Julie

:bday:

Happy B'day!

Why would we lose this board, Mike?

Me, too! What exactly is going to happen?

I used the TaxWorks product from TRX and found it....definitely quirky. One minor issue was that I couldn't print the California 8453 until after I put in the 5-digit code for the federal 8879. For a return which is to be mailed to the client and the signature sheets returned, this is a nuisance. Second: I couldn't see any easy way to duplicate the return. I needed to change the dependents between the federal and state return, and could not do so without damaging the federal return. Result: I printed paper copies for my office records. Something I never do.

Overall, I'm not entirely happy, but I'm renewing with TRX ...the price was irresistible. I much prefer ATX software, but for half the price, I can put up with some quirks. I never had to call tech support for anything, unlike the last two years with ATX where I kept losing my ability to log into their website.

If I had 400 clients, I'd be back with ATX before now. The time wasted would be more than the price difference.

Hey, Julie, it's good to see your smiling face again!

Thanks. It's been a while since I checked in here. I guess I just realized I missed you guys.

I've always understood that an author's or artist's royalties went on the Sch C because he created the value. At any rate, that's his livelihood. He was in the business of being an author. If you bought or inherited the rights, you would put the royalties on the E.

I resisted getting married....we lived together for eight years first. When we finally signed the papers, it was almost with a sense of resignation. 22 years later, I realize that I never really wanted anything other than what we have.

I think I'm interpreting this the same way as jainen is.

This decision allows some of the loss to show up on line 21. I read this as saying they should put $1100 on line 21, and ($2264 limited to winnings) $1100 could have gone on Sch A.

"But because petitioners have elected the standard deduction, they are not entitled to itemize their deductions." (page 5)

Elected is a key word here. They could have elected differently.

I can't draw KC's conclusion from the decision. I tried.

I second the Spidell recommendation. I buy their handbook every year and most years I also attend their update classes.

Well, I ran into a problem like that last year. I couldn't get approved by any RAL banks because HSBC wouldn't give me the necessary report. So I didn't do them at all last year. Looks like I won't this year, either.

I'm with you....I wish they didn't exist and that clients didn't want them.

Awww! You remembered! And I've been neglecting you all for months and months! Sob!

In Firefox Ctrl+ enlarges the font (and Ctrl- reduces it), but for some reason I can only post if I go into IE tab, where that doesn't seem to work. Don't know if this is true for others.

I just downloaded Chrome, the new browser from Google, and discovered that if you set the viewing size there, this site is much easier to read. Check it out, it has a lot of nice features.

Okay, I know I was being sloppy above by making it 75% (although the varying room dimensions are still an unknown). I didn't intend to suggest ignoring other aspects of the law which might make for a different percentage, but presenting a way to apply the percentage.

With the facts given, I agree with Joan and jainen that the common areas must be excluded.

Only problem is that the B&B allocation is a court ruling. Pretty substantial authority for not allowing ANY common use areas as business.

Thanks. I think this is the relevant quote:

Although the tax code regulations provide that one spouse may sign for another spouse in the case of injury or disease when oral consent has been given, 26 C.F.R. Sec. 1.6012-1(a)(5), an agent can prepare a tax return for one or both spouses only when a power of attorney has been executed. Id. No power of attorney was executed in this case, and the tax preparer lacked petitioner's authorization to sign for her.

I may need that one, if it comes to that. In my case, the wife, although separated, would probably have given her husband the okay to sign for her, but not the tax preparer, whom she said she never trusted. Yes, lots of "I told him.....!!!!"

The Shea case involved a return where neither taxpayer signed, the preparer signed both names. You might want to check that one out. Shea v. C.I.R., 780 F.2d at 561

Here's a link to it. http://bulk.resource.org/courts.gov/c/F2/7...61.85-1087.html

Thanks. I knew the stuff jainen referred to, but I knew you meant something beyond that. This is new to me.

Doesn't apply directly to the problem I have now (because the tax preparer apparently forged BOTH signatures) but it seems like something I ought to know about.

I was referring to what is called the "tacit consent doctrine", Jainen. Whether or not a valid joint return has been filed depends upon a determination of the intent of the taxpayer. Heim v. Commissioner, 251 F.2d 44, 46 (8th Cir. 1958). There can be a binding joint return even though one of the spouses failed to sign the return. Kann v. Commissioner, 3 Cir., 210 F.2d 247, 251; Howell v. Commissioner, 6 Cir., 175 F.2d 240, 241; Lane v. Commissioner, 26 T.C. 405, 408; Stone v. Commissioner, 22 T.C. 893, 901 and Carroro v. Commissioner, 29 B.T.A. 646, 650 (1933).

Also see Walsh v. United States, KTC 1985-208 (D.Minn. 1985) for another discussion of it, as the courts have applied it.

Well, first, as icount said, you need to separate out the land. If you've already done that, and this is just the building: The part of the gain attributable to depreciation is going to be taxed at a higher rate than the part of the gain attributable to the appreciation of the property. Make sure your 4797 is filled out correctly for sec 1250 property.

