jainen

>>truly believe my name should be off the return<< I disagree. You signed your name to work you did under the terms of a professional engagement. In my opinion, you can't disavow that just because you now regret that you accepted inaccurate or incomplete information or were otherwise unable to control the interview. I suggest you make sure your files are in order, and then get busy with the next client.

>>the payer refused stating that the code 1 is correct<< I agree with the payer. You have not described what if any proof of disability was actually given to the payer, but in any case they have no obligation to evaluate the medical condition. Nor are they required to understand that his substantial earnings do not constitute an ability to do gainful work. In fact, I very greatly doubt that your client even wants his former employer to know his medical details. In my opinion, you have no basis and no reason to question the 1099. Use the 5329 instead.

>>How do I advise him to avoid breaking any client confidentiality?<< In my opinion, really more of a guess, you still only have a POTENTIAL conflict of interest, no more or less than you've always had. Review your engagement letter and other records carefully to see who exactly is your client, either or both of the individuals or the LLC and/or partnership. Your friend can help by giving you the partnership agreement, memos, paystubs, insurance endorsements, or other documents that show a valid partnership was formed (assuming of course that he WANTS to show that, an assumption I can make but you can not!) Being discreet with the old man's information is no problem because your friend undoubtedly already knows all about it. What would really be fun is if the engagement letter was signed by your friend or indicated he was the tax matters partner, so you give him the 1065 to file! (Okay, it might not be so much fun, depending on what relationship is involved in the word "step.")

>>What's the harm in trying?<< Ummm -- double taxation on the spouse who already filed? Penalty for filing a frivolous return after being specifically warned? Delay in qualifying for the payment agreement (which was the real goal), with accelerated collection action? Wifey now personally responsible for the rest of the tax liability? Ah, never mind, I'm just a pessimist. It would probably work out fine. It's not like the IRS computers check to see if a Social Security number is already on a different return or anything.

>> It does not cite the Tax Code << As I understand it, amended returns are more a matter of administrative convenience, although the tax code does have certain references to amendments for specific issues. Generally the IRS is free to accept, deny, or ignore amended returns according to their own standards. In my opinion, taxpayers have little grounds for appeal unless they can show they are not getting equal treatment.

>>can the LP own 100% of the LLCs taxed as S corporations?<< In my opinion, an S-Corp can not be owned by a partnership. In my opinion, you need to do some basic tax planning before you attempt such a complicated structure of interlocking entities.

>will having it as a rental for approx 1 year kill the credit << Yes, in my opinion rental use will kill the credit -- at least, if it was structured as every summer for the last four years. They need five years of continuous use during the last eight years. >>I'm considering amending 2008 and reporting the rental income as "income from rental of personal property but not in the business of renting such property".<< Why ever would you consider THAT? >>I'm also concerned that this will send the IRS a red flag.<< Well, at least we are in complete agreement on this point!.

>>Department for Families and Children<< Eligible foster children, placed by the appropriate agency, are treated the same as natural children. If they meet the requirements to be qualifying children (which presumably these do), then the father's claim under the qualifying relative rules would be disallowed. Unfortunately, you can only resolve this by paper filing with some later correspondence. In my opinion, the tax preparer should not take on the entire responsibility for this decision. Considering the children's best interest (including safety), the family should be referred to the placement agency and their own attorney for guidance.

>>PIP required of Florida auto owners is deductible<< In my opinion, auto insurance never qualifies as a deductible medical expense. Personal Injury Protection covers all occupants of a car, not just the taxpayer's family.

>>your imposter on the QF forum?<< I resemble that remark. I imposted the new screen name myself in connection with an otherwise thoroughly unsuccessful computer upgrade which I blame entirely on my collegely graduated progeny.

>>The mere fact that she died before she would have received the $250 does not disqualify her from the payment.<< Umm, yes, I do believe it does. In my opinion, death is somewhat more than a "mere fact."

>>have a loss this year and next year have a 1099-C to deal with<< Why do you think there will be a 1099-C to deal with?

>> qualified for the $250 SS payment in 2009 but passed away before it was received << This taxpayer did NOT qualify for the payment because he or she died weeks before the check was issued. Social Security is generally not supposed to pay benefits to dead people.

>>FMV before casualty: I am using what the insurance company appraised $24,900<< Insurance typically uses the cost of repair or replacement as the amount of damage. The casualty rule uses the loss in FMV, so it wants you to record the value of the undamaged property before the event with the value after. In many cases the difference will equal the cost to restore it, but in my opinion that should not be assumed. If for example the basement was already in terrible condition and needed a complete restoration anyway, flooding might not make it worth less. On the other hand, minor staining might cost little to repair yet have a significant adverse affect on potential buyers.

>>Time spent in each home is equal<< On my calendar there were 365 nights in 2009, so unless the litigants were still living together the child couldn't be in two places at the same time. In my opinion you should follow the regs literally, including the one that specifically says a court decree can not be used to determine custody for tax purposes. I would guess the spouse has already figured this out, in which case you are wasting your time.

