Burke

Dividends on life insurance policies are considered a return of premium and are not generally taxable until such time as they exceed the premiums (less cost of insurance and other calculations). He could have used them to pay the premium, as others have said, but he also could have gotten a check every year if he elected a cash option. Apparently they were paid or used over the years, as there were no dividends left to include in the distribution. I say distribution, because if it was received as a death benefit, it would not be taxable. This type of calculation (now required by the IRS) happens when a policy matures or is surrendered by the insured. It is considered a gain and taxable. The 1099R is reportable on the (now deceased's) final tax return since I am assuming it was paid out while he was still living.

ARGGHHH! Thank you, thank you, thank you. That was it! I feel like an idiot, had no idea that was up there. IMO, however, it SHOULD default to the input screen which you are completing. After all, the Simplified Method tab IS at the bottom of that screen!

I kinda work year round, but only because I have a few late, late extenders (including me.) I dumped all corps, partnerships, payroll, etc 3 or 4 years ago and boy does it make life easier. No more deadlines except for April & Oct 15. Then after April, I can pretty darn well do them when I darn well feel like it. The rest of the time I have a life.

I have done this. It requires overrides, I think on the Record tab. Just delete the amounts on that screen, and the vouchers should print blank.

Most of mine are now trained to give an itemized list of goods to substantiate the non-cash deductions. Last year, I can't tell you how many clients I handed a copy of Page 4-2 of TTB and had them go home and work up a list. Only had one this year.

I disagree. It was disposed of as far as the Estate was concerned. It should reflect in the DNI on the final 1041 if it was transferred to a beneficiary. And disposition with no gain or loss as Joan suggested should work as far as ending the depreciation at the proper point.

Perhaps the term "blind trust" is a misnomer. A blind trust is a trust set up in which the grantor has no control whatsoever. Politicians do this when they are elected to office so that they are not held accountable for the assets owned, the transactions, the buys & sells which occur, in order to avoid a conflict of interest. A disinterested trustee controls it completely. It appears from the above that this was set up to receive monies from a lottery or gambling winnings just to protect the identity of the recipient and that it is now terminated.

All of a sudden my Simplified General Method worksheet (see tab at bottom of 1099R input) will not open. It says "Simplified Method not being used." Well, it dang sure is, and I used it last year on the same return, and everything rolled over to this year. I have been using it on various tax returns this year with no problems, but I think this is the first time I have used it on an RRRB 1099R this year. And it did it on another return today, also RRRB 1099R. It is showing on the Detail screen, but I cannot print it, either using "Page" or in the Print Function. So I had to use last year's worksheet and input the correct taxable amount. The Detail sheet is showing the carryover amount remaining but if I can't print it, I cannot include it in the return! Anyone else have this situation?

In this case, you may have problems. Easy enough to report the income on wife's return. No argument from IRS. The problem is, the withholding was reported under the deceased's SSN and she cannot get to it. And you cannot file a return for the deceased for the year after death and ask for a refund. I had the exact same problem a few years back and after some effort located the Tax Unit of the custodian who was responsible for issuing the 1099R. Read him the riot act, and told him he had two choices: either issue a corrected 1099R with payee's SSN on it, sending corrected copies to IRS, or issue a refund of the taxes withheld and adjust their next withholding report accordingly. (This was from instructions from IRS, BTW.) He chose Option #1 and we were able to file on spouse's return and get credit for the withholding. I would think you will have the same problem with the state. Even getting an EIN and filing through the estate, it is still the same situation. Withholdings are not under the estate's EIN either, so no credit.

I believe you need to amend the return for the year in which the remaining points should have been written off, not add them to this year. And possibly the years since.

I would bet most of us would be qualified to conduct such a class, and perhaps an offer to volunteer one day (not during tax season) would be welcomed by some educational systems.

I have used this feature. But I believe it shows what the depreciation should have been, and not what may have actually occurred, since the past "history" predates the software in some cases. It's still useful, but as Randall said -- one asset at a time.

Yes, I did select Schedule A. There's been an update since then. Will try again.

Is anyone else having this problem?

A couple of weeks ago I had occasion to try to access my 2004 ATX program and although the icon is still on my desktop, and it is listed when I click on Programs, it tells me the program cannot be located when I try to access. I did not delete it or uninstall it. The same thing has happened to 2005. 2006, 2007 and 2008 are all okay. Anyone know why this may have happened? Do they self-destruct after a few years?

