Diane

Since he has sold off all the assets, has no cash, etc. -- would this be considered a liquidation? I have kept track of his stock basis and loan basis, calculating all the losses passed through to his 1040. The loan on the books will not be the final basis of his loan.

Diane

My client has sold off the equipment in his Sub S corporation. He has an outstanding loan to the corporation of $950,000. Even with the sale of the assets, there isn't enough to pay the loan back to him. How is the unpaid loan handled on the final tax return? The corporation has not made a profit since it started.

Diane

Client has 2 homes (interest on Schedule A) and 3 rentals. He purchased a 4th home in 2010 with intentions of renting. But, so far, has not rented. He has been renovating and repairing. Not rented in 2011 either. What do you do with the mortgage interest? I don't think it qualifies as investment interest expense.

Diane

Thank you, sometimes you have moments when you doubt yourself.

Diane

I have a client who took out a loan on his rental that had no existing mortgage. He used none of it on the rental. I am telling him that the interest is nondeductible personal interest. Am I right?

Diane

Client borrowed money from brokerage account to loan to grocery store that is now owned and run by his sons. The client is no longer a shareholder. Don't know if the loan will ever be paid back. Client wants to claim the interest on the loan as investment interest expense. Is the interest deductible if it's a loan to the store? Could this interest be deducted if the money was used as a Capital Contributioin?

Diane

How about the client who wants to know why I didn't take the credit for the heat pump she bought last year. Answer -- you had zero tax to begin with.

Diane

Which is the best way to carryback an NOL? -- Form 1045 or 1040X?

Diane

Thank you, thank you! I have been trying everything I could think of to get this return efiled. At least I know it's not ME! I'll wait until next week. and try again.

Diane

And, how do I create this statement?

Diane

The Form 2555 is one of the efiled forms. I don't know what kind of statement they are talking about. The worksheet for Line 21 shows only the info from From 2555. What kind of 'statement' has to be attached?

Diane

There is nothing else going with this return. One W-2, Schedule A, Form 2555. It's in Washington State, so there isn't even a State return. It couldn't be cleaner. I can't figure out what they are talking about. The only entry on Line 21 is the Form 2555 amount.

Diane

Client has foreign earned income Form 2555. The negative amount goes to Line 21 of the 1040. I've gotten a reject code of MEFFDF1040-080 - Form 1040, Line 21 'TotalOtherIncomeAmt' must be equal to the sum of Line 21, 'NetOperatingLossDeductionAmt' and all occurrences of ('OtherIncomeAmt' in [OtherIncomeTypeStatement] attached to Line 21).

What am I missing?

Diane

Thanks, I'll have my client get more details on this fee.

Diane

I have a client whose primary care doctor is going to charge an annual fee to his patients. He will only be taking the first 600 who sign up. They call it a concierge fee. This fee is supposedly going to give each patient more time with the doctor and more wellness programs. She is asking if it will be deductible as a medical expense. My first inclination is Yes. Has anyone else heard of this?

Diane

I also have to file Form 8941 for one of my 1120S clients. So far have not seen it on ATX. Can't even find out when it will be available. So, I went to IRS, they have the form, and it is a 'fill in' form. I used the worksheets from the publication, then filled in the online form.

Diane

I have an Add On for Firefox. It lets me right click the Tab that I'm in, then choose 'switch rendering engine'. It changes just that Tab to IE. You can go to 'Tools' in Firefox, choose 'Add-ons', then find the one for IE. It's called IE View. I've had to use this tool off and on. Most web sites are compatible with most of the Browsers. I find it really annoying that ATX would do this.

Diane

Firefox has an Add On so you can change just the tab you are on to IE.

Don't know what it would be in Chrome.

Diane

I've not been able to get on to MyAtx either. Called ATX. They said it's only compatible with Internet Explorer. I've used Firefox for years and have been able to log on to MyAtx and the Solution Center, no problem. Except for today. So, I switched the rendering engine for my tab, and it now works. ATX said that it sometimes works with Firefox, but not always. Seems it's been working in Firefox for several years, no problem. Until today. So, if you are not using IE, try switching the rendering engine.

Diane

I schedule tax work in between tennis matches.

Diane

I don't do the books for the Partnership. This particular partner asked me to come up with a schedule with interest for his loan. I will discuss with him the accounting basis (cash or accrual) and inform him about the differences. I also will not prepare any 1099's for the partnership. I just wanted to be able to tell him what the consequences were in relation to the 2011 payments to him.

Diane

Client is in a Partnership. Loans the Partnership money as the cash flow needs it. The Partnership pays him back as the cash flow allows. They have not been paying (or calculating interest). He now wants to calculate the interest -- at 5%. I came up with an amortization schedule and calculated the interest from the beginning of the loans/paybacks. On the schedule I added the accrued interest to the principal balance of the loan since no interest had been paid. My questions -- is this the correct way to do this? And, for the paybacks in 2011 -- do I calculate all of the accrued interest (from the beginning) as interest income (1099-Int) and the balance of the payback as principal? I did not do his taxes in 2008, (when this began) nor do I prepare the Partnership tax return. I just enter info from the K-1.

Diane

What are the rules for 2011? I'm reading that it can't be deducted in the calculation of self employment tax.

Diane

The 1099 fiasco has been repealed and not postponed. Right?

Diane

Got mine today also.

Diane