jainen

>>How would you approach the FTB.<< Franchise Tax Board audits 100% of paper-filed HoH returns over a three year cycle, but it is very minor and as JRS said it is easy to fix. Just fill out the questionnaire before you call so you can fax it in. This is another reason to electronically file, because you can include Form 4803e at the same time and avoid the audit letter completely.

>> if your debt is canceled and the lender must file Form 1099-C, the lender may include the information about the abandonment on that form instead of on Form 1099-A (I am assuming that if the information is already included in the 1099-A a 1099-C may not be issued)<< It seems to me that your assumption is the opposite of what your quotation says. As I read Pub 544, the lender is always required to issue a 1099-C when debt is canceled. They can issue a separate 1099-A (if, for example, it is at a different time) or include both the foreclosure and the cancellation of debt on the 1099-C. Apparently your client's debt was not cancelled at the time of foreclosure, because he didn't get the required 1099-C. This is very common with rental property, which normally have recourse loans. In my opinion your client must recognize gain or loss on the foreclosure in 2009, but he is still obligated to pay the rest of his debt.

>>if she owns it and is responsible for it, why should he have anything to do with the selling price or proceeds?<< Based on this more complete account, I will upgrade my guess to an assumption. I assume he had no gain or loss because his half of the sale was simply a property settlement pursuant to the divorce decree in which title had been transferred to his former sweetie.

>>What about the seller's concession for $8,500?<< It is further proof that the buyer and seller agreed the appraised value was much higher than actual FMV.

>>What do you think is missing?<< What is missing is whatever the court ruling might actually say one way or another. I do not agree that custody is synonymous with placement. In my opinion (though I am not a lawyer) they are two separate issues.

>> meets the test under Pub. 501 for Foster child.<< I'll give credit for originality, but I don't think it will fly. "Custody" would be a very odd word for a court to use if it intends to place a foster child, because custody implies a long-term parental or guardian relationship that is specifically absent in the foster arrangement. I would be cautiously open to reading the actual decree, but without further evidence I would leave this as qualifying relative.

>>It is easy to miss when being processed.<< ... one more example of why electronic filing is so much better.

>>despite the legal co-custody agreement<< The custody agreement is a matter of state law, which generally does not affect federal taxation except in specific circumstances. However, it may affect STATE taxation. In California, for example, the custodial parent is the one named in the divorce decree, regardless of number of nights in the home. In many cases a child should be a dependent on one parent's federal return and the other parent's state return. (I say "should," because nobody really does it that way.)

>>Lower price 'cuz seller was looking for a quick sale<< The licensed appraisal only gave an estimate based on general market conditions for a theoretical buyer and seller. Obviously those conditions did not completely apply to this particular transaction, because almost immediately the actual buyer and seller ignored them. In my opinion it would be unconscionable to pretend that he lost $30,000 in two months, unless you can show that property values were otherwise crashing at a rate of 90% last year.

>>the coworker wondering about BLIND drivers<< Oh, now I get the joke! Blind drivers, ha-ha. And here I was thinking "Idiot Sightings" was a clever pun on the storyteller, who apparently has the common form of blindness called red/green. My friends, let us be sensitive. Blindness is no joke. Disability access is no joke. Our country can be proud of many things, but surely the American Disabilities Act is one of the finest.

>>This is the correct answer for the MFS, HOH question, in its entirety<< Not in its entirety--for Head of Household, the CHILD must also be a qualifying child or a qualifying relative. (Wow, now even I'm starting to sound like jainen!)

<<I have searched all the posts on this<< Did you search this post?... My link

>>The stoplight on the corner buzzes when it's safe to cross the street... I explained that it signals blind people when the light is red.<< Thanks for explaining that.

>>She asked the person behind the counter for "minimal lettuce." << Where I live, you don't even have to ask. All they give you is minimal anyway. >>"That's why we ask."<< In other words, "we're going to rummage through your undies, so when we find that tube of toothpaste don't try changing your story and saying you didn't know it was there!"