I see where you are coming from. The total FICA/MC amts were shown on the W-2, (employee's half) even though they were not withheld from the distributions which were included in wages. The TP received those 2007 distributions in full without reduction for SS/MC. And the TP received them over the course of the year, not at the end. So, effectively, the SCorp paid both halves of FICA on the 2007 distributions in Jan 2008, and I have read somewhere when a company pays FICA taxes for an employee, they are considered addtional wages to that employee. Am I wrong?

In the real world, very few 1031's are simultaneous exchanges between two parties. Most are deferred, and I would not recommend attempting one without the QI safeguard.

I do not believe there are any "books" unless you count the checkbook for the SCorp account. Maybe I can make it a little clearer. Salary paid was $95,000 subj to FICA/MC and 941 reporting. When completing the 941 for the last quarter of 2007 (in Jan 2008) CPA took all other distributions and withdrawals to sole member taxpayer which totaled another $150,000+ and added them to salary on the W-2, and on the 941 for last quarter. Corp paid the 941 taxes. The reason this was done as far as I can surmise, is to qualify for larger deduction to SEPP plan which is based on salary. SEPP plan contribution is shown on balance sheet (page 4 of 1120S) as liability not yet paid, as well as last quarter FICA. Maximum salary subj to FICA was not affected, since TP was already over limit, but it did increase M/C tax by several $K. Half of this should have been the employee's responsibility, so if the Corp paid it all, isn't that 1/2 of MC taxes paid additional salary to TP? It was paid in Jan 2008, so I am thinking it needs to go in the W-2 for 2008.

If all the properties "were bought and sold in the taxpayer's name" then I would question closely as to whether it was a qualifying 1031 exchange. The settlement statements should show the Qualified Intermediary's name on them as the TP absolutely cannot take possession of the proceeds. They go the QI and the QI purchases the new properties. There are lots of timing rules on these and other regulations. He should have all the paperwork necessary to determine this. If he just sold old properties and bought new ones himself, it is not a 1031 exchange. And a 1031 is not for dabblers. If he was buying properties and fixing them up for resale, that is ordinary income on Sche C.

That may take quite a while since they said they were going to appeal. And the deadline for amending might run out. However, I just read an article about a tax case (and I cannot find it now but will keep looking) about no deadline for filing an amended return on a TIMELY filed tax return, where "no new information was given to the IRS" to consider the amendment. In the case cited, IRS disallowed all dependent exemptions and certain deductions. (TP may have paid the adjusted tax, I cannot remember.) Anyway, an amended return was filed claiming certain of those dependent exemptions, and IRS disallowed that due to 3-year filing deadline had passed for 1040X. An opinion was requested, and Chief Counsel Advice ruled 1040X could be honored since it did not provide any new information for IRS that it did not already have to consider the amendment. Have you ever heard of this, and could it apply here back more years than the last 3? These demutualizations happened to many companies in the 1990's. Many people sold the stock as soon as they got it. Other tax professionals are saying file those protective claims immediately.

Yeah, and there are other print issues with 4562 on the detail statements. I have difficulty printing them from the print menu. I usually wind up having to print the "tax classification" one to get a copy for taxpayer & me.

I just checked one of my new returns this year which had 4 properties with addl assets and all the prior accum depr that I input is there. All of these went on Sche E if that makes any difference. And they were very old properties, except for one new one in 2007. Also, it might have something to do with an update I have not yet downloaded because I haven't done that in a while.

You are thinking right. It is after he actually turns 59 1/2.

Because those deductions effectively reduced their share of the estate inheritance proceeds is my guess. Regardless of Congress' reasoning, it is in the tax code. Review IRC 642(h). Excess deductions only happen in the final year when they exceed the estate's gross taxable income. So there would not be any income to go to the K-1. I just re-read your post and you said "no deductions on the 1041." Why aren't the eligible ones shown there? (Just as sale of stock or assets by the estate may have produced net capital losses which the estate may not have been able to take, those would go on the K-1 too, then flow to bene's Sche D's. ) The excess deduction share goes on Sche A, subject to 2% exclusion, so they may not get a benefit if they don't/can't itemize, but you don't know that unless you also do all of their tax returns as well. PS: Don't forget to do the 1099MISC for the executor's fees.

Actually, this statement is incorrect. Originally, the bill started out this way. It was supposed to be an income tax "rebate." But it got modified. Persons who have at least $3,000 in SS, VA benefits, or net self-employment income as shown on Form SE, or wages on a W-2, etc. but do not owe any income tax WILL qualify.