ICOUNT

On Series EE bonds you report the interest in the earliest in the  year when the bonds mature or the year they are cashed in. So the bonds matured  years ago that are now closed years. The bonds are now cashed ----Is this interest non taxable because it relates to a closed year?

I have  a couple of clients in the past have asked me to attach a copy of their return as a PDF to an E mail. I am aware of CCH Portal---the cost is approx. 450.  I know that adobe can be purchased for about 150 annually. Could anyone else suggest a program to encript a PDF file with password protection? Thank You

I'm a one person ( 67 years old) office using an XP professional computer. I have been backing up ATX data to a flash drive and an external hard drive. I was considering to purchase a laptop or notebook to back up to. I called ATX and they indicated I would need an XP professional computer ( at least they strongly recommend it) It would be difficult to purchase & set up a new computer especially during busy tax season . I checked with Best Buy-----they don't sell xp professional computers. What does a person do?First has anyone used Nortons Ghost backup which supposedly will back up the entire hard drive & therefore it would not be necessary to install the programs over? Is it possible to make a copy of the hard drive on an external hard drive & if the hard drive crashes plug it in to another computer. What about having 2 internal hard drives & having them mirror each other so if one crashes just switch to other ? I would still back up my data & take the external hard drive home. Would a person try to find a used XP professional computer to have in case of a crash? In case of a crash what about the internet addresses etc? Can I use original xp disk on a new computer or hard drive? They tell me there are different versions of XP professional program.

Another concern I have is the potential office break ins. My office does have a building alarm---there has been a number break ins in this area. Has anyone thought about all the confidential info on the computer & office? Is there insurance available ?

I appreciate your comments

There are a number of ads for online backup. As a suggestion I would think that ATX would consider offering such a service.

PS

Would like to have a complete drive backup.

I have a client who owns a commercial building that he rents. He will be putting a new roof on the building in 2009 along with solar panels. He has been paying alternative minimum tax in the past. I know that roof replacements have been discussed in other forums----I would like you to google " The Tax Aspects of Roof Replacements " in Corporate Business Taxation Monthly for October 2008. This article seems to give the green light to treating replacements as repairs based on proposed regulations & tax court cases. The other question is related to the solar energy credit. First it does appear that there is a 30% credit available for solar panels for rental commercial buildings. It appears he can claim the credit based on cost or a production credit based on output. Also it appears there is a grant available by ARRA. Does anyone know about the grant? The next question if he pays alternative minimum tax is the credit moot since he can't utilize it. Can he carry this unused credit forward of back? ---Why does life have to be so complicated?

I have a client that called me re: saving SE tax by renting a shop bldg to his sole proprietorship LLC. He is in the construction business- tax reporting as a sole proprietorship. Taxpayer & wife Jointly own a shop building adjoining the residence which the LLC uses. We have been taken expenses for the building on Schedule C. His question can the LLC pay rent to his wife & him at a fair rental value more than the building expenses and thus save on SE tax. I know this has been discussed at seminars---but I can't put my finger on it in my research. If the business was incorporated I don't think there is a problem. How about an LLC reporting as a proprietorship?

Thanks

Grandparents make gifts to granddaughter of her college tuition and also health insurance premiums. Also they make gifts of the health insurance premiums for son's family including the granddaughter. They pay the premiums and tuition direct. The son and wife claim their daughter as a dependent on their 2008 return. Question can they also deduct the health insurance premium paid by the grandparents( sons return) along with the college tuition. I don't think there is a problem with the education credit- since the credit goes with the exemption- not sure on the deductions. The reason the grandparents pay directly is the gift can be over the $ 13000 annual gift tax exclusion

I have toiled with this issue many times. An article in Corporate Business Taxation Monthly the October 2008 issue addressed this. It is titled "The Tax Aspects of Roof Replacements" I would suggest that you put this in your search engine. It stated that recent proposed and re-Proposed regulations aimed at codifying tax case law make it clear that in certain cases required expenditures for a replacement roofs including materials and installation labor can be expensed as repairs for tax purposes. Before I read this I generally was of the opinion a new roof had to capitalized. There are three tests. The betterment, the restoration & the adaptation.

Client renting out business building (Sch E). New roof added in Mar 2008 replacing old one installed in 1999 with 39Y S/L

depreciation. In checking with other preparers I get a variety of opinions - some are saying expense it while others are saying capitalize it. One firm told me if the repair is less than 50% expense it, if in excess of 50% then capitalize it and depreciate for 39Y. Another person belonging to a local Chapter stated that a COURT RULING came out in 2002 stating roofs could be expensed and need not be capitalized, and this has been their policy since 2002. Has anyone heard of this ruling? and too, can we rely on such rulings in our tax practice? I've looked at several publications in which building components are listed but the ROOF is conspiciously absent. In looking at QF book & their depreciation manual; the TAX BOOK, PPC AND GEAR UP, the word ROOF is no where to be found. Does that help us any for expensing, at least for 2008?

Repairs vs. Improvements has always been a continuing controversy. Possibly the new proposed regulations may put an end to such. See page 7-6 of the TAX BOOK on details, and take special note on how they define BETTERMENT & RESTORATION as Capital Improvements. Any suggestions?

I have completed this tax return and before I call the customer and tell her she need to pay I would like to know I am right.

TP rented out this prorperty since 10/2003. She lived there for 3 month prior to her renting it out. She sold it on 4/28/09. I prepared form 4797.

Sales Price..............................................455,000

Cost/Sales expense..................................362,631

Depr recaptur + 4