is responding this way or, 2. What military involvement has to do with the Recover Rebate, other than requirement for SS #s. Am I missing something? Thanks,

One component of issue with at least a partial "easement", i.e., to make it easier for ME and to remind me..... With multi-tab capability with both MS IE and Firefox, I set a tab for checking last year's stimulus payment -- https://sa2.www4.irs.gov/irfof/IRServlet?ap...lectLanguage=en and do it for every client and put a copy of page into client's file (and their copy of the return.). Establish the tab and then "tools" "internet options" "general" and "use current." When I open MS IE, which is part of my start-up, that tab is there........waiting........seeing that tab often enough has been a good reminder to "check on it" i.e., get the info "from the horse's mouth!"

SS Card is normal for Amish these days, but they normally have no government issued photo identification and no passport. What have you done to document I-9? Thanks,

I have a client who has underpaid 944 deposits for 2007 and 2008. Using 8109 for additional deposits shows no place to designate what YEAR for which the deposits are being made. Anyone know how to designate an applicable YEAR for 8109 deposits?

What am I missing? What's the reason for the hoopla?

New client, Church minutes show Housing Allowance allocated as % of Pastor's wages, not a dollar amount. This is a new thought to me. Is it "acceptable" to be % of wages? Every suggestion for Church wording (that I have seen) for their minutes expresses HA as $, not %. btw, allocation done in advance - no problem with timing of Church action. Comments? Thanks,

There is another possibility. On your portable hard drive, find the files (returns) or the "Database" folder from the ATX program and then copy the contents of that "Database" folder. Then -- "My Computer" - "Program Files" - "ATX, 2007" - "Database" (If indeed "there are no returns at all in it yet" simply copy either: 1. The files into the "Database" folder or, 2. Copy the "Database" folder into the ATX program.

There is another possibility. On your portable hard drive, find the files (returns) or the "Database" folder from the ATX program and then copy the contents of that "Database" folder. Then -- "My Computer" - "Program Files" - "ATX, 2007" - "Database" (If indeed "there are no returns at all in it yet" simply copy either: 1. The files into the "Database" folder or, 2. Copy the "Database" folder into the ATX program.

I have a client, non-custodial parent, who has a signed 8332 with "all future years" written in section 2. Spouse, who signed the 8332 in 2003, is now claiming, on advice of spouse's lawyer, that the form is "not legal," and my client cannot claim the one dependent in question, simply because spouse is "objecting" and claiming, on advice of counsel, that the form is "not legal." I don't see anything in the "fine print" to negate the existing 8332. The other four dependency tests for exemption are met. Comments? Thanks,

Situation. S-Corp sole shareholder owns vehicle (window van) and uses for 100% business. Fuel and washing paid for by S-Corp. Depreciated on personal return. Question - how to handle the rest: 1. "Accountable plan" for monthly payments, insurance, repairs, registration, etc., reported by shareholder to S-Corp and reimbursement check inssued via "Petty Cash" - not in Payroll. Shareholder reports on 2106. 2. Eliminate the "Accountable Plan" and Shareholder report "reimbursement" and expenses, personally paid, on Schedule C, with 1099-Misc as documentation. I am thinking #2 is prefereable (1) to avoid Schedule A use, because taxpayer does not itemize, and (2) this "covers" the variance between the "loan" payment and depreciation. Question - does this NEED to show on K-1, rather than 1099, because more-than-2% Shareholder? Thanks,

Taxpayer, retail store, purchased an electric motor for walk-in cooler, cooling system. Motor is bolted down and "becomes permanent part of real estate," (IT is now a permanent part of the cooler, which is a permanent part of the building - built in, not "detachable.") according to taxpayer. He doesn't think he should have been charged sales tax BECAUSE the motor is now "part of the real estate." I am thinking it IS subject to sales tax because: 1. It is NOT an item for resale. 2. Even if it becomes part of the real estate, when purchased it was not "real property" category, therefore subject to PA sales tax. Comments? Thanks,

Good news is always welcome. Glad you shared it.

