Gail in Virginia

Your bass guitar looks just like my son's. Ibanez?

I think the picture might be Ibanez but I actually play a Fender Squier.

Just proforma'd a 2005 return to amend tonight, and my software went to PRS for the VA return. I counted and had done 5 different states already in 2005. But I thought that with the Office package you got all 50 states. Can't find any of the old catalogues, so is my memory correct or did it only come with 5 states? Since I still had a few returns left on PRS it isn't such a big deal, but still....

If you are talking about Total Tax Office, I think you are right and you should have gotten all 50 states. Do you still have your invoice where you paid ATX for the 2005 software? I think that lists the features of the package you are buying and you could look at that.

:bday:

Be careful about kiddie tax - your real life example has him pay tax at his own rate if he is 19, and that is correct for 2006. However, it is being changed to 18 or a full-time student under 24 claimed on parent's return. In that case, if the 19 year old is a college student still being supported by his parents, he will pay at their rate on his capital gains. I think that is effective for 2007, but I am not sure. Might not be until 2008.

Kea, the form that JohnH is talking about has to be filed if they have $10,000 or more in a foreign financial institution or trust at any time during the year. It would most likely come up when you complete their schedule B for interest and ask if they have foreign bank accounts. If that large a percentage of your business involves non-citizens, you should definitely be aware of it. But I think many preparers assume the answer is no on schedule B without checking thoroughly.

I am just wondering if the timing is really tight, or if there is some reason the brother can't come to this country, set up a bank account and then have dear old Dad wire the money into his account. It seems to me that would be the simplest way to get the money into the appropriate hands. It also might be possible to make arrangements with whatever college he is attending to have the funds for tuition, books, meal plan etc. wired directly to the college to avoid any question of what the large sum of money will be used for.

VGA cards can become loose as a result of heat and cold, starting and ending power. Since this is an intermittent problem I would check the card to see it it is properly seated in the socket before purchasing any new hardware. All you have to do is giggle and push on the card.

Well, now I know what I am doing wrong whenever I try to fix my own computer. I don't giggle enough! :lol:

I have a taxpayer who has lived out of the country for the last three years as a temporary resident of United Kingdom. She has now moved to Australia and has applied for permanent resident status for that country. While she was a resident of UK, VA considered her a domiciliary resident of Virginia and she paid Virginia taxes because she had not changed her state residence before moving. At what point, if ever, will she cease to be a domiciliary resident of Virginia? Are there any steps she can take to expedite that, or will she always be a domiciliary resident of Virginia as long as she pays US tax and does not establish residence in any other state? Is there anyplace I can learn more about state requirements for foreign income? Any help is appreciated.

This is certainly an interesting situation, and I am not sure I understand it well. I really don't see how the bank can claim they have no responsibility for ATM transactions - it is my understanding all deposits are subject to verification. Also, was the check deposited in the name of the retiree? In which case, the fraud occurred either when the account was opened or when the money was withdrawn.

The IRS used to love cash flow audits - would that show that your client never received the money?

Finally, the IRA account itself was not stolen but rather the distribution from the account. If the distribution has to be reported on his tax return for $200,000 wouldn't that mean that what was stolen was cash with a basis of $200,000?

Just my thoughts - this is way outside of my experience. I would ideally like to see the thief caught, your client's money recovered and then pay the IRS in the year he actually received the money. What will actually happen is probably not that they all will live happily ever after.

The biggest problem is that a self-directed IRA can not invest in a business that the beneficiary runs, and most of these 'pitches' include setting up some slight-of-hand to hide the self-dealing. Besides, I would never advise a client to even consider such a deal, even if it were legal, tax wise. Because this is their 'safety net', their retirement income, and way too many new businesses go under in the first five years. That is NOT the money they should be gambling with. If the business is a sound one, they should be able to get normal financing for it. If they can't, they should be thinking again about why the bankers don't think it's a viable investment.

