LindaB

check IRS pub 4681, page 7, how to report qualified residence principle indebtedness exclusion.

That part of pub. 4681 is talking about canceled debt, and in this case there is no canceled debt. I think pub. 4681 is fairly new, first put out summer '08, and everyone should print it out and keep it handy.

Try Form 982, I think.

Form 982 is not necessary because COD is only reported on a 1099-C, not a 1099-A. The mortgage company used the 1099-A either because they knew there would be no COD because of the bankruptcy, or because they haven't gotten rid of the house yet.

I bet we will have this alot...Taxpayer received 1099 A. They filed bankruptcy and let the mortgage company take there house back. Block 2 Bal. of princ. outstanding was $104,000. Block 4 FMV was $74,500. The way I read 1040 Answers it says that it will not be taxed because of the bankruptcy. Do I just not show this anywhere on the tax return?

Since it's on a 1099-A the mortgage company is not reporting any COD income, so you don't have to do anything with that. Just look at it as if it were a sale of the property. If this was their principal residence, any loss would not be allowed, and if there was a gain, would it be excluded under sec. 121? Since the mortgage company did not include any COD income, you would use the loan outstanding amount of $104,000 as the sale price.

I just saw this on the ATX page:

Updates not downloading

02/04/2009

Some customers are experiencing issues with the updates downloading very slowly or appearing to be "frozen".

solution: let the updates continue to download--it will take several minutes to even appear to be working. You may also choose to try downloading the updates later, but you may still encounter this issue.

Dear friends

I have a client who defaulted in monthly payments on his principal home since last june 2008. He received a 1099-A from his lender with line 2. balance of principal outstanding 152K and line 4 fair market value of property as 176K. Does he has to report this transaction or attach any schedules along with his 1040. Can somebody please share their thoughts on this transaction. Thanks for your help

It would be treated like a 'sale' of his personal residence, so you need to look at it from that standpoint--i.e. does he qualify for the sec. 121 exclusion if there was a gain. There was some discussion last year for a case like this, some said they would not report it on the tax return, others said they would report it, since the taxpayer received the 1099-A, and the IRS doesn't know if it's for a personal residence or some other property.

Has anyone received the error code?

I have a return that keeps getting this code

and I can't find out why.

This is not in ATX but TRX Taxwise.

The person I spoke to in support was no help at all.

If this is an IRS error code, I think the problem might be with using the self select pin instead of practioner pin. I'm not at all sure of this, but if you used the self select pin, you might try switching to the practioner pin.

I just filed one where the baby was born 12/30/08, Mom had to go to the SS office to get a printout with the SSN, it was accepted by IRS.

Thanks for the replys, at least now I know the program version is up to date. I sent an email to support yesterday afternoon about not being able to update forms, I'll see how that goes.

Can someone tell me what is the current version of the program? I am at 2008.6.142 but have been having problems updating and I'm not sure where I stand.

I usually update through the program, with the manual option. A couple of days ago that process looked like it was working, but afterwards the program and forms still showed as if they were not updated. Yesterday I downloaded the program update from the support center, but I can't seem to get the forms updated either through the program or the download center.

This from ATX weblog on home page:

1040 state issues or info

01/25/2009

updated 1-23-09--state acks--We are receiving Acks from state agencies now and are beginning to send those acks to customers. We step through each new state manually for the first few acks to make sure the files received comply with standards and process correctly. Most piggyback states acks we?ve received will be out to customers today. We're working on states that use non-standard ack systems, including MA, CA, IL and OH. These will begin processing in the next day or so, and we expect to have all acks on autopilot by early next week.

We have heard that both AL and CO are having issues getting Acks through to developers, but both states are actively working to resolve this issue.

CCH SFS does not consider state acks late until 5 days after the federal accepted ack. At that point we research all returns missing acks and coordinate with the state agency to re-acquire all outstanding acks.

Just got my first ack back- rejected! It was my return and apparently somewhere in the e-file it says that I'm over 70 and can't make an IRA contribution. I don't know where it is, because I checked the dates that I havefor us and they are correct. How depressing! I'm twenty years older and haven't even made it through the first month of the season. I recreated it and hopefully, it will not kick back.

This came from the ATX notices on the home page:

0448 ? "reserved" ?new reject--If taxpayer age is 70 1/2 at the end of tax year and IRA Deduction of Form 1040 (SEQ 0700) and Form 1040A (SEQ 0626) is significant, taxpayer cannot deduct any contributions to traditional IRA or treat them as nondeductible contributions for they are ineligible for IRA Deduction

If this is a new reject code, maybe they don't have the bugs worked out yet.

