DANRVAN

But we have always done it that way with Turbo-Tax. Depreciation, what is that?

No, the instructions to Schedule E line 12 would be good place to start your research. No business purpose means no business (or rental) deduction under section 162. Suggest you research the definition of "acquisition debt".

I am familiar with the OAR, it has been around for several years. But it does not exclude out of state sourced income from Oregon taxable income, regardless if the other state taxes income or not; it is still subject to Oregon tax per ORS 316.048.

What is CA's rule for preparing CA resident tax returns by out of state preparers?

I agree that in your example your fee could be considered an out of state source of income. However, I do not see any authority which would exclude it from your Oregon taxable income under ORS 316.048. Since the starting point is federal AGI, I am not aware of any provision to subtract it out for determining Oregon taxable income. Also, I don't see any reason why income from non-income tax states would be treated differently from states with income tax for Oregon taxable income, since Oregon taxes all sources of income, but allows a credit for tax paid to another state.

I think I follow what you are saying now. For example you prepare a tax return for a Washington resident. You are saying your fee is not subject to Oregon Income tax? Your not talking about whether the client has Oregon sourced income but whether you do for your services?

I am still not following you on this Still subject to Oregon tax, but not subject to the Oregon Preparer rules as I see it.

There is no other reason!

Per the proposed rule notice: NEED FOR THE RULE(S) The proposed new and amended rules were made necessary, among other things, by changes in the technology that may be used by tax preparation businesses for the preparation of personal income taxes. Oregon Tax Preparation Businesses, who take in more work than their trained preparers can handle have, more than occasionally, been found to be reaching out not to other Oregon Licensed tax practitioners for assistance but to tax preparation businesses located outside of the State of Oregon – businesses whose employees have no training or expertise in the preparation of Oregon personal income taxes and as such pose a significant consumer protection risk to unwitting Oregon taxpayers who thought they were turning their tax information over to an Oregon Licensed Tax practitioners for the preparation of their Oregon Personal Income Taxes.

I am not following you on this. If they have Oregon source income what has changed? They can have their returns prepared out of state, but still subject to Oregon tax as I see it.

The proposed rule 800-002-0000 states "(1) An out-of-state unregistered tax preparation business whose employees or contractors are not exempt from licensure under ORS 673.610 may not contract to, and may not solicit or advertise to, prepare Oregon Personal Income Tax Returns for Oregon residents, or maintain a physical or electronic Oregon drop box location for delivery and pick up of materials pertaining to preparation of Oregon Personal Income Tax Returns for Oregon residents, unless the out-of-state tax preparation business registers with the Board and maintains an Oregon Licensed Resident Tax Consultant(s) on its payroll who is assigned to supervise the preparation of all Oregon personal income tax returns. ¶ So it in that situation is sounds to me that since the taxpayer is no longer an Oregon resident the rule would not apply; even if he/she had been a full time resident for the tax year, but moved out of state and were nonresidents at the time of filing.

You are in a different world. $50,000 for new will not buy much of a tractor for an average operation in my area, and will not hold it's original value for the amount of use it will receive. In any case, the original cost is a moot point in determining fmv at DOD, it needs to be done by an independent third party.

And how did you answer form 8867?

I assumed OP already made that determination; and return was filed, or to be filed without 8332 (So we don't have an 8332 and we go ahead and file electronically without one.) His question was: "Will the IRS hold up processing the return? Researching to see whether "Jack" has claimed Toddler?" Answer is, IRS does not track who custodial parent is from year to year. They are not going to hold up the return while they research "to see whether "Jack" has claimed Toddler". So even if the return is filed by non-custodial parent without 8332, the dependent will go to noncustodial parent if custodial parent has not claimed. I know many of us have had to file an appeal for custodial parent when ex beat them to the punch and claimed dependents without permission.

To clarify, if custodial parent signs 8332 and also claims the child, then IRS will disallow the claim by custodial parent and allow to noncustodial parent per the signed release. The noncustodial parent needs to be proactive and request the 8332 for not only the current year in part I, but also for future years in part II. The noncustodial parent also needs to be aware that custodial parent can revoke for future years by filing an additional 8332 and filling in part III. In that case, the custodial parent must attach a copy of the 8332 as proof of the revocation.

But the custodial parent is not required by IRS to provide 8332; that is strictly between the two parties or legal system.

Not in the world I live in. Original cost certainly does not reflect DOD fmv of farm equipment.

So aren't you taking the same position as Fleischer v. Commissioner? Assignment of income to the Corp. Why doesn't the firm become RIA and follow the code?

You are filing an incomplete and inaccurate tax return. Filing form 8332 (or similar statement) for noncustodial parent is a requirement, not an option.

Make sure you are familiar with Fleischer v. Commissioner, Tax Court Memo 2016-238 before you consider an S-Corp for an investment advisor. And in the case of Fleischer it came back to bite him as assignment of income to his S-Corp.

I think you only use 5405 in year of disposition. You could calculate interest and penalty and include with the unpaid balance due.

Now I think I get it. If the FTHB credit was taken in 2008 it must be paid back over the next 15 years. If taken in 2009 or 2010 no recap. The only choice I see is to report the unpaid balance on line 10 of Schedule 2. Decide whether on current year; or the earliest open year and 1040-X forward. Deal with that when and if it comes.

Are you saying they did not take the credit over 10 years ago, but want to do so now? Why would they receive any letters? Maybe I am not following you here. Way past if 10 years ago.

Agree, make it positive and not like you were on the brink of going over the edge. Also I do not agree with pricing a client out your practice as you need to be accountable for your billings.