Amen, KC. I also get nervous about 401(k) investments that are too heavily in company stock. The person's normal job income is already riding on the health of the company they work for, and many of their benefits are tied to it - do they really want to put all their eggs in one basket by investing the retirement savings in it as well? It might work out, but not always. I think diversification should be emphasized more even for small investors.

:bday:

Sorry I haven't been to the board in a while to read, but I agree with Pacun that the cmos battery is toast. The fact that a reboot keeps the date and the power off doesn't indicates that as soon as power to the system is lost (which restart doesn't do) the battery is insufficient to hold the clock chip up.

The good news is that the battery will cost you about $1.20 at the local drug store, maybe 4-5 at Compusa.

I ALWAYS recommend an APC ups, www.apc.com go to their sizing utility and double the minutes you expect to keep working when the power goes out. Don't go for a lower rating, you wil regret it. I also like getting the X models with the double batteries as in my area the power is always going out and there is no guarantee that the battery will get to totally recharge before the next outage.

For systems that I don't put in an APC ups, which is rare, then I use the APC surgearrest power strips. These systems usually aren't ones users are using and the connected equipment is going to go down too and has no transactions going on (such as just a controlling computer to our box sortation equipment). My UPS to power strip ratio is like 99 to 1.

Of course UPS's require a battery every 2 years here, but can last up to 5 if you have very infrequent power disruptions. I don't wait, I just plan on 2 year replacement.

I am curious. We use APC's in our office also, and I usually replace the UPS every three years or so. Do you replace the entire UPS, or just the batteries? If the battery, where do you get replacement batteries and does it save any money to replace only the battery?

I agree that they be allowed to participate and feel free to identify or not to identify themselves, whatever they are most comfortable with.

taxbilly

I seem to agree with the majority - an unusual situation for me! I don't see why ATX employees should have to identify their employer or provide any information that would identify them. If they chose to identify themselves in some way it might add more weight to what they say about the software, but as someone else said it quickly becomes apparent if someone is posting on this board without the knowledge to do so. While some of us may be upset about some of the business decisions made by ATX since CCH bought them out, I don't think anyone is upset with the people we work with day-to-day at ATX. They are just doing a job, and probably have more reasons to be concerned about the buyout than we do.

I was looking over the 2007 1040 and found this new form that relates to the tuition & fees deduction.

http://www.irs.gov/pub/irs-dft/f8917--dft.pdf

taxbilly

Interesting - I guess this is a way to check on what is being put on the line by adding a form for it. Have to make sure we are not claiming someone ineligible for tuition expenses.

You would think that they would enclose an explanation so that the taxpayer does not have to spin his/her wheels trying to find out what the check was for.

taxbilly

My guess is that two weeks later they will get a letter telling them to expect this check and explaining why they are getting it. That's the guvmint for you. B)

I like all of your answers. However, only Wayne actually said that he accepted both halves of the whole. If you decide to send one "down the road"; how do you decide which one and what reasons do you give? I have handled these types of situations in the past without problems. But, I have one looming on the horizon that could be difficult, even though they are both worthy clients and both feel entitled to my advice and assistance.

We have only had one situation where the taxpayers did not resolve for us which spouse would stay with our office, and in that case since we have two full-time preparers I took one spouse while the other preparer took the other spouse and we were careful not to discuss the returns with each other. In a case where that is not an option, I would be inclined to explain to both of them that I could not represent them separately without a conflict of interest and therefore recommend that they each get separate advice from someone else. It is easier to show both of them the door and remain impartial than to chose one, IMO.

Does anyone have experience with theses? Audit notice is from AL Dept. of Industrial Relations, Umemployment Compensation Division. Want to perofrm audit at place of business. I'm guessing it may have something to do with the $180,000 of labor COGS for a psychiatry office, although they ask for all records including AR, corp minutes, bank statements, and financial statements, as well as all the employment filings and records.