>>He did have a complete original set of closing docs<< Good! Tell him you need to read them. And the complete divorce decree. And the rental agreement. Then--READ them! Since "ex-wife owned house," how come "HE was renting it out"? How do you figure it was his principal residence in 2006 since he moved out the year before and never returned because his marriage was breaking up while he was soon to be married to someone else? Can I make a guess? I guess he had no gain or loss because his half of the sale was simply a property settlement pursuant to the divorce decree in which title had been transferred to his former sweetie.

>>kiddy tax can be very unfair. It's all situation based.<< Can we assume you would favor a flat tax, so that everyone pays the same tax regardless of their individual situation? ******************* >>is the father trying to move his investments into his kids names to avoid tax or if the kid is just unlucky << Can we assume you would oppose a flat tax, so that some people pay less tax depending on their individual situation? *******************

>>she is not going to the hospital as a charitable act,<< I never thought about it before, but it is an interesting idea. There are many kinds of non-monetary benefits to community service, and they don't necessarily prevent tax deductions. But I would probably say no to this. First, although I understand there is some authority for it, I am not comfortable deducting mileage that is analogous to commuting. I also agree with kc that just having some element of community service does not make an activity charity. I mean, would you deduct mileage back to jail for a prisoner on work release, just because he has to join the road cleanup crew on weekends?

>>why anyone ever objects to the flying of our flag<< In my experience, this is an extremely common restriction in the CCR's of homeowner and neighborhood associations. They don't usually limit any particular flag, but all flags. Some people apparently find flags to be distracting both visually and with noise. While one might consider this to be an advantage in some settings, it may not fit in with the character of a quiet residential neighborhood. Among many other wonderful freedoms, our flag stands for freedom of association and freedom to control private property so Americans have the right to self-determine many aspects of their own neighborhood. If someone doesn't like the neighborhood, then why ever would they want to live there? Why would they buy a house with a deed restriction that says they have to accept the neighborhood's current or future standards, if they don't want to be subject to that kind of rule? There's plenty of other great places to live. Sure, a Medal of Honor winner should be allowed to fly the Flag. And he can. Anybody can.

>>we are NOT a democracy; we are a Constitutional Republic<< Certainly. That is why the article says the neighborhood association was involved, not just individual opinions. But just like in government, it is easy to subvert the system by calling in the TV cameras. So that's what this patriot did--none of this American voting stuff for him. And nothing makes a better photo op than Old Glory.

>>If our ancestors in the 1700s would have followed your logic, we would NOT have our country today. << Well, I believe that's exactly the logic they DID follow. They said one person couldn't just come in and do whatever--everybody had to agree. They used an old Greek word to describe this theory, democracy.

>>Our politicians ought to be lined up and shot! And I mean ALL OF THEM!<< As an American citizen I object to your suggestion that public servants deserve capital punishment for taking positions you don't agree with. That is simply not how democracy works. In my opinion it is reasonable to require income earned within a family setting, subject to family tax breaks for dependents, be taxed at family rates. If you have a different opinion, you can work through our democracy to change the laws. There is not even an entrenched lobby supporting kiddie tax, so if you can't swing it you should consider how attractive your arguments may be.

>>Is that fair?<< My definition of "fair" is that everyone has equal access to the same rights and benefits. I know that exercising your rights can be complicated, though, which is why professionals are available to help. In my opinion nobody should sue the government without a lawyer, and a lawyer would certainly not have let you "ignore the court date." In the years since your unfortunate miscommunication, additional protections have been developed so that now you can sometimes get assessments changed even after it's been to court.

>>she will eventually go back to Washington but apparently not the near future<< In my opinion, you are describing a person who is currently a resident of Virginia but is domiliced in Washington. I wouldn't worry too much about it, though--Washington state doesn't have an income tax either.

>>His reports were filed correctly<< In my opinion the celebrity got more notice than was warranted, but I wouldn't go so far as to say it was an IRS problem. According to someone the L.A. Times identifies as his business manager, the taxpayer used his SSN on IRS forms while reporting the same payments to Social Security under a different EIN. And it is very well established that the IRS only has to send notices to the address on the tax return. But it does make for mighty fine publicity in an election year.

>>still charging him a fee for THEIR mistake << According to the article, the mistake was in "Schwarzenegger’s payroll tax records." And you gotta love the chutzpah of saying that as a security measure he doesn't pay any attention to who is contacting him.