Julie

Make that six, and I'm sure I'm not the last.

This is five. ERC, I had no idea you weren't a tax geek like the rest of us. This makes your willingness to set up this board even more altruistic and for that I (and the rest of us I'm sure) are truly grateful. Ask away!

I think that quote about a tax professional has a typo in it. You would probably have found it less insulting if it had said "a tax professional is a consultant."

Makes much more sense that way, doesn't it?

Thanks to all of you for much food for thought. The client and I are trying to meet next week to discuss some of the great points many of you have made.

He does have a local attorney;

the ADA attorney provides some advice;

I did forget about the nontaxable amount for transportation but really like the idea that the University actually provide it;

the "negative basis" refers to the deferral of gain on his present home as I mentioned in following Pub. 544;

I especially appreciate KC's suggestion of the U buying a house and exchanging it;

he is expecting that the transportation income would be increased to cover the tax liability;

I am not in the least offended by the suggestion to involve legal help as 2 are already involved;

I'm not so sure how to take the "tax professional" comment, though, as I am a CPA with 20 years as a tax specialist and an MBA (coincidentally from this same university) with a tax specialty - this is one issue that I have not encountered in my career until now;

some of the options presented were already "discussed and decided" between the client and his attorneys before I was approached to determine the tax/financial impact of those decisions or options;

the client and the local attorney are not convinced that this is such a "slam dunk" to make out like a bandit;

as mentioned earlier, he has not been eager to consider retirement although this evening it seems to sound more appealing if he could just figure out what to do with all that time - his Scottish work ethic, I believe;

I came to the "watercooler" to sound out this great bunch of folks to raise issues perhaps not considered and you did just that! Thanks again so very much. It's quite likely there will be more to come...

I think that would depend whether the dividends were reinvested or received in cash?

You are correct of course. [Reminder to self - think before idly combining numbers to reach a conclusion. ]

It's interesting to note that Yahoo historical quotes gives the "adjusted close" (adjusting for both splits and dividends) as $0.50 while BigCharts gives the "split adjusted price" as $1.1432. So it would seem that Yahoo is more useful when calculating return on investment (including dividends) while BigCharts is more useful when preparing a Schedule D.

And if you file the tax return, correctly inputting the false SSN in the W2 worksheet in order to efile the tax return, and filing the return under the ITIN number, are you not, by that action, informing the US government of that individual's fraud, and giving them all the information they need, should they decide to arrest and prosecute that individual?

In other words, if you call the police and inform them of your neighbor's marijuana garden, and the police do nothing, somehow you are complicit in his lawbreaking?

I understand that you're not comfortable with this, but consider: most illegal immigrants are low-income. They are not eligible for EIC. They pay SS taxes, just like everyone else. They are not eligible to collect SS benefits.

If a client presents me a W-2, that he/she knows has an improper SS# on it because he/she chose to use it to circumvent the rules/laws concerning employment, is that not fraud by anyone's definition?? The reasons why a person chooses to use someone else's SS# are irrelevent to the fact that it is fraud. I do not see any gray area in this matter.

I haven't done an illegal alien return in a while, but that seems to be how to do it.

I have a client whose wife works at a local restaurant and received a W-2 issued in her name with a social security number that doesn't belong to her. She has applied for and received a ITIN number and I have prepared her and her husbands tax return.

In the past we were not able to e-file these types of returns because of the social security number issue, not matching ect.... But I understood that starting this year we could.

I had a similar situation earlier in the year, and when I attempted to e-file the return it kept rejecting due to social security name mismatch.

What I did is on the 1040 I used her ITIN number and on the W-2 field I used the social security number that was on the W-2. Did I do this correctly? Am I missing something? I could not get the other one through at all, even though I had a copy of her ITIN document and spelled her name exactly as on that document.

I'm to the point that I need to send this new one through, but if I'm missing something I would like to correct it before I do.

Any thoughts anyone!

Thanks in advance, (p.s. I'm sooooooo glad that we still have a wonderful board as I really felt lost when ATX dropped us)

20

When I tried it, this is what happened:

ATX took one complete 8829, including the expenses and depreciation, then went to the other one. Problem is that most of the depreciation should have been disallowed, and the depreciation on the first home was being allowed in full, before the interest on the second home.

I asked the same question both here and on the NAEA board, and took the advice I got there, which worked. I moved all the interest, points, and expenses to the first 8829, and had only the depreciation on the second. That forced ATX to take all the interest and taxes, but apply the limitation to the depreciation, as it should.

--Julie

I tried a sample return & seemed to get both 8829's figures to flow to 1 Sch C. Here's what I did. I opened forms for 1040, C & 1st 8829. At upper-right of 8829 above the form, make sure that 8829 is linked to Sch C. Just below that, choose "Home #1" from the drop-down choices. Enter data.

Then go back to the Sch C and point to line 30. Use "jump" feature (the bunny). When the box opens, choose "add new form to add a 2nd linked 8829 to the Sch C. Then above that 8829, make sure to enter date in service, and choose "Home #2" from the drop-down. Enter data.

Using the above, I did see that totals from each were combined on line 30 of the one Sch C. I didn't try printing anything. The program had a red warning at top of 8829s that more than 1 8829 was linked to one Sch C, but I didn't see any red entries using the error-check feature.

