Patrick Michael

Client was working part time while going to school, had no insurance from January to October. He was married in October and went on his new wife's health insurance as of 11/1 (wife had insurance for the whole year). Client would have been eligible for exemption based on affordability based on his income only, but when combined with his new wife's income he losses the exemption. Is there any exceptions to deal with this situation or are they stuck with paying the shared responsibility payment. Thanks.

This problem was why I finally jumped to Drake. At times it would take 10-15 minutes to get the program to open and numerous calls to support did no good. And I am not running it on a network.

Thanks Judy.

New to Drake this year and I was wondering if there is report that would show the clients who filed a Schedule C in 2014? Thanks.

They may want to check with the local Health Department also. Had a client who did the same thing and was shut down by the Health Department for several weeks until their basement kitchen passed inspection.

Client helped out a friend who owns a one man manufacturing business. Client put part A into part B, worked out his own home, set his own hours and was paid by the piece so I believe he should be classified as a subcontractor and not an employee of the friend. He was paid about $2,000 and the friend will be issuing a 1099. I'm thinking of putting the income on line 21 since he is not in the trade or business of assembling parts (has a regular full time job) and the activity is not regular and continuous. After some research I could not find anything definitive whether or not it should it be subject to SE Tax. What do you think? Thanks in advance for all replies.

Thanks for the replies. I was able to find the Prentice Hall 2013 edition for $.75 plus $3.99 shipping on Amazon. What a deal!!!

Good morning all, So far my practice has been limited to personal returns, schedule C's, and E's. I would like to expand and start preparing S Corp returns. Does anyone have any suggestions for a good book that explains the 1120-S or any suggestions on the best way to learn to prepare these returns? A Google search did not turn up much. Thanks

Are the capital gains treated as long term or short term?

I am about to lose my 1040NR virginity and want to make sure I'm correctly understanding what I have researched. Canadian citizen and resident sold a partial share of a vacation home located in the United States. It was not a time share, they actually owned a condo with two other couples. The condo was never rented out. They will have a long term gain of about $12K from the sale. From my research it looks like, since this was the sale of U.S. real property, it is taxed as a long term capital gain "connected with the conduct of a U.S. trade or business." As such they do not need to fill out Schedule NEC and there is no additional tax on the gain that flows from that schedule. They do not have any other U.S. sourced income so the gain will not be taxed as they are in the zero tax bracket for LT capital gains. They have not yet applied for an ITIN so they have to file a form W-7 along with the 1040NR. I have the 8288-A showing the amount withheld that they will be sending in with the return. It seems pretty straight forward. Is there anything I am overlooking? Thanks.

That took care of it! Thanks.

I'm trying to prepare a CA 540NR but when I go to view the return the only one in the list is the 540. I went to the "NR" screen and entered the date he moved into CA and the state he moved from but it did not help. All the W-2's are entered and have the correct states listed. Any ideas on what I am missing? I called tech support and they said they are going to have to get back to because they are having computer issues.

I e filed a 2012 and 213 return last week and had the Acks back the next day.

Here's the link. It is in the Tax Business Owners group in LinkedIn. https://www.linkedin.com/grp/post/1868452-6017063664580845569 Thanks for the responses.

There was a thread in another tax blog discussing tax software and several posts said there were problems with Drake's depreciation calculations. They did not elaborate on what the problems were. They did say Drake was aware of the issue and chose not to address it and they had to manually override the entry. I was looking into switching from ATX to Drake for 2015 and was wondering if anyone has experienced problems with depreciation and if so, what is the issue? Thanks.

Thanks Judy. I will have to get back with the client and see how he has been accounting for them. He is insisting that the $50 K should be a loss since the franchisor shut the business down and he has to pay the state. Either way I do not believe this gives raise to a capital loss.

You are correct jmdaviscpa. I clarified with the client that the $50K was for tickets sold. So I still think that the $50K does not give rise to loss as he would have already deducted the cost of the tickets on the P and L.

I would like to bounce this off the tax pros on the board. Client owned a franchised convenience store which he bought from an individual 20 years ago. The purchase price was for inventory and goodwill which has been written off. The franchisor owned all the real estate, fixtures and other assets (other than inventory). The franchisor cancelled the contract in October of 2013, came in, threw my client out of the store and locked the doors. They seized the inventory and store bank accounts (apparently authorized in the franchise agreement). The inventory value and bank accounts were netted against liabilities (which franchisor assumed) and "fines" called for in the agreement. At the end of the day my client is personally liable for about $50,000 owed to the state lottery commission. My client said the $50,000 was for scratch offs inventory. I don't believe there is any gain/loss here since the dollar value of the tickets were included in the inventory amount used to offset the other liabilities that were assumed by the franchisor. Am I on the right track her? Please let me know if more information is needed. Thanks.

I filed this form reporting a preparer who was taking my law enforcement clients by promising bigger refunds. He was deducting haircuts, meals, and non-existent deductions (ammo never purchased, non-existent magazine subscriptions, etc.) and they always exceeded the 2% floor. He told them not to worry because it was legit and he had a ruling from tax court that police officers were entitled to a "standard deduction" for employee expenses and no receipts were necessary for expenses under $250. One officer was smart enough to ask for a copy of the decision and the preparer refused to give it to him saying he had to pay a lot of legal expenses to litigate the matter and he was not going to give it away for free. Three years later he is still in business and doing the same thing.

Not much to the Sch C's and they were very organized.

Had ten dropped this morning and most wanted to know why they had to go on extension (or pay double the fee to expedite). A new client came to pick up and was upset that my bill was $300 (1040, Sch A, 2 Sch C's, Sch E), when the last preparer only charged $125. I asked why they didn't go back to their old preparer and they said because they got a letter from the IRS and had to pay back taxes, interest and penalties because she "messed' up. And they could not understand why they owed this year when they always got money back before. Well, maybe it was because she "messed" up in the other years and understated your income and the $300 bill is for doing your taxes right! The15th can't come early enough this year. Rant over... feel a little better.

While in the return go to Forms/Planning and Analysis/Married vs. Separate. You have to make sure you have inputs coded correctly as to J/F/S. There are also some manual adjustments you have to make.

Thanks.

Client has a child that required a bone marrow transplant several years ago. They have to travel to the Mayo Clinic every year for check ups. In 2014 a charity reimbursed my client for travel expenses and issued a 1099-MISC (not sure why the organization did that) with the amount of the reimbursement in box 7 (Nonemployee Compensation). So, I'm not sure the best way of report this to avoid a CP2000 notice. I was thinking of placing the amount of reimbursement on a Schedule C-EZ as income and then reporting an equal amount of expense to zero it out. She does have receipts to show that the actual travel expenses exceeded the reimbursement. Am I on the right track or is there a better way to handle this? As always, thanks for the input. Pat

I have hired someone to help out during crunch time. They will be working from home and we will be using Portal Safe to transfer files back and forth. What would be the best way to transfer the ATX files, export, backup or is there another way? He will be doing the data entry and I will be reviewing, printing and the e-file. Thanks. Pat