Karen Lee

Married couple purchased 100% stock of c-corp. Note is held by previous owner. This IS Investment Interest Expense? They have rentals but maintain the rentals themselves. They are employees of the acquired c-corp. I cannot figure out how to deduct the interest from the note. There is a separate note for land and building that was bought that the C-Corp is housed. It is only the stock note that I can't figure out where to deduct. Rentals are not Passive the C-Corp is not Passive. Sch A in ATX will not allow the deduction there isn't enough Passive income for that much Investment Interest expense. Ideas?? Thanks Karen

IRS RTRP ATX Thanks OldJack you have been very helpful over the years along with many others. Enough is enough.....I worked for the Army in the 70's and thought I was done with all those initials. I hope to get back to financial accounting.

Sole Proprietor Adult Family Home On scheule C has returns and allowances; the R&A is the difference between private pay and medicaid received. OK, I just need to prove that the income received included the private pay figures. Cash basis Also, 1099-MISC received for unrelated earnings and is on Line 7, 1040 and Form 8919 added to return for the 1099-MISC. Should cause some serious problems for the organization he worked for. Real estate taxes and mortgage interest for personal residence and car payments for their children are on the Sch C. W-2's for owners on "other" adult family homes organized as C Corp....Box 1 wages only and FWH only. No SS or medicare wages or withholdings. It would be interesting to see their personal SS statements. Since I have made the decision that this is my last tax season, I may just pass on this one and let the previous preparer continune to do this. Karen

CP2000 was issued and additional tax owed because client didn't report distribution and cost basis from investment. This is what the CP2000 states: "We used the cost basis shown in box 3, on Form 1099B, Proceeds From Broker and Barter Exchange Transactions, provided by the broker. If the broker did not provide an amount in box 3, we used a zero costs basis...". 1099B does have the cost basis and shows a loss...(not to mention loss CO from previous year) Client is a student across the country and decided to do her own taxes and be a big girl. Client did not claim the distribution and IRS did not pick up the cost basis. Is IRS doing their own phishing or just making blatant errors? Karen

just checking for warning points

update: the $ were in annuities, death benefits (my client would be the beneficiary) cash out and wired to US I assume taxable at this point scenario may change with next stop by the office "Oh I have a question for you,,,," Karen

Client inherited 3-4 Swiss accounts in 2012. There was no paperwork regarding these accounts (burned up by demented aunt) so my client went to Switzerland with all the documentation requested plus some. He was able to get the $ transferred to his account. What do I do now? FBAR? Income? The amount is approx $56,000. Karen

The way I understood it.... Prorate CE for new PTIN applicants, not a prorate for new RTRP. Renew PTIN - 15 hrs Apply for PTIN - prorate I renewed yesterday. Karen

Thank you all!! I'm off to the medicine cabinet.

Someone told my client that his early distribution is not subject to penalty because he started a new business with the distribution. I cannot seem to find anything to substantiate that claim. I say that it is subject to penalty. If one of you says "you're right, Karen" I'll take some additional medication so I don't have a heart attack and believe what I read in the MTG. Let me know Thanks Karen

Successful and well-established, 17 year bookkeeping and tax preparation practice located in the downtown area of a rural, Western Washington community is available for sale. There is an abundance of recreational amenities for the outdoor enthusiast, such as fishing, hiking, hunting and a myriad of snow sports to name a few. Owner is ready for 2013 season and RTRP also willing to work 2013 season for smooth transition. 1040, 1065, 1120, 1120S, 1041, payroll and some write-up. PM if you are interested. Karen Lee Please feel free to delete this post if you feel it is in violation of something.

That did it. Thanks, Old Jack. Karen

Actually the Sch C and Sch E are flowing to the 1041 and nothing is flowing to the K-1. All bunny hops are all over the place. On the distributable income worksheet only #'s from Sch E show up and when I go to Ordinary Income for the Sch C amounts it bunny hops to nowhere. This is a testamenary trust. Sch C is a loss and Sch E is not a loss but overall there is income. The software is calculating tax for the trust???!!!!!! I am truly hoping to have all of my returns done by Oct 15 but things like this drive me crazy and I spend a ton of time getting nothing done. I don't have a ton of experience on 1041's. Thinking I am not checking a box that needs to be checked. Help please. Karen

Tested 7/30/12, received certificate today.

I am hoping next tax season is my last. I am gunning for a real job, first one in over 20 years. I am to take the RTRP exam 7/30/12 and I don't care if I pass or not. Just received my annual letter from HRB to buy my business and may take them up on it next year. HRB office is next door to me but never impacted my business. Lost some only to get them back. Just done.

update and reboot

I am a member and have never regretted it. I go to the annual conference to get my CPE's and can get 30 credits for 4 days. The publications and newletters are good. Very professional organization. The conference classes are classified basic, intermediate or advanced. Also the conference includes an ethics class or two. It is spendy to go cross country and stay at the conference site but I can concentrate on the classes and get it all done. Karen

Schedule E Rent Income???

First one: Client has AML (Luekemia)has done some rounds of chemo and was on the bone marrow transplant list and moved up for transplant. Acquired a lung infection and was removed from transplant list. Now is better and back on for transplant. He is required to be within a short distance of the hospital after release from the hospital for transplant. He cannot be alone after transplant so his wife is with him for this three month stay in a very expensive apartment. So now he is on the hook for 2 stays in this very expensive apt (6 months). Does it all qualify as deductible med expense? Second one: Client had on the job injury. Received a $5 million settlement. She was hurt very badly. She wants to snowbird to Arizona, buy a house and use it as medical expense. She can get a statement from doctor as to being medically necessary to live in a warmer climate. (For some reason the bigger the settlement the less compassion I have) Need some guidance here. Thanks Karen

You are correct. Divorce not final until early 2011. Just living apart 12/31/10 Karen

Couple purchases another home 4/22/10. Keeps old main home (has had for 15 years). Couple separate and divorce 2010. MFJ; AGI 2010 $107,921.00 Wife keeps new house and husband keeps old house. There are 4 children, 1 adopted special needs child. I cannot find anything that disallows the credit. What do you think? Thanks Karen

Qualified distributions are tax exempt regardless of whether the designated beneficiary attends an eligible educational institution on a full-time, half-time, or less than half-time basis. However, room and board expenses constitute qualified higher education expenses only if the student is enrolled at an eligible institution on at least a half-time basis. Interest income taxable MAYBE if distribution exceeds expenses during the tax year. Possible penalty also. From MTG Karen

Client's dependent son wants to withdraw funds from education IRA for off campus housing. Is this a taxable event? Karen

Executor of Will cashed out mutuals to fund testamentary trusts. Since the transaction happened after death then the transaction is an estate transaction and should be on the estate return. Yes? Karen I am having trouble explaining this...sole and separate property of deceased and spouse having trouble with the concept.....

Client comes in to have his taxes prepared...His wife left with their child on Dec 28, 2010. He supported them all year. She has filed her taxes taking child as dependent and filing HOH. Advised client that they either file MFJ or MFS and recommended MFJ. He said she won't sign since she already filed. Long discussion about how it was inappropriate for her to file the way she filed. I asked him to give his attorney permission to talk to me and I, of course, got a consent to disclose signed. The attorney called me and I told her that the wife cannot file as she did because it wasn't the case. Client called today and the court said that she could claim the child for 2010. I told the client that the IRS could not care less what the court said and that "they" need to file MFS or MFJ. So here I am, cannot file MFJ because we do not have income info on wife and cannot get her signature. Cannot file MFS (community property state)for basically the same reason. Now what do I do? I need to know where to go from here. Thanks Karen