I'd be particularly careful with the depreciation to verify that full year's deduction wasn't allowed on either residence. This might require overrides.

I'd be interested if you are successful with this procedure. I did not have this issue, but I do recall this question was asked on the old forum more than once.

Judy

As I understand it, there are two things required to deduct interest:

1. You must owe the money.

2. You must pay the money.

If there is no one who both owes and pays the money, the deduction may be lost. That's the problem here, as I see it. The parents owe the money, but the child is paying it.

If the child's name is on the loan (even as a secondary borrower), then the child can deduct the interest, regardless of whose house is securing the loan.

Another possible way to do this, if the parents cannot (or don't want to) get the child's name on that loan, would be for the parents and child to structure this as a formal loan, with interest equal to that being paid on the home loan. Then the child is paying interest to his parents, who claim it as interest income and deduct it on Sch A. It's all a wash, but the paperwork will all be in line.

Client wants to take a loan to help their child buy an asset (equipment) for the child's business. The child will pay the loan. Can the child take the interest on the loan off on a sch f? The child will probably take the depreciation of the equipment. My client will not take the interest on their sch A (loan is against the clients home, home equity). I know the IRS doesn't care if you take a smaller deduction or no deduction on your return. I am concerned about the child's return showing interest from a 1098 belonging to the parent. Can the child put an attachment to the sch f explaining that the child is paying the loan off and would be entitled to the deduction?

Different topic, went back an check cch message board and I am still getting the "closed message". I did notice that I was not logged in so I did log in and got the same message. Technology is great but today has been one of those days- email was corrupt and spent 2 hours on the phone with a nice gentleman too bad he was in India. He could not fix the problem unless I was willing to lose all my e-mail. Said NO and played with it myself. Found solution reverse order of the e-mail and move the good files out and delete the folder with the corrupt e-mail. Sometime I could wish for the good old days.

Thanks for letting me vent and for any ideas on the interest problem.

That should be "Double 8829/One Sch C"

What's the smoothest way to make ATX handle two offices-in-home for a single business? IRS wants a separate 8829 for each home, but ATX doesn't seem to want to cooperate.

This is a simple case: business owner sold his home and moved into another home. OIH in both homes. ATX wants to put all the interest on both 8829's, and if I just type in the numbers in the blue lines, the amounts are not subtracted from the Sch A.

I can do it by hand, and force the numbers, but I'd rather not do it that way. I'd like everything to be smoothly in place when I look at this next year (if I'm still using ATX by then).

I'm tired. There must be an easy, obvious way, and maybe tomorrow I'll be able to see it.

Try this one:

http://www.fourmilab.ch/ustax/www/sections.html

There is always a cite, it is the Internal Revenue Code. An Agent would never use a commercial source such as CCH in thier work papers and they would never use an IRS publication either. I did carry the Master Tax Guide with me on examinations but this was for reference only and I might furnish a taxpayer with a publication revelent to thier situation, but these were for information only to help the taxpayer understand the issue. An Agent's workpapers would only reference the code section, if the adjustment was unagreed the workpapers to write the unagreed issue up would include the IRC, the Regs and court cases. You can ask the Revenue Agent, or the Revenue Officer, if this is in collection, the IRC for your particular situation. These other sources have no authority. I believe there are sites on the web you can find the IRC for your cite and position.

Short version:

The exact details vary depending on whether it's an ISO or a nonqualified option, but the latter are more common. It goes like this: When you buy a stock or option from your employer at less than face value, the difference between fair market value on that date, and the amount you paid is added to your W2. Your basis, then, is the sum of what you paid and what was added to your W2. The addition may be on the W2, or not. In this case, that's your code V. Often the stock or option is sold immediately upon purchase, and the profit is exactly the same amount as was added to the W2, give or take a broker's commission and a few cents one way or the other. So, to fix the tax return, you need to go back to your Sch D, and add the code V amount to the basis...it should come out right. If you still have significant gain or loss, then study the rest of the paperwork carefully. There should be a pile of computer printouts "explaining" this. If it's an ISO, you can have gain or loss, otherwise I'd look very carefully at numbers greater than $20 or so.

Julie

Free time? What's that? I have a dozen returns to finish. I have to assist my mate in putting on an art show this summer, and soliciting out-of-town galleries for more of same. And my employer wants me back at work next Thursday.

And I'm just plain tired. I want to weed my garden, pet the kitties, adopt a puppy (our old dog died in February), and generally have a life.

I sent off my last extension after 11:00 pm the 17th. Sent one guy off on a frantic run to the post office that stays open till midnight (it was a 2003 return). 16 returns on extension. Most need more information.

I like First Page 2000, by Evrsoft It's free, although lacking in some of the bells and whistles of the current version (which costs money).

HTML is easy to learn. I suggest picking up a book by Elizabeth Castro. There are several versions of her "quickstart guide" to HTML. Even if you buy WYSIWYG software, a little HTML will help you polish the site to your satisfaction.

My web site is hosted by EhostPros. For ~$60 a year I get way more space than my tax business needs.....I'm hosting my husband's art site on the same account, and a couple personal web pages, to boot. The art site takes up most of the space, but there's still plenty of room.

Web site design is fun, and I'm starting to send out feelers as to picking it up as an off-season adjunct to my tax business.

I only use them on e-filed returns. Paper returns, never.