RitaB

Yeah, I would like to have confidence in the market. I have total confidence that if capitalism is ALLOWED to work, things would correct themselves. But, the folks in Washington are way too involved. In my short, illustrious life I have not seen anything like what is happening now.

Mike, I am at work now (yay), and I think your guy CAN get the RRC. I answered a question on the worksheet that I was supposed to skip. Looks like I have an amended return to do. My client will be happy! UNLESS, the worksheet is wrong... But it sounds like an ATX problem, similar to the message saying the clergy worksheets had not been approved for "filing" when they meant "if you're E-FILING, you need to mail the clergy worksheets with Form 8453." Thanks for asking the question.

I realize this morning that my input up there makes no sense if your client is converting 100% of the account. I was just thinking about him converting part of the account. You know, if he can pay tax on a $10,000 conversion, that's gonna be a lot more shares than probably ever before. Here's a question: What do you all think? Part of me is going, "OK invest now. Stocks are on sale!" Another part of me is going, "What if the whole market just goes down the crapper?" I have 20 years till retirement. All I know is the market has always rebounded. Up to now...

Thanks for the reply. I was soooo dreading telling him he owed tax. I was pleasantly surprised when I spoke to the wife, (he was in VA working, after all). Anyway, wife was so sweet. Said she knew that was gonna happen, and she would tell him to go back to the payroll clerk, beg for forgiveness, and ask her to withhold VA income tax.

I don't believe you can do the MFS unless both spouses have valid SSN's. Sorry, I am not at work, but look carefully at the RRC worksheet again.

Sara - I would just add here that, since the market is down (assuming he's invested in the stock market), I would guess that your client would be able to convert a lot more shares than he could have at this time last year. To me, that is a real attractive argument for converting. Of course, no one knows what will happen in the future... ---Rita

Also, you can divide your deductible expenses between 8815 and 8863 (or the front of 1040) in order to acheive the best outcome. Just don't double dip.

Bonnie - I have had two that brought letters saying some particular income was not taxable, but neither brought any documentation regarding the income! So, I don't really know what they received that was not taxable, but their other income was taxable. -- Rita

I thought so. He's gonna flip out. Made a big point of telling me how he "straightened out" his employer's payroll department. They were correctly taking out VA tax for two months, then he raked some poor clerk over the coals and has a second W-2 for the rest of the year with no VA withholdings. Owes em $2500. I just wanted some reassurance. I e-mailed VA Dept of Revenue so I would have more than the directions to show him. They haven't responded. Boy, do I dread calling him. Thanks!

Just bumping this up cause it's about to disappear.

Yeah, I think she still works because it gives her a chance to see people. I was thinking about her this morning in church. I think I'll invite her to come.

Client is resident of TN. Performed work in Virginia for employer in KY. Is the income Virginia source income? I think so. Client is not happy. I hope I'm wrong. I am looking at page 4 of the directions for the non-resident return. The work was performed in VA, so that's VA source income, right?

Thanks for your help! I surely do appreciate it...

Good one! I actually saw a Liberty Tax torch lady yesterday afternoon in a nearby town. I was headed to my daughter's basketball game. Hubby says, "Maybe you should get one of those." No.

Thanks for the reply. I guess the question becomes whether or not the dam has a determinable useful life: Pub 225, p. 37: "Dams, ponds, and terraces. In general, you cannot depreciate earthen dams, ponds, and terraces unless the structures have a determinable useful life." Of course, when I tell my client that, he is going to say, "Oh, yeah, that dam ain't gonna last forever." When I ask him how long it will last, he'll look at my ceiling tiles, then ask me, "How long does it need to last?" So, RoyDaleOne, do you know what the useful life is? I sure don't. And I really don't want to leave it up to this "farmer." He's one of those people that wants to do what he can get away with, not what's correct. When my farmer dad died, we spent 12,000 rebuilding a pond that was probably 35 years old. Some of the ponds are 35 years old, and the dams are just fine. Also, if we can determine a useful life, it appears from Pub 225 that he did not have to have plan certification from Dept of Agriculture. Correct? I appreciate your input. I will start looking for "class life of an earthen dam."