You can go to Tax Warehouse and check the box in front of your standard deduction clients then click on reports and click print marked clients. The only problem you will get is seven pages with a line for each client! It will print a list, but it will print all columns in tax warehouse. You might try Accts Receivable, it will print two pages. I can't find an easier way. To save paper, print it PDF.

Instead of Print marked client list, you can Export marked client list, then work with it in Excel--get rid of excess columns.

This is what you need, I think--Knowledge Base doc ID 26879

Document ID 26879

Tax Year 2008

Product TaxPrep

"An update problem has caused incompatible..." when opening program

--------------------------------------------------------------------------------

You receive the following message when opening ATX:

An update problem has caused incompatible file versions to be installed and the program cannot continue until corrected. A new update is now available to correct the problem. Click Update to install the new versions.

After updating, you receive the following message when selecting the E-File Manager:

The program is unable to continue because an error occurred while attempting to display a message.

Key: ServiceEnrollmentPrompt

Error: Object variable or With block variable not set

Please contact Customer Service.

This problem can occur when Microsoft .NET Framework 2.0 does not install correctly, or Microsoft .NET Framework is missing, outdated, or the incorrect version.

To correct this problem, install Microsoft .NET Framework 2,0, and then reinstall your ATX software.

To manually install Microsoft .NET Framework 2.0

Right-click your Start button and then click Explore.

Navigate to C:\Program Files\ATX2008\Netsetup\System (if your ATX software was not installed to the default location, adjust the path accordingly).

Double-click dotnetfx.exe.

Follow the on-screen instructions to complete the installation of Microsoft .NET Framework 2.0. You must restart your computer once installation is complete.

Reinstall your ATX software. Refer to Document ID: 14660 for instructions.

You are now able to open your ATX software without receiving this message.

If the above does not correct the problem, it can also occur when the ATXMSG.DLL file has not been registered. To correct this problem, you must register this file.

To register ATXMSG.DLL

Right-click the Start button and then click Explore.

Navigate to C:\Program Files\Common Files\ATX\2008.

Right-click the ATXMSG.DLL file and then click Cut.

Navigate to C:\Program Files\ATX2008\NewFiles (If you installed your ATX program to a location other than the default, adjust the path accordingly).

On the Edit menu, click Paste.

Start your ATX program.

You are now able to start ATX without receiving this message.

If you still receive this message, contact ATX customer service at (800) 638-8291 or submit your request for support via our E-Mail Customer Service feature at www.atxinc.com/atxers/support/submitaquestion.aspx.

Last Modified on 12/05/2008 01:56:40 PM

I too waited till the last minute, renewed online after they sent me the software. It seems like I read after I renewed that they would be sending me a packet of information, but I have not gotten anything in the mail. Try going to the ATX site, click on 'Manage My Account' on the left side of the screen, then click on 'My Products' and it should show you your unlock code. It took a few days after I renewed for the 2008 unlock code to show up there. I haven't installed mine yet, but I think that's the code to use. Good luck!

Thanks RCooper and MAMalody.

So far she just gave me the amount paid written on a piece of paper. I started the return as if it were on a W-2 with housing allowance, came up with a balance due and filed an extension. The more I thought about it the more I thought we couldn't do the housing allowance 'after the fact.' I think I'll copy the return and change it so there is no housing allowance, then when I show her the difference maybe I can convince her to do it the right way.

While I was looking for info to print out for her, I found IRS pub. 1828 which I had never seen before. I think it's more intended for the people in churches rather than tax preparers, but there's a lot of good information in it. You guys might want to take a look at it.

Thanks again.

I have a friend who, with her husband, started a church some years ago. They are both ordained ministers. In the early years she was doing regular W-2s but didn't like to do the 941s. She would go to the local IRS office to get the forms, and when she complained about having to do the quarterly reporting, they (IRS clerks) told her to issue 1099s instead. She is now convinced that pastor income should be reported on 1099s. I think she did 1099s for a few years. For at least 2007 and 2006 she did not do 1099s or W-2s. I think she and her husband are the only ones paid by the church.

I have a reasonable understanding of clergy income, and I've printed some info for her, including some of the recent posts from this message board.

