BHoffman

It also might be considered an exempt social club via Sec. 501(c)7. This is sticky. Does it really rise to the level of a Sch C business? Are they in it for making profits? Is the group specifically paid for performing?

So when they get the penalty letter for $195 per month, per partner, who gets to deal with that? It takes time to prepare the penalty abatement letter. Who is going to prepare that? Who is going to pay for it? The other partners should be made aware that a big penalty is coming and they should have the opportunity to pay your fee so the return is filed on time. Let Mr. Cheapskate owe them instead of you, and sidestep the involvement of the IRS.

Distributing the property and liquidating the partnership would be a thought. The sale agreement would need to be modified so that the sellers are the TP and Spouse, and the title should be transferred - all before the sale is completed. That can be simple or complicated, depending on many things - hot assets, outside vs. inside basis, cash distributed along with the property, debt relief, etc. I like this article regarding partnership distributions, and it gives lots of examples concerning liquidating distributions: https://www.forbes.com/sites/anthonynitti/2015/01/20/tax-geek-tuesday-understanding-partnership-distributions-part-1/#621811aa2c11

You might like this article http://www.skodaminotti.com/blog/asset-deals-vs-stock-deals-for-pass-through-entities/

If they sold all assets, including the name, could this be a stock sale and not an asset sale?

I'm going to be dealing with the sale of a partnership soon. The only "hot asset" is accounts receivable. How do I determine the amount that is likely to be collectible? Historically, they have about 20% that has been uncollectible, but has not been recorded as an allowance for doubtful accounts on the books. They have been reporting taxes on the cash basis. What if, after the fact, the actual amount of collected AR is more or is less?

I like the scripts! Is 09/07 very late to find another accountant? You can't swing a cat in Phoenix without hitting one. I feel pretty good about getting off the hook here. I'm also ashamed to say that I feel sort of good that now she's the one on the hook. A little guilty, but overall pretty good.

Text from client: "This is really harsh & leaving us in huge limbo" The response I really want to send: "Better you than me"

Ugh. I just sent the kiss of death resignation email to the client. She texted me and I don't want to talk to her. I'm very busy working on a peer review, have another client that I do need to chase around and don't want to fire, and a bunch of other stuff. And, I'm tired and feel like crying. boo hoo

This has been a very stressful year. Tax season was awful. Fighting with Hubby to the point of tears and door slamming. I hate it when he cries. Then, our beloved dog Molly passed away at 14 years old from kidney failure. She was our last pet. I do not want any more pets. After she died, Hubby said let's go to La Jolla CA and just stay there until we feel better. It was a good idea. My stress level has gone down so much that I feel better than I have in years. There isn't any elderly pet to medicate and feed and pamper and worry about. Hubby and I can finally travel together, worry-free, and stay away as long as we like. I feel so much better that I'm looking for other ways to relieve stress and I'm looking at that every day. Dumping clients who are a continuing source of teeth grinding stress has been cathartic. I'd rather be poorer and happier than have that hard money that comes from dealing with them. Thanks for responding. I was feeling inadequate and weak for not being able to deal with these late returns.

This year I asked my chronically late filers to have their paperwork to me by Aug. 31st. Amazingly, most of them have complied. I have two clients who just seem never to be able to get it together until October and then it's a real struggle for me. I just fired one of them and am waiting for a return call from the other and I want them to go elsewhere too. Do you ever fire clients who habitually wait until the very last minute? There is no fee high enough to compensate for the grinding frustration. Or, maybe I'm just getting crankier in my old age....

How much NIIT does he pay, and would an S election allow him to avoid it?

I have a client who is thinking of moving back into their rental property. They have about $50,000 in carry forward PAL. They have about $58,000 in accumulated depreciation. I understand that if they live in the house for 2/5 years and then sell, some or all of the gain can be excluded via Sec 121 (they might have a home office). I believe the entire PAL is used in the year of sale, and the entire depreciation is recaptured. Correct? Thanks!

Thanks! I have been using Mozilla Thunderbird email since you suggested it and like it fine so far.