Thanks for the update, Wayne. Think they're reading on the forum?

Huh? A dozer dug out a hole and built a dam with the dirt. It's not a natural wet land or anything like that. 6400 smackers. My opinion, it's more a fishin' hole than a farm expenditure, if you catch my drift. One of those farmers who loses money every year. "Oh yeah, I'm tryin to make a profit..."

Agree, it's a pain. I also make the taxpayer give me the amount. I do, however, enter "Various" for the purchase date. Most of the time that's correct anyway, with a bag of clothes, for example. I am so tired of them telling me "whatever is allowed," when I ask for an amount. I say, "What's 'allowed' is the FMV of your stuff." Then, they ask ME what I think their dadgum refrigerator was worth. Arghhh!

Her foreign tax credit is $912. Maybe she had all her broker statements cause she does them like she does me. Drop in every three days to check. Stays and chats for 30 minutes. Asks me every time: "Why do I have to pay intangibles tax to Tennessee?!" Me: "Your dividends and capital gains distributions exceed $1250, and it's income tax..." I have a hard time telling a 79 year old widow to stay the heck out of my office... but I seriously want to...

Yes, I know, and I'm glad. I was just saying that I'm glad I just had ONE otherwise complete return laying around for three weeks. Yes, clients need to chill out and not "run my practice." But, I downloaded that form from IRS for my sake as much as the client's. I was just saying that IF it were a more common form, I'll betcha even the laid back preparers would want it to be ready for their OWN benefit. Nevermind if the client is a goober. It's easier for ME to finish what I start. BTW, I don't think Form 1116 required extensive reprogramming.

Thank you so much. I see it now in first column of p. 28. Client cannot depreciate his pond. Unless he goes to Lefty across the tracks.

I was about to tell the client, no, a pond just increases your basis. But reading Publication 225, I think it's possible, but limited to 25% of gross farm income each year. Is that correct? I gotta tell ya, I'm about fried. What would you use for the class life? Please forgive me if it's supposed to be obvious and I completely missed it.

Bonnie, you can use some qualified expenses on Form 8815, and the remainder on Form 8863. If you open the directions to Form 8815, it indicates that you should not use expenses on line 2 of Form 8815 that you also used on Form 8863. So, you can separate the qualified expenses to get the best outcome. Just don't use the same expenses on both forms.

Yeah, you're right. On the other hand, I kept looking at her pile of stuff (she likes the jumbo 15 x 20 envelopes), and decided I wanted it out of the office more than I wanted to flex. Plus, she is about a hundred (OK, 79) and is a real complainer. Still works at Wally World, and there's really no substitute for bad publicity, if you know what I mean. I could just hear her telling everybody there what a slacker I was, even though I explained to her that the form was not approved yet. And who knows when ATX will have the Form 1116 ready? Also, when I assembled her return today, I realized that I had forgotten a lot of details about the return that I wanted to point out to her. I did the return about three weeks ago. Took a while to refresh my memory about all of those things. I really hate putting a return aside once I've started on it. I wish I had used the irs.gov form sooner, to be honest. And, what if I were waiting on a form that I use a lot, say Sch C or Form 8863? Can you imagine the stress of not being able to finish half of your returns? The mountains of files laying around, the phone calls... OK, that's not a pretty image. Thank goodness it was just that one. Whew.

Mike, I have been waiting on the 1116, too. KC suggested (on a previous thread) filling in the form on irs.gov with the numbers from our "draft" form and just printing that and attaching to return. I did that today for a client who keeps calling me, "What's taking so long?" Of course, client is paper filing. It's a pain, and the ink is blue (what's that about?!), but the client was REALLY bugging me. We should not have to be doing this, but I think it's the lesser of two evils. At least I got the client out of my hair. Hope this helps.