KC, Our prayers are with you as well. We were reading in RBC "Our Daily Bread" recently and attention was drawn to II Chronicles 16. Verse 12 (in New Living Translation) reads, "....Asa developed a...disease. Even when the disease became life threatening, he did not seek he Lord's help but sought help ONLY from the physicians. So he died..." The assumption is that if Asa had put his confidence in God, rather than in the physicians, he would not have died. I am not naive enough to ASSUME that seeking the Lord's help guarantees healing (God didn't heal the Apostle Paul's "affliction," but rather told him "My Grace is sufficient for you." God had something more important in allowing the affliction to continue, rather than eliminate it. God's Promise is for strength and help in time of need - "So let us come boldly to the throne of our gracious God. There we will receive His mercy, and we will find grace to help us when we need it." Hebrews 4:16. Even in the darkness hour, even in the most threatening and frightening of circumstances - "Even when I walk through the dark valley of death, I will not be afraid, for You are close beside me." Psalm 23:4

But those are not "S-Corp" salaries, are they?!?! Apples and oranges?!?!

Client tells me: 1. He has not received stimulus payment. 2. He received Social Security Disablity (NOT SS Retirement), well above $3,000 threshhold for stimulus payment qualification. His only other income is rental income, $4,500.00 net. 2007 return filed showing this $4,500 as his only income. 3. Friends of his, who have also been receiving SS Disability as their only income have received their stimulus payment. My reaction: 1. SS Disability does not qualify as "qualifying income" for stimulus payment AND, 2. SS Disability would not have had 1099-G issued, so we made no entry on 1040 as "SS received" - taxable or not is moot issue. 3. Rental income is not "qualifying income" for stimulus payment. 4. His "friends," therefore should NOT have received the stimulus payment. 5. The fact that client has not received stimulus payment is the way it should be. Am I missing something?

This thread, to me at least, would seem to be "making a mountain out of a molehill." Primary concern is whether: 1. S-Corp Shareholder is being paid a wage or not - grounds for refusal to prepare the return? No question. Either taxpayer dot's the i's and crosses the t's, or IRS will do it for them. I don't want IRS doing it for me, I will take care of this myself, thank you! Either cooperate with the wage-paying requirement or look for another Preparer - that's just the way it has to be. 2. Whether the wage paid is "reasonable?" This would seem to be a much wider "target" - since "reasonable" could be a substantial variable and defined somewhat differently be each of us. How do I comply with this requirement? A simple conclusion on my part. Perhaps to document my "conclusion" in my notes as to why the wage paid is reasonable. AND, remembering all the while, that the IRS auditor may not define "reasonable" in the same way I do, or the taxpayer does, for that matter. BUT, if my evaluation is that it is "reasonable," and I can provide reasoning to explain the "reasonableness," what more do I need to do?

S-Corp. One situation, two employees, both with COMPANY PAID HSA contributions and COMPANY PAID (high deductible) Health Insurance premiums (not part of a cafeteria plan): 1. Regular employee and, 2. 2%+ Shareholder. I am assuming my thinking is correct that regular employee would have: 1. For HSA, no increase in payroll for wages for income tax, SUTA, FUTA, WC, federal or state. Increase in FICA and Medicare wages by the amount of the employer paid contribution. And this would show on W-2 in box 12, Code A. 2. For Health Ins. premium. No increase in wages appearing ANYWHERE in payroll and only on the W-2 in box 14 as an information item (and this would NOT be a required reporting item) - and not deductible by the employee as Itemized Medical. BUT, medical expenses would need to be limited by the amount of premium paid by the employER. And, of course, for both HSA and Health Ins premium, there would be no payroll deduction, because it is employER paid, not employEE paid. Correct so far? My uncertainty is how to handle for 2%+ Shareholder. Because this is part of a Group Plan, does either item needed to be added to wages, and what part, For Income, For FICA and Medicare, or both. Because it is part of a Group Plan, IF it is added to wages, does this still qualify for 1040, page 1 adjustment, since this is NOT "Self-Employed Insurance" but a component of a Group Plan? Thanks