Ugh. The heavy smoker sent her paperwork in. I have looked through it and put in all in a ziploc. Phew! I noticed that she missed taking a 2016 RMD in the amount of $494 from an Ameriprise IRA account and advised her to take it now and keep a copy of the payment she receives. I'm wondering whether to go the whole form 5329 route or wait and see if IRS sends a notice? If I should send in the form 5329, can you advise on "reasonable cause"? She explained her "reasonable cause" as confusion since she received dividend checks from a separate Ameriprise stock account and thought they were the required min. distributions. I don't know if IRS is going to complicate things unless the "reasonable cause" is something very common and very typical, like her elderly husband's health issues. Are there any other very common and very typical "reasonable cause" explanations for missed RMDs that I could ask her about? Thanks for any advice.

I would terminate the s election. Here's a how-to: http://info.legalzoom.com/terminate-scorp-election-revert-llc-23367.html.

Terry - a few things I've learned over the years concerning clients and Quickbooks include keeping the chart of accounts short and sweet. Lots of clients come to me with pages and pages of accounts on the COA. That makes for lots and lots of opportunities for coding errors, IMHO. But, as long as the QB type is correct (expense, income, asset, liability, equity), the data errors are manageable. I might suggest that you perform your work on a monthly or quarterly basis since this also has worked better. The bookkeeper will probably be able to ask and answer questions as the issues are more recent than looking back annually. Also, I don't think trying to force QB to a strict tax accounting basis is going to work for the reasons you mentioned above. I think you can figure the AAA, etc. from preparing the tax return. Again, I see no benefit to angsting over AAA, OAA, and AEP if the company has always been an SCorp. I have only needed to consider the ordering rules when the shareholder takes distributions in excess of basis, and I keep track of that via the shareholder basis worksheet in Drake. You might be making the bookkeeping in QB a lot more difficult than it needs to be. My own philosophy is that simpler is better. I am a simple woman

I thought CP stands for Civil Penalty. The presenter was a dud but I liked a lot of the info. And, you are sooooo right about the actual "AUR Experience" being less than the rosy picture he painted.

I'm actually loving CPE Academy. The live webinars are usually only an hour, so I can pay full attention instead of dropping off into my own drool after hours and hours. And, they are free! I'm finding them to be interesting and informative. Tomorrow, "Reasonable Compensation for Shareholder Employees of SCorps". It will be fun to see how the presenter determines this.

I have only used the AAA account when the company had AEP from previous years as a C Corp.

Drake has an M-1 reconciliation report, but you have to enter the book balance sheet in Sch L. When I'm confronted with a client bookkeeping disaster, I usually offer to keep the books myself on a tax (almost always cash) basis and let them use their Quickbooks to keep track of their payables and receivables. If they can't keep the books, they are probably just using QB as a word processor to print checks and invoices anyway. I agree with Abby regarding messing around with the equity accounts. I set up my SCorp equity section with the QB retained earnings and then I add an account called "current year distributions" to show the shareholder distributions, which I then close to retained earnings with a journal entry on Jan 1 of the following year. You might teach your client's bookkeeper to code any disbursement made to the shareholder to that distribution account rather than put it on the profit & loss. Pretty easy to run a report and just see what tax payments (estimated or otherwise) were made if the bookkeeper puts an explanation in the "memo" on the payment. Last thing: Has the business ever been a C Corp, or has it from day one been an S Corp?

Things I learned today about IRS AUR (most common: CP2000 notices): 1. Better to fax responses unless a huge stack of paperwork is involved. The response goes directly to an agent for processing instead of sitting in the mail. 2. IRS is "working" on a way to match K-1 forms. I got the impression that, as of today, IRS does not match K-1s. 3. Always best to provide a statement for any amount listed on line 21, showing each payor EIN and each amount separately. If IRS can exactly match an amount to a 1099, it won't issue a CP2000. 4. Better to call Practioner Priority Line and select Option 5 to be connected to AUR section. Those calls are routed to the front of the line, so less wait time. 5. Never send an amended tax return in response to a CP2000. AUR does not process amended tax returns, and it just muddies the waters. I think I've read questions regarding the above, and thought I'd share with you

Guy walks into a bar with a toad stuck to his head. "What happened to you?", asked the bartender. "I dunno", says the toad. "It started out as a wart on my butt!"

Eric....groan.....