When we see these in Virginia, what they are looking for is to see if you are treating employees as though they are contract labor to avoid the employment taxes. Can't say for sure about AL, but since it is the Unemployment Compensation Division, I suspect it might be the same.

I do not know why it did not print all the pages. But try this. Go to the top of page 2, change the number in the box at the top, and then hit the print page icon. Then change the number in the box to the next page, and print that one, etc, until you have all the needed pages printed.

If that does not work, post again and I'll try to come up with another solution.

That worked, albeit not elegantly. Thanks, KC! :)

I had, for the first time, someone this tax season with more than $10,000 in a foreign bank account (Canadian citizen, US resident). I have entered the information for the TD F 90-22.1 into ATX and printed the forms. However, I entered information for 12 accounts, and ATX only printed the first 7. How do I get the other 5 to show up? If anyone is experienced with these forms and wants to warn me of any pitfalls, please let me know that as well. Thanks.

Oh! How Cool! Thanks guys and gals....I love you all. Am not at home so cell was ringing steady. Hubby joins me later today. Getting ready for family gathering here on Sat (his). Mon is our Anniversary....lots of years. Thanks again!

Well, Happy Birthday and Congratulations!

Gene,

I think more that 2 monitor is extravagant on our field. Just a thought.

I'm still using one monitor, so maybe I shouldn't express an opinion, but from reading these posts it seems to me you could easily make a case for the first monitor for current tax return; the second monitor for last year's return; the third monitor for the bookkeeping software for information for the return; and a fourth monitor for e-mail, research, responding to phone calls, etc. In other words, anything you might open another window for. If two are reasonable, I find it hard to see why three or four would not be if your business generates sufficient income to pay for it.

Looks like you have lots of choices, ERC. Include me in!

I agree with Maribeth.

The subrental is part of the self-employment activity and in effect reduces the monthly rent the translator pays the landlord.

I had an audit many years ago of a Schedule C client who owned a building (a residence that was converted to a physician's office). Top floor was residential rental.

I took all the building expenses on the Schedule C - but separately reported the top floor rental on Schedule E. I found out that one of the reasons for the audit was showing rental income by itself on the E, with no corresponding expenses. Was told by the auditor - should have included on the C.

I hate to argue with experience, but I agree with Jainen and Taxbilly. I also think the IT guy needs to do a 1099MISC to the translator showing the amount of rent he paid, and therefore the income needs to be shown separately on the sched C to keep intact easy evidence that the rental was reported. We had a fabric shop that sublet part of their space to an alterations business for years, reported it this way, and never had a problem.

I have done several 990's and 990EZ's over the past few years, and I generally feel pretty comfortable with them. However, I have a returning client this year who has thrown a new wrinkle in on me. This is a 501©5 organization (labor union) and beginning this year they have been deducting "contributions" from members, forwarding them to the national organization, who receives the money and sends it back for the newly formed PAC to lobby on state and local issues. I have never dealt with an organization that had any involvement in politics, and I don't really know what to do with this. Is the PAC a separate entity? My gut reaction is maybe, maybe not, depending on bylaws, etc. Does the existing organization just need to file additional forms, such as 8871 and 8872, or is there some sort of separate filing for this? Any help or advice on where to get more information , would be appreciated.

Client has 4 brothers.

Mom passes away in January. Mom has $150,000 in joint bank accounts that lists her name along with the names of client and one other son. Also has an irrevocable trust with the only asset being a house that was sold this year.

Client wants to distribute the cash from the bank accounts. Brother wants to limit the distribution to the limit before gift tax kicks in. Brother is concerned about gift tax because he says that once mom died, the funds are in his name and the client's.

Mom had a will but bank accounts are not mentioned. The will simply states that assets be distributed equally.

Is the gift limit a concern in this case?

I don't think the gift limit is a problem since the unified credit is well over $150K, but it might depend on the value of the house being sold. Also, a gift tax return might have been required when the money was put in joint name but more likely would be required if the cash is distributed to the brothers on the bank account because they would then have sole control of the money.