My question is this: Can she do W-2s, including housing allowance, for 2006 and 2007? Or is the housing allowance out, since it was not set up before? I don't do W-2s or 1099s, so I really don't know anything about doing them late.

Thanks for any help!

It's still there, the 5th one down on the list. The messages are not in date order, as one might expect.

I know it's because I'm sleep deprived (or something equivalent), but at 8:30 AM PDT I can't find where this message is currently posted. Could somebody who *has* seen it tell me where it was/is?

It's in the box 'Latest News' on the home page, but it's not at the top, there are older things at the top and it's down farther. It is also under 'ATX E-File Bulletins' on the E-file Center tab. Again, not at the top. Here is the latest:

updated 4-16-08 at 10:53am--Due to the high volume of processing returns and posting acks to customer's electronic mailboxes, we have limited how frequently customers can call and pick up acks. Acks can only be received within a two hour interval. Once we have everything processed and posted to the mailboxes we will increase the time frame to pick up acks.

Also in E-File tab, about 4,000 returns show as missing from the 4/15 6:00 p.m. drain for Kansas City, and about 14,000 returns missing from all centers for the 4/16 2:00 a.m. drain. I have no idea what is the status of 'missing returns.'

updated 4-16-08 at 9:50am---We have confirmed that all tax returns received by our EFC by midnight last night will be considered timely filed by the IRS.

updated 4-16-08 at 9am-- All acks from 4-15 drains were posted by 10pm last night.

updated 4-16-08 at 9am-- All returns and extensions sent to us by midnight have been sent to the IRS but not all by the 2am drain. Some will go into the 11am drain. We will be processing 2am acks for a few hours, and will get those posted as quickly as possible. Until these acks are posted, the Return Query program will not reflect the correct information. CS reps can tell you nothing more about specific returns until the acks are processed.

Here's an interesting article on foreclosures (I know 4/15 is a bad time)

http://biz.yahoo.com/ap/080415/foreclosure_rates.html

From the article:

Foreclosure Filings Against US Homeowners Soar 57 Percent in March; Bank Repossessions Surge

The onslaught of homes facing foreclosures has yet to ebb, a research report showed Tuesday, with bank repossessions skyrocketing last month as more troubled homeowners mailed in their keys and walked away.

...estimates between 750,000 and 1 million bank-owned properties will hit the market this year, or about a quarter of the homes up for sale. In some areas, these properties will continue to slow sales and depress prices further.

It was her primary home, do I need to file form 982?

No, you don't need form 982 because the 1099-A only shows the transfer of ownership from the taxpayer to the lender, it does not show any cancellation of debt.

A 1099-A should be reported as a sale, so you need the taxpayer's basis in the home. The sales price in your case is $34,572, the smaller of outstanding principal and FMV. A loss on a personal residence is not deductible, and the gain may be excluded under sec. 121 so you have to look at that.

There has been some disagreement on this board about whether or not you have to actually report this for the taxpayer's primary home, if there is a gain and they would qualify for the sec. 121. Some very smart and well respected people say you don't have to report it, and some of us would go ahead and report it anyway, so you can decide for yourself.

I think that the lender does not report cancellation of debt income on a 1099-C until they have actually sold the property. If they foreclosed in 2007 and don't sell the property until 2008, (and sell it for less than the loan amount) your taxpayer may get a 1099-C for 2008. Then you would use form 982.

Have a client with form 1099-A (Acquisition or Abandonment of Secured Property).

Box 2 Balance of principal outstanding $34572

Box 4 Fair Market value of property $50100

Box 5 Was borrower personally liable for repayment of the debt? Yes

Can you please give me some advise where do I have to report these amounts on Federal Return 1040.

Thank you

Was it taxpayer's primary home, or rental property, or investment property, or what?

I also have the 100 efile, charge after that. I assumed that each fed. counts as one and each state counts as one. In the ATX program, on the Return Manager tab, it shows on the top left the number of returns but on the E-file Manager tab, it shows a higher number of efiles, counting each fed. and state and extension.

Thank you. Yes, the net income before depreciation came out to be around $500. Total depreciation was $2866, but only allowed to use $500, and other will be carryover.

:-)

Why can they not use the total depreciation and show a loss?

>>depreciation for that period<<

Depreciation does not stop just because there is no renter or rent income. It only stops when the asset ceases to be rental property as a result of disposition. Not sure about tomorrow is not disposition.

I just meant for 2007--they can worry about 2008 next year.