I'm a bit confused by your entry about Deprec Recapture and 4 mos deprec? What was recaptured?

You might get more reliable results by using the sale page of Asset Entry in ATX, like RoyDaleOne suggested.

Listen to Bill. And Jainen. They are both right. In fact, this potential tarbaby, er, client, does not make sense. Ir might make sense that he was 'signing her name right and left' IF he had filed MFJ. But he would not have needed to sign her name to file MFS.

Also, if he was the one who was paying the bills, it is not unfair that he took the deductions for what he paid. Whether she was living in the house has nothing at all to do with it. It is who paid the deductible expense, unless they both agree to split them. And unless he agrees, there will be no MFJ amendment. No competent Judge would order it, because it's not something within their power. And what kind of 'businessperson' just 'assumes' that her taxes were filed, without even seeing the return, much less signing it. BTW, it is legal, under IRS rules, for a spouse to sign for the other spouse, if that spouse is agreeable to it.

But to answer the other question, the IRS would probably look at auditing these amended returns, simply because of the facts involved. First, a higher number of returns are audited when divorce is an issue. Then. you have a non-filer for 4 years suddenly filing, and that by itself can trigger an audit, because she owes for each of these years, and in such circumstances, the IRS knows that the filer often did not file because they owed, so when they finally do file, they often fudge the numbers. At least, that is the result that often appears when they are audited. So if you take it on, you want to do it it more carefully than normal. You want to see the records, not just take her 'list' at face value. You want, at a minimum, to compare her cash flow to her reported income.

Lacking further information, I would expect that the person who filed his own tax returns probably took care of the house payments, property taxes, etc. too. If she's competent to have a business, she knew that her taxes could not be filed without the business information, and she could have looked at the tax returns herself at any time.

It seems like the client is taking advantage of having you all to herself, to tell her sob story to. I'm not strongly inclined to believe it.

But, K.C., you said something intereting here: Can you give me a cite for the comment that it is legal for one spouse to sign for the other?

I would like the opinions of anyone who has bought courses from PES (Professional Education Services, LLP). Because the economy, this year I can not afford taking that wonderful trip to Vegas to get those IRS 18 CPE credits or attend any other seminar sponsored by any professional organization; so I am trying to buy self-study material.

Thank you in advance

Lucho

I've used PES a couple times, and I like the books they use. I would buy more from them, but sometimes I have to go cheaper yet. If you just need to fill in your hours, FunCPE is cheaper, because it just uses IRS pubs. I've also used ClientWhys.

One nice thing about online/mail-in CPE: if you're good at taking tests, you can probably finish the course in half the time.

It's not a vacation home. Vacation home rules do not apply to this situation, and don't make sense here. Like several people have said already, it's a regular rental of 75% of the property. Claim 75% of all expenses as rental expenses. Including the interest. Put it all on Sch E like normal, but only 75% of it. The remaining quarter of interest and taxes can go on the A--personal use.

But some other considerations come to mind: Is the fair market rental of the house more than 1200? If they're charging below 3/4 market rent, why? Daughter's friends? There are some loss limits on rentals below market value. Pay attention.

Are they charging enough rent to make this project make sense in the short term (that is, how much of a short-term loss are they taking?) If that's $1390 of interest, plus $250 utilities, plus property taxes and repairs, against $1200 rental value, this might require some thinking. (I'm assuming the daughter's portion is worth another $300, not that she's paying it, but that's a value the parents are receiving in not having to rent her a room elsewhere.)

At that point, you have to consider investment value, as KC mentioned. Is the value of the property in the future going to make it worthwhile? In some areas, maybe. In others, not.

I'm looking for the correct way to handle it

does it fall under vacation home? or would I claim rent on line 21 and expenses on A misc sub to 2%

would the interest be under interest?

after talking more to the client the pmt is 1400 and rent collected will be 300,300,300= 900

profit motive? I think no

:bday:

Or maybe he just has a thing for pink?

From the guy who called himself my 'number one fan' and was just ecstatice I could take his stuff at a late date and still get it done on time (not a difficult return) sent him a bill for $148.

Got a check for $275.

Single, no kids? 13k is too much gross income for EIC.

Sounds good to me...although it would be best if it then tinted all the entries purple (estimated), but let the extension fly as is. (So we don't assume that those numbers actually go on the 1040.)

What I would like to see is a way to click on any line of the tax form and select "Same as Last Year," without having to put in all the background numbers. Or, have an option to do the entire return SALY. It would sure make extension day go faster.

You mean there's a way to look it up? I've always relied on the client for that.

Try this combo while you wait for an intelligent response: first name, skip second (middle) Use first four letters of first surname, then space, then second surname.

I've got a return that the dependent just won't efile on; SSN isn't matching the master file. Kid has about 4 names and last name is hyphenated. Anyone know how to look it up?