LindaB

I have a return in which client owns two house/two mortgages. One is used by them, and second one is rented in March 2007. Current tenant will be moving out in this month, and client is not sure if they would rent it again.

I need help on how to complete Sch E. PLEASE!

I'm not sure what your question is...

Sounds like 10 months of rent for 2007, depreciation for that period, mortgage interest, etc. Just because they might not rent it again after this month doesn't change that.

i don't get it, my reading is if all is spent on education even the income isn't picked up, am i wrong?

If you use a tax free distribution from this plan to offset tuition, then you can't use the tuition for the Hope or Lifetime Learning credit. I think Lion is saying that the parents might be better off to take one of the credits, and let the child report the income on his/her tax return. (The student should be the beneficiary of the 529 plan)

Mike, the 1099-Q doesn't go anywhere. You compare the tuition paid with the amount out of the 529 plan. As long as the tuition is equal to or more than the total distribution from the 529 plan, then nothing needs to be reported.

Qualified expenses also include, besides tuition, fees, books, supplies, equipment, and reasonable costs of room and board.

Just got this off ATX site:

High volume April 14-15 is generating "server errors"

04/14/2008

We are experiencing very high efile volume today, 14th, and expect that to continue tomorrow too of course. We are seeing more "server errors" today than usual, and there is no action needed. Simply keep trying to send your efiles. This high efile volume translates into higher call volume to the CS Dept and our wait times are much longer than usual. We have added staff, increased hours, shortened lunches, and extended our closing time to 11pm tonight.

ELECTIONS - THEN 1040 TAB, AND ITS NEAR THE TOP OF THE LIST

Thanks, I found the election and marked it, but it doesn't seem to show up on the efiled forms list, but it did print out when I printed the return. I guess I'll type it in on the efile elections tab, then they can maybe get it twice.

How would you attach a statement in ATX to waive the carry back for an NOL? If there is a special form for this, I can't find it.

I found it when I checked the return--"An election statement is available in the Elections/Statements Workbook"

How would you attach a statement in ATX to waive the carry back for an NOL? If there is a special form for this, I can't find it.

Can this be considered as other income?

No, you cannot put it on line 21.

This is from Pub. 551, Basis of Assets:

under 'Deducting vs. Capitalizing Costs'

"...you can choose either to deduct or to capitalize certain other costs. If you capitalize these costs, include them in your basis. If you deduct them, do not include them in your basis (See Uniform Capitalization Rules, earlier.)

The costs you can choose to deduct or to capitalize include the following.

Carrying charges, such as interest and taxes, that you pay to own property, ..."

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This might give you another place to look. I remember a discussion about this in the past, maybe someone who knows for sure will post.

How do you tell ATX that a Roth IRA Distribution is not taxable? The account has been in existance for more than 5 years and has not had any earnings.

Form 8606, part III.

This might be what you're looking for, I didn't read it all:

http://www.irs.gov/retirement/article/0,,id=162416,00.html

You could check and see if it would work out better if you amend Dad's return and add child's income on form 8814.

BUT, I had one today who came in with her mother. She was going to claim herself. She only made $964. I asked the Mom why she didn't claim her and Mom said "because she is 20!" I said, "but, who supported her and of course Mom did. Unfortunately, Mom's husband has already filed "on the Internet" so I filed girl without claiming herself and will have to amend Mom and her Husband after the load lightens. In any case, the daughter would not qualify for the stimulus rebate, would she? So, nobody will get that, but the Mom can sure use that lost exemption. Or, am I reading this wrong?

Daughter won't get the rebate because she didn't make over $3000. Mom and Dad won't get it for her, even after they amend, because she is over 16 years old. Daughter may get it on 2008 return, if she has enough income and claims her own exemption.

You will also need the basis of the property, and report the sale how you would for the type of property--personal, investment, or business.

I understand about filing schedule D, but what about 4797. The information should flow from that form to sch. D. correct. In other words, do I need to fill out both forms.

Report it on the 4797 and it will go to sch. D. Yes, you need both forms.

If a distributuion is made at least 2 years after the plan was established, is nothing subject to the extra penalty?

I think this is correct. In Pub. 590 under 'When Can You Withdraw or Use Assets?' it keeps talking about the two-year rule, but it is always the 2-year period that begins on the date on which you first participated in the employer's SIMPLE plan.

I checked a little more, too. There might be two five year periods to look at--

1 ) 5 year period beginning with the first taxable year for which a contribution was made to a Roth

2 ) 5 year period starting with the year of a conversion contribution from a traditional IRA to Roth

For distributions to a beneficiary after the 5 years, no tax on earnings. If the distribution is within the 5 years, earnings are taxed.

I have a client that is a financial advisor. This morning he told me that a CPA told him that if a person converts a regular IRA to a Roth IRA and pays the tax at the time he converts it, and if he dies and passes the IRA to his beneficiary, the beneficiary has to pay tax the IRA earned from the time it was converted from a regular IRA. This just doesn't sound right to me. Do any of you know anything about this, or is this one of those things that gets twisted. He says that he was told this by a respected CPA that has been in business for a long time. Any comment on this will be appreciated.

No, this doesn't sound right. I did a quick look in pub. 590 and it said that if it's been at least 5 years from the beginning of the year in which the Roth was set up, and a beneficiary receives a distribution, it is not taxable and no penalty. I didn't look further to see what happens if there is a distribution to a beneficiary in less than the 5 year period.

I think you should read in Pub. 970 and see if any of is really taxable, and not just do it or not because he wants the $300 rebate.

If she doesn't want to cause any trouble, a 1040X is in order.

You can't amend and go from MFJ to MFS, can you?

I looked at the IRS website for 'drain times' and it looks like it has to be filed by the last drain time on 4-15. Drain times vary for different service centers. I tried to go to the ATX website to look for drain times, but the website is down, try later.

She should file MFS, she will have to mail the return if the husband already filed a joint return. There will probably be some inquiry from the IRS for both her and the husband. As far as claiming the kids, aren't they qualifying children for both parents? But she is now the custodial parent. She could claim them or not, the IRS would question both parent if she claims them, maybe the lawyers will have to settle it.

I still think there's something fishy going on..

Later I was trying to think what the rule was---that you could solve for 3 variables if you had 3 equations, I think. I tried to solve again pretending that I didn't knowing the tail was 8 pounds, but just went round and round with the equations. It would only come up with a 'blueprint' for a fish that could be any size, but proportional to this fish.

Yes, I edited my post but it was before I saw your post. After adding the reply, I looked to see how others had responded to the brain test. That is when I saw that you had the same answer. I put the formula down to show anyone that visited the post, how I got the answer.

Dan, I think we were working on it at the same time.

Are all of the old posts still available on the official community? If so, I would say it's still a valuable resource and I'd consider linking to it. What do you folks think?

Also, how are posts on the official community with links to this site handled? Are they censored or left alone? Just curious.

No, the old posts aren't there. I just went and searched for any of my posts and there were none. I think so far they are leaving the posts with links to here, I've seen a couple.