jainen

>>How does Mr. Intuit know that I have ATX?<< IRS sold them your name, of course. A lot of information about e-file providers is available to the public.

>>The rule is based on convenience for the IRS rather than on individual fairness. But it is what it is. As Jack said " Essentially, there was so much fraud with the Hope Credit, that this was put in place."<< I think the reason was more technical than just "convenience for the IRS." The 2009 law greatly expanded this credit and even allowed it in addition to other personal credits that already reduced tax liability. The new refundable portion was tied to existing kiddie tax standards in a complex coordination with the other credits. The purpose was consistency and fairness, not fraud prevention.;

>>What does parents being alive got to do with this situation?<< It is in reference to the Kiddie Tax rules of Section 1(g), which limit tax benefits for families who shift investment income to children in a lower bracket. These apply even if the child is not a dependent, unless the child's earnings (i.e. non-investment income) is more than half his or her support.

>>some penalties are not related to percentage of tax due<< This one is. According to Instructions for Form 709, penalties are assessed under Section 6651. That's the same as Form 1040, so it's 5% per month (25% max) of tax due, in addition to late payment penalties and interest if any. Unfortunately there is a $135 minimum after 60 days, unless due to reasonable cause and not willful neglect.

>>represented himself?<< No, he had two lawyers. But he did his own taxes, with a masters degree in business taxation and a quarter million dollar solo tax practice. But he was raised on a dairy, so he bought a ranch and some Morgans and proceeded to claim losses for 16 years totaling one and a half million. Personally I found his business efforts to be fairly substantial compared to a lot of my clients. Interesting read.

A new Tax Court ruling focused on lack of a business plan. TC Memo 2013-76 "Lack of profit objective was shown by overall evidence, including that taxpayer didn't carry on activity in businesslike manner in that, although he advertised horses and attended horse shows, he didn't have business plan that went beyond more than generalized goals, didn't maintain budget or make financial projections, commingled activity and personal finances, and didn't loss-controlling measures or show if he investigated potential profitability of his strategy of switching stallions in certain years. It was also telling that he used activity losses to offset significant income from his accounting firm. Arguments that lack of profits was due to factors beyond taxpayer's control and that he was still in startup stage because he switched type of horses he was trying to breed were unpersuasive."

>>the spot to put the NOL carryforward (I'm told through software) is in the "other income line 21" which is outside of the schedule C.<< That's the same thing IRS says! According to Pub 536, "If you carry forward your NOL to a tax year after the NOL year, list your NOL deduction as a negative figure on the Other income line of Form 1040." As you observe, that is outside Schedule C so SE tax is simply not affected at all by an NOL carryover. It is even clearer for a carryback year where tax has already been calculated. "While it is necessary to refigure your income tax, alternative minimum tax, and credits, do not refigure your self-employment tax."

>>I am speechless... completely in the dark<< Read the INSTRUCTIONS... you will be enlightened and have something to say!

>>If the money has been dispersed to another agency that agency won't give it back. It's pointless to send the form now.<< Didn't we just have this discussion last week? According to the Instructions for Form 8379, the IRS will process the claim faster if you wait until the offset has been completed. Instructions--what a concept!

>>Am I missing something somewhere?<< Yes, you need to reduce tax attributes in Part II. If you use line 10b you will also have to change the amount of gain or loss on the foreclosure.

>>Wages same as SS Wages.... Ca. Wages are increased<< California does not conform to HSA's. That means employEE contributions are not deducted (Form 1040 line 25) and employER contributions are not excluded (W-2 Box 1). That is why California wages are higher than federal and Social Security wages. For the same reason, medical bills paid with HSA funds are still deductible for California, and taxable HSA distributions are tax-free for California. As you noticed, Code W amount was also excluded from FICA so Boxes 1, 3, and 5 are the same.. Pub 969 says, "Amounts you contribute to your employees' HSAs are generally not subject to employment taxes."

>>client said... client said...<< Yes, they say all sorts of things that aren't part of tax preparation. >>.so, how would you handle "the haggle"?<< I certainly don't identify it with "non-Americans."

>>you and others would welcome their software with open arms<< Why not? I can't think of a better time to convert to an entirely new system than the last week of March!

>>I deal with lots of non-Americans<< I get it that New York is a cosmopolitan place. I just don't understand why you bring up ethnicity so much in terms of tax preparation. I didn't see it as an issue even in the particular question of residency. Then you made a point of it in posts about cancellation of debt. Now surely ethnic background is irrelevant at least in a discussion of pricing?

>>good resource where I can learn more about partnerships<< Pub 541 is a decent intro. It's only a dozen pages but covers the basics, including formation, distributions and other transactions between the entity and the partners. Remember that joint ownership of rental property is not necessarily a partnership. See how the attorney writes it up before you make decisions.

>>the cite<< Obviously the entire topic is still being sorted out. Family Code Section 299.2 is the relevant law. "A legal union of two persons of the same sex, other than a marriage, that was validly formed in another jurisdiction, and that is substantially equivalent to a [California] domestic partnership..." Spidell (Big Blue Book) says, "NOTE: States that consider civil unions as marriages appear to be excluded from the substantially equivalent test." Last year Spidell reported that the California Attorney General had declined to name such states. On the other hand, the New Jersey law was written to meet court objections to its earlier domestic partners law, so maybe it does count. I know at least one thing New Jersey does not allow is full spousal pension rights for self-employed taxpayers. I would guess you are going to treat them as RDP's anyway. I would! Half the California wages are taxed to the NJ partner on the separate federal return. You will probably want joint returns for each state. Report total income on each regardless of where it was earned.

>>Is that not true for all antique dealers<< I don't think so. Personal property held for resale is inventory, not a capital asset. Real Estate can NEVER be inventory by definition, even when it is held for sale to customers.

>>he's out of luck<< Not at all. If he had allocated basis to the retained mineral rights, his capital gain would have been that much higher. The rate in 1998 was 20%, 25%, or 28%. Now it's only 15%, and he has all the time value of money as well!

>>back when I went to school<< That was before they built UC Santa Cruz, literally on Cow-ell Ranch. Good place to go if you want to worship cows.

>>I am surprised Jainen did not write this post.<< In other situations I have argued for Schedule C treatment when the taxpayer does substantial repairs or improvements. In that case the increase in value comes from the work being done, a classic business model. In the original post, property was only cleaned and painted. Increase in value came from market forces, the definition of investment.

>>They became a civil union in NJ, and that relationship is recognized in CA<< No. A New Jersey civil union is NOT considered "substantially equivalent" to California laws for same-sex marriage and registered domestic partners. They must file California returns using the same filing status as their federal returns. And they can't use community property laws to allocate income away from the wage-earner..

>>Did Sandy victims get relief from the casualty loss haircut<< Sandy was a federally declared disaster in specific counties, but did not get the extra relief provisions of Katrina. Be sure to check if the loss fits on preceding year.

>>why was SS & Medicare withheld?<< Start on page 15 of Pub 15-A. It sounds to me like the employer should indeed issue the W-2 and may be delinquent on payroll taxes. Tell Ms Attitude to do everyone a favor by asking her supervisor.

>>I would like for it to be automagically added when I add a Schedule D<< Maybe you should check out different programs. Instead of forms, some software offers worksheet mode for data entry. Of course, that has shortcomings too. Some programs let you enter data both ways.

>>he works with many of the teachers in the district<< Some preparers on this forum also focus on a particular market niche. They learn all the obscure rulings and audit procedures that apply, and provide very good service at low price within that niche. If you don't care to compete with that business model, don't stress about it. Remember the salesman's mantra of 3SW--some will, some won't, so what?