>>Seemed to have worked so far<< I'm always uncomfortable with this sort of reasoning. Whatever their attitude in the past, it seems obvious to me that the IRS has upgraded their standards for Schedule D. A couple of years ago they specifically warned practitioners to use the D-1 (or equivalent) correctly, and now they are requiring more information on the 1099s. This comes while Congress itself has been highlighting capital gains as a major concern for tax reform. So I ask again, "Why not just use lines 2 and 9 in the normal way, so as not to draw attention with entries that don't match the 1099-B?"

>> Is there a potential of submitting documentation to the examiner involved to resolve withOUT court involvement?<< Yes, but it is remote and risky. The IRS is notorious for being uncooperative about Notices of Deficiency (well, to take their side this was not the first contact), and once the 90 days run it is almost impossible to change anything. Since your issue is pretty simple, you might try the humble penitant approach, but if you don't see major progress within one month go to Plan B. Plan B has little court involvement. You just file the petition, at which point your rights are preserved but the court kicks the whole thing back to Appeals, where it will probably be resolved with one phone call and a fax. Now, I said your issue is simple, but so far you have it entirely wrong. The divorce decree is basically irrelevant, especially if it is only a few years old. So is whoever filed first. What matters is where the child lived, defined as the most number of nights in the calendar year, and whether a Form 8332 was filed. I recommend you review the current Pub 17 or other reference for dependency rules, apply them literally, and support your position with solid documentation.

>>The borrow promised to pay seven equal payments at a fix rate of 25%<< In my opinion, that's a felony called usury. As there was never any enforceable debt, there is no deductible loss.

>>one objection I have to it<< In my opinion, both these facts make better arguments FOR e-file than against it. To know that the return was actually filed and accepted exactly the way I prepared it is )something I would put a lot of effort into--except that it takes even less effort than assembling a paper return! (Assuming, of course, that one is not also opposed to electronic preparation.) As to freeing the IRS from unnecessary, redundant data entry so it can efficiently address other responsibilities, I like that idea too. I suggest you take a page from every salesman's handbook--the assumption close. Don't make a big deal about this with special letters or different options. Treat it as a done deal (which it is anyway), and just assume that everyone agrees or at least accepts the rules we live by. When California went mandatory years ago, we expected all kinds of resistance but were surprised that almost everybody either just shrugged or openly encouraged the change. Within a week we realized that we could simply refuse as clients anybody who demanded special handling, so that first year we had 100% efile (except MFS in this community property state) and lost nobody.

>>transactions with dates " purchase 01/01/08, sold 12/31/08"<< Why not just use lines 2 and 9 in the normal way, so as not to draw attention with entries that don't match the 1099-B?

>>In this case fully deductible?<< In WHAT case? You haven't mentioned what the legal fees were for. >>appraisal fees, title work and transfer on death fees<< I presume title work is an addition to basis and the rest are miscellaneous deductions for the estate, but again, you haven't mentioned what the purpose of these expenses was.

>>we ought to just keep creating this new money indefinitely<< It pretty much looks like that's the plan, don't you think? Pretty much the only plan? As to multiplier effect, it is always chugging away. But in my opinion it works about the same whether I buy a car or I give the money to the government and they buy a car (though I would of course prefer to choose myself). The problem is that I can only give the government some part of my limited earnings, that I actually have. With homebuying, I can prime the multiplier pump with hundreds of thousands of dollars that never even existed until the bank wrote the check. That's because the banks only have to hold 10% in reserve. Some people think that means if the bank gets a million dollars in deposits, they can lend out $900,000. But bankers think it means that if they get a million dollars in deposits, they can lend out TEN million. And so that's what they do.

>>I as a taxpayer am very uncomfortable with our government giving away such large sums of money<< In order to get this $8000 "gift," the taxpayer must spend at least ten times that much, with most houses costing thirty or forty times as much. And that expense also covers the broker's commission, which at 6% will likely be upwards of $15000 just for that one thing. And the broker pays 25% of that in tax, and whatever else he spends it on generates even more taxes and so on down the line. Same thing with the seller's proceeds. The idea is that this big injection of money into the economy pulls in far more in taxes than it pays out. In some ways this is similar to the old Republican argument that cutting taxes lets people have more to spend, but that is flawed in that the government was going to plow the taxes back into the economy just the same. With homebuying, NEW money is created because the banks are allowed to write loans far in excess of their actual reserves.

>>He ordered her to keep the house cleaned, dishes washed, lawn mowed, laundry washed, and hot meals on the table<< The fourth man moved in with a woman from California. While she was at work, he taped up the frayed cord on her vacuum cleaner, rinsed and stacked the dishes, tried to fix the lawnmower but busted it worse, decided his shirt wasn't that dirty after all, and cut out a pizza coupon so she can go get them something to eat 'cause he already finished all the rice stuff in the slow cooker when he got the munchies. Oh yeah, he also finally nailed the intro to "Cinnamon Girl."

>>i get vodka or wine<< I only get creamed honey, cupcakes, a small candle, and some kind of energizer vitamins. But once a client picked me up hitchhiking!