Gail in Virginia

Hello,

I came this board highly recommended for a situation that I have. I am filing a tax return that includes timber tax. Problem is that when doing the research I find conflicting ways of how to enter the information into a return. (Please bear with me as both my mother (86) and myself (60) have always had our taxes done and our local preparer had moved.

My mother sold timber as a pay as you cut contract. From what I can gather this classifies her in a 631( B ) IRS Code. She has had the land since 1966 when it was sold to her by my grandmother. She told 12,000 dollars worth of timber off of the land for improvements to the farm house.

I know that onthe timbertax.org website it states that a 4797 needs to be filed. If it is a gain then a Sch D also needs to be filed in addition to the 4797.

"The gain or loss from a pay-as-cut contract (disposal with an economic interest retained) is figured the same way as a lump-sum sale. The gain or loss is then reported on Form 4797, along with any other Section 1231 transactions. The gain and losses from Section 1231 transactions are netted on Form 4797 to determine if your net gain or loss. If a net gain results the amount is reported on Part II of Schedule D, Form 1040. If the netting of gains and losses from Form 4797 results in a loss it is treated as an ordinary loss and as such is deductible in the year in which it incurred up to the $3000.00 limit."

Also a question on the Sch D, The cost is listed as 12000 dollars but the basis is stumping me. Is this the basis for the same amount of wood before the cut or the basis of the entire land.

Some websites say that a Sch T (timber) form should also be filled out but for this situation, I don't think it is necessary or not required as she still owns the land. Biggest problem is I don't know all what forms to add for this. The rest of her return, I can complete but timber tax has gotten me beat.

I hope someone can shed some light as I have heard good things about the people here and on the old non-existant board.

Thanks, Bernard

Bernard,

You seem to be on the right track with reporting the timber sale. The basis for determining her gain (or loss) is the amount she paid for the timber originally. If she bought the land the timber is on in 1966 for $12000, was there timber on it then and could a portion of the cost be allocated to the purchase of the standing timber at that time? If so, then that is her basis in the timber and it would reduce her basis in the land. If there was no timber of any value at the time she purchased the land, then the entire $12000 purchase price would be considered basis in the land. If she did not purchase the land, but received it as a gift from your grandmother, then her basis in the land is usually grandmother's basis in the land. This is a simplification of the basis rules, but it looks like the "cost" you are using on the 4797 is what she received for the timber if I understand your post. What she received for the timber is proceeds.

Good luck

Gail

A few months ago I had a thread about a university buying a property of a legally blind employee for campus expansion. After much negotiation (he brought in his frat brother who is an ADA attorney), he finally accepted an offer of $575,000 and the university agreed to provide transporation to and from work at no cost (neither 1099 nor wages) if he purchases a home within a 5 mile radius. As there are a couple of really nice pedestrian, desirable neighborhoods within that space, he is comfortable with this arrangement and I am encouraging him to buy as much as he can within reason. These are areas that are close to downtown, desirable and will only increase in value. He has decided to continue working until 65 at least and defer as much income as possible to bulk up retirement, then sell his new home sometime after retirement and relocate to a smaller, less expensive area.

Thanks to all here who gave input into this situation. It really helped him, and me, rethink some of the options presented originally.

Thanks for letting us know how the situation turned out. In cases like this, it is nice to hear the resolution of situations we follow on the board.

Nice to hear that the seminar is worthwhile. We will be going to the one in Charlotte on Oct 25. I have only used the program for two years, and am looking forward to some shortcuts and efficiencies, as well as learning more about customizing the program. I know there are some aspects of the program that I don't use at all because it has seemed to be more trouble to figure out how to use them than it is to just work around them.

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I'm sure IRS bankers are trained like any other banker, to post from the actual check instead of the deposit slip.

I am not so sure of that. In the first place, I don't think we are dealing with IRS employees - I think the payments all go to a lockbox operation. And in the second place, with it being a lockbox, I am not sure they even look at the checks. I think they peel the checks off and deposit them, and then turn around and forward the coupons to the IRS to credit the accounts. Them most that I think they will do is compare the check amount with the payment coupon amount.

My gut reaction would be to go the stop payment route - but this is not something I have personal experience with.

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I am also a one person office. I use Hartford Insurance. I think it is reasonable. $10,000 each claim and cost is under $200 for tax prep only, no bookkeeping.

Ours is with Travelers, and the annual premium is around $700. However, we do bookkeeping and payroll in addition to taxes and have three to five people in the office.

Does anyone run ATX on Microsoft Windows Server 2003 operating system?

Last year, we upgraded our server to Windows Server 2003 which we cleared with tech support before doing so. But that was before CCH buyout. Now, as I load disks like ATX Document Manager and Trial Balance, I get pop up windows that say "Microsoft Windows Server 2003 is not a recommended OS for running ATX Products" or "Windows Server 2003 is not a recommended OS for running UTS products."

I'm just wondering what's going to happen when I load the 2007 tax program? Will it work or should I be thinking about putting my server back on Windows XP?

I will call tech support, but sometimes the canned answers they give you don't jive with what users are actually experiencing. Does anyone have experience with this?

Thanks for your input.

