MJG CPA

This didn't seem to be a problem last year - only this year. I too am missing some ack's not only for extensions but for corp returns due today. So I am also praying. I was told by ATX that as long as they haven't been rejected, I can consider that they will go through okay.

I just had 2 1120's rejected with the "failed schema validation" error. I updated the program, recreated the e-files, and resubmitted them 10 min ago. PLEASE tell me they will go through. You guys that were having trouble earlier - did yours finally go thru??

Good one, OldJack!

I believe it is the use that determines the life. These assets will be used for construction and I would use the 5-yr construction life. The fact that the owner is in the rental business doesn't change the fact that this equipment will wear out as fast (maybe faster) than constr equip used in any other business.

Thank you for the reply.

There is not one to my knowledge.

Client had a daycare business in her home & took home depreciation for bus use of home. She is thinking of closing the daycare business and eventually moving in 2-5 years. Regarding the sec 121 exclusion, my understanding is she will have to report gain up to amount attributed to depreciation after 5/6/97. My question is, does this ever go away? If she holds the property for 5 years as her principal home with no business use, does the depreciation requirement go away? Or does it carry forward indefinitely?

Ooohhhh that's how you do it. Why didn't I think of that! :wacko:

My brain just won't squeeze one more thing out tonight - help!! Single-shareholder s-corp has dissolved business. Only a few thousand of assets, which were distributed to the shareholder in exchange for his stock and an unpaid loan from shareholder of $50,000. [shareholder loaned money to pay all the debts of the corp before going out of business.] There are no assets with which to repay the loan. Do I leave the liability on the balance sheet with an offsetting negative retained earnings?? Or zero out the loan and post the offset to retained earnings which zeroes out the whole balance sheet?

Can't get the education credit unless daughter is his dependent.

You don't need Form 1116 unless credit is >$100. In these cases, use the Line 51 worksheet and check the box for Form 1040. If more than $100, you'll have to use Form 1116.

Client calls this morning, "Uh, yeah, my bank just called, and my corporate account is overdrawn. "Um humm," I say [not sure where this is heading]. "There was a charge put through for a tax payment," he says. "Yes, that sounds right. I'm sure we asked you before setting up the payment by direct debit?" I reply. "Well yeah, but nobody told me to subtract it out of my check register." [You've got to be friggen kidding me...I am using all kinds of hand signals toward the receiver as I calmly respond... ] "I'm so sorry about that, maybe you could call your bank." The nerve of some people!!

If s-corp had prior losses, then loan basis could have been used to be able to deduct losses. Now that loan is being repaid, it would probably be treated as capital gain, same as an excess distribution - treated as a deemed sale of stock. Someone correct me if I'm wrong.

No, there are no amounts in Box 5. One of the forms (teacher) has no taxes withheld, but the other (municipal guy) has both fed and state taxes withheld. That one almost has to be taxable - otherwise, why would taxes be taken out.

I have had a few 1099-R's come through with nothing in the taxable amount field and, of course, the box is checked "Taxable Amount Not Determined." One was a school teacher and one a municipal employee. Do these sectors have retirement/pension plans that are handled differently than private sector? Is there any scenario where these distributions would NOT be taxable? I can't think of any, but without knowing the source of these funds now being withdrawn, I don't want to guess. Anyone out there have ideas?

Client has a legal document assigning POA prepared by attorney (I don't have a copy but could get one), but not a form 2848. Does this mean that I have to send a copy of the legal POA every year with the 8453?

When you click on line 4, for Business Expenses, you have 5 hard-coded lines, plus 15 blank lines to enter expenses. Surely 15 lines is sufficient - if not, you're being too detailed and need to combine like categories of expenses.

I see that this year, there is an extra box on the EF Info tab for signers who are personal rep or POA and a requirement to mail Form 2848 with Form 8453 after e-filing. My client has signed the tax returns for her invalid mother who is in a nursing home for years. Invalid mother can't sign anything. I'm not understanding who is the signer or the declared representative for Form 2848. Is the taxpayer (invalid mother) supposed to sign this form to authorize the POA to sign the return? Or is the POA (daughter) supposed to sign giving me, the tax preparer, POA over the return? If the taxpayer has no ability to sign for themselves, how are we supposed to get a signature for form 2848? If the other way, why would IRS force taxpayers to give POA over return to tax preparer? I don't understand ... :scratch_head:

I appreciate your replies.

Yes, he does live on the farm, but at 84, I would question active participation. I realize he could structure it differently, but what's that old saying about old dogs and new tricks? Is there any support that would allow this NOT to be self-employment income?

84-year-old farmer hires all farm work done, but not for crop shares or anything like that. He owns the land, pays all input costs, and receives all proceeds from crop sales... but does none of the work himself. Seems more like a passive activity, but as schedule F, he is paying a good chunk of self-employment tax. Is there ANY way this could be considered a farm rental? Creative ideas please!!

Account didn't get changed until 2008, so 1099 is issued in deceased's name for 2007. Do you think I will have to report on an estate tax return?

I have to eat my words. I just spoke with a very helpful person at CCH who tracked down my ack. I now know my return was accepted and she even e-mailed the raw data of the ack, pointing out how I could tell that it was accepted, and on what date, etc. I still can't get the ack electronically until the computer programmers figure out how to correct the mismatch issue that is occurring. But, hey, at least it's an answer!!

I know it can be done this way, I was just looking for a workaround so I wouldn't have to go to the trouble of applying for an estate EIN, etc.

You know, this just ticks me off - I've got enough on my plate without having to track down silly crap like this. I understand that things happen from time to time, but don't leave us sitting out here to fend for ourselves. I can't afford to lose clients because CCH doesn't have time or care to answer when problems arise.