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Client received $4250 in income from a company that was drilling to look for natural resources. They were actuall drilling on adjacent land but had to pay because they could be tapping into the resources from my clients property. They received a 1099 Misc with the amount in box 3 - other income. Does this go on line 21 or could it possibly be shown as long term capital gain? Thanks,

What would constitue a legitimate deduction for business vehicle? By this I mean when is it justified to transfer a personal vehicle to the company and deduct actual expenses there. I understand the actual versus standard deduction. My question related to when it is "necessary and ordinary" and what criteria is used to determine whether it should be business asset or personal vehicle with standard deduction taken. The business entitiy is an LLC if that matter.

I knew it should be added to capital. That is actually how I treated it. However, when a client wants it handled differently and we are as tired as we are this time of year, it is nice to confirm the treatment with other professionals. I have never had a partnership with a loan from the parnter. This is just how the client thought it should be handled. We all need to be reaffirmed in treatments sometimes. I am a sole proprietor and have no one elst but those on this board to run things by. Thanks to those who gave positive responses.

My clients were all informed in January that my office was closing on April 13th. My children are more important to me than my clients and they are on Spring Break. They are growing up too fast and I want to enjoy them now. I will try to get those done that call now, but if not, an extension is what it will be.

Both partners put in $15,000 in November to have some cash available if needed. They put it in a savings account in the business name. I've never seen a Loan to partner on the partnership books. Is this allowed. They hope to be able to pay it back sometime in the future. This is a pretty new business. I think it is more like Equity but want to be sure before I treat it this way. Thanks.

Thanks KC - that's why I love this board. I learn new things all the time.

Thanks KC and Bulldog Tom. I about had a heart attack last night when I saw the heading but quickly found out it was an April Fools joke. However, I can laugh today knowing someone returned the favor to Eric.

Am I required to input all the call options exersised as individual line items or can I group as 1 large item. They are all short term and at this late date, I prefer to group but want to do it correctly also.

Most of my clients have not and neither have I.

I have a client's mother who lives in Italy. She sold all of her stock in June 2008. These were all US accounts. She has captial gain income of $30,000 and the software is calculationg $129 in tax. Is this correct? This seems low but I believe it is correct since it is mostly all capital gain income. Any thoughts?

Thank you KC and Maribeth.

S corp shareholder had distributions in excess of basis. Per my research, this is taxable as capital gain. Is there any place to input this on the K1 screen or do I set it up as a separate line on Schedule D? I am trying to finish another return. Thanks!

I don't want to get political, however, the penalties and interest your client is being hit with seem much larger than some of the presidential appointees. It may be worth at least asking for some reduction.

Thanks for the guidance - I appreciate you taking the time to call support. Hopefully, that was helpful to others as well.

Client received K-1 from partnership that shows an amount in tentative allowable percentage depletion in the supplemental information attached to the K-1. Prior tax preparer showed this amount as separate line item on page 2 of Schedule E. When I show the amount on K-1 input sheet as depletion, the software created a new column for depletion but the number does not flow anywhere. Does anyone have any guidance to offer on this? Thanks!

Thanks for all the suggestions. I called the auditor again and he finally agreed to postponing until April 20. I explained to him what life is like for me this time of year. I am a one person shop and he finally gave in although I could tell he did not want to. Thanks again to all who responded. I may have more questions as I go through this process. It is definetly unchartered territory for me.

I spoke with the agent this past week and asked if we could delay the audit until after April 15. He was most uncooperative. I really am swamped and do not have time to deal with him until after April 15. I don't want to tick him off before the audit begins but feels he is being unreasonable. I am a sole proprietor and he wants me to drop everything for a 2006 audit?? Do I have any options?

I too was receiving phone calls from clients. However, I now give them the date per the schedule but tell them the goverment has been a little slow this year and it could be a week later. Everyone seems to understand and I have not received one phone call since I began stating it this way.

2008 was the first year for the S corp. In prior years they were a cash basis LLC. Since there was a new entity, they decided to use accrual basis. They are not really changing an accounting method since it is a new entity. My question has to do with how to show excess distribution on the tax return. Per my research, distributions in excess of stock basis is taxed as a capital gain. How is this shown on the tax return? Do I show an amount as negative in the other adjustment accounts line? I need something in order for the balance sheet to balance. Please help guide me. I have never encountered this before.

The corporation was newly formed and has a tax free transfer from LLC. They have always been cash basis but decided that it is time to swith to accrual basis due to some non tax issues. The have a small amount of receivables with large amount of payables at 12/31/08. This caused income to go down to $426,000. They are an S corp and distributed $473,000 to shareholders. I know this can be treated as dividend but am unsure of how to record on the books or on the tax return. Any suggestions? They do not want to record as loan to shareholder and that is not what it really was anyway. Thanks.

New client just brought in 1098-T. The taxpayer was in school for most of 2008. He was in graduate school. He was paid through a training grant for living expenses. The 1098T has 4895 in box 2 and 25086 in box 5 (scholarships and grants). Does this mean he has $20,191 in taxable income? I will be verifying with client that all that money was spent on living expneses and not education costs.

Thanks - I got it to work. I remembered seeing a post last week about it but could not find it.

I am having difficulty figuring out how to input the loss when it needs limited due to basis issues. The loss is $21000 but the basis is only $10,000. Please help on how to input into the software. :scratch_head:

KC - What is the IRTS website for fillable forms you mention here? I am not familiar with that website.

I haven't seen this but I am impressed that your personal return is already filed. Mine has to wait until late April or early May every year. Of course, I will fall into that FAFSA category soon, so will need fiegure out how to get it done earlier.