We just upgraded to 2003, and I got the same messages. I have been meaning to call tech support, but you know how that is... I need to get a round tuit. Please post the gist of what you find out - I would like to know.

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I won't be on the board much for a while. My husband had a stroke Friday, and is still in ICU. Please pray for him and for me.

We will miss you, but some things are WAY more important. I hope your husband has a complete recovery, and please remember to take care of yourself while you are taking care of him. My thoughts and prayers will be with you!

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Thanks for the recommendation. That goes back to jainen's original suggestion in a sense, but the process of justifying the entry to the balance sheet creates a bit of a dilemma. I've now learned that when someone "diverts" money from a tax-exempt, it is supposed to be disclosed on the 990 as an "Excess Benefit Transaction" to a "Disqualified Person". (I don't like to use the "E" word because it's such a loaded term.) Since the organization was not required to file the 990 in the year this occurred, that may give them an out and allow me to just create a balance sheet as of the beginning of the year, but I don't want to jump to that conclusion. Also, there's the question of where exactly to show it on the balance sheet, because there are very specific Asset categories, including an ominous-sounding "Receivables from other disqualified persons". The plot thickens.

I am wondering what year the restitution agreement was reached? Would that be the year in which an entry would be made on line 11 (or line 8 for an EZ) for the entire amount receivable and then in future years as the receivable is reduced, it would not be necessary to revisit this. I am also wondering, with a $4000 deficit, and only $400 received this year, if any part of the restitution is to be counted as interest on the money diverted. I am rather glad that this is not one that I have to do. B)

I'm working on a personal return with a passthrough from a partnership on line 13 E on Schedule K-1. Can someone tell me why it is not transferring to Schedule A? (Line 13 E is for non-cash contributions (30%)

I don't know, but do you need to add an 8283 (Non-cash contributions) form to the return first? I would not think so, but it might work.

I agree that people are not being held responsible, and I know that my lack of debt will hurt when my son gets ready for college in a couple of years and we are trying to get financial aid. Nevertheless, I sleep soundly at night not worrying about someone coming to repossess my house or my car. If they want to repossess my son, we can work that out - anyone ever read "The Ransom of Red Chief" by O. Henry?

http://www.taxalmanac.org/index.php/Highli...007_Tax_Changes

taxbilly

Thanks, Taxbilly. I appreciate links like this! :)

I am still trying to decide whether to renew for 2007. Has anyone heard about any 2007 enhancements or updates? I have been surprised that I have not received any communication or correspondence since May. Just curious.

The only enhancements that I have heard about were announced some time ago, so you may have already heard that they have added a trial balance software and a document managment software to the Total Tax Office program. I have not yet had time to look at whether they are actually enhancements for me personally yet.

Ok, I bought 1040 Office which is supposed to have all states, but when I put in a new 2005 return, it prompted me to use PRS for the state return. I did, because it was the weekend and tech support was closed. See other post below, where I determined I was supposed to have all 50 states. Finally called up tech support at 6:30 am my time since they aren't open by the time I get home from work. They had me reload the program and put in a new program code. I installed all states. So I try to amend this return I proforma'd that made me use PRS to get the VA form. Still prompts me to use another PRS return. So I delete the state return and re-add it. Adds just fine. Try to amend, it prompts me to use a PRS return. I'm starting to get pissed. So for fun, I try to add a VT return; that adds fine. So either I have to proforma the entire thing again, and add the changes wrought by the CP2000 she got so I can do the amendment (need to do state and fed). Tried to just add the 1040X, but it isn't calculating correctly if I do that.

I'm just trying to amend fed to change from single to HOH, and amend VA to account for additional income from CP2000 notice client got and change from single to HOH. Anyone have any ideas? I'd call sales and ask them to reinstate the damn PRS returns, but THEY'RE CLOSED!!!!!!

Don't we have a smiley that is pulling its hair out?

Joan, VA doesn't have a separate form for amending their return - you use the same form and mark it as amended. If the VA return is adding, you are probably ok to amend. If I have totally missed your point, I apologize, but if I can help with your VA return just let me know.

I too was a bit turned off about the price of this 'training'. I think if you buy the software, and certainly if you buy one of the 'premium' packages, the training should be free or at a very minimal price. For one thing, almost everyone who takes the course will be providing help to other users over the course of the tax season.

I wonder if they will get enough paying customers to support those sessions? Or will we just skip them, because we see it as expensive enough to travel to take the session, without having to pay a hefty fee to learn to use their program? I'm interested to hear who and how many of our group intends to go to one?

We are thinking about it in our office. If we go, it will probably be to the one in Charlotte. I understand the feelings about the price, but having paid as much or more for similar training when we were with TaxWise, we did not experience the sticker shock. And when we took the training from TaxWise, we learned so many better ways of doing things that I felt like the price was made up for in increased efficiency. I can't necessarily say that about this seminar, since we have not done it yet.

>>Heinlein's Stranger in a Strange Land's occupation of "Fair Witness"<<

Of course! Thank you -- obviously I myself would not be any good at that occupation.

I could not either - one of the main requirements was never let your statements be tainted by your opinions: facts only. I have way too many opinions and am way too free in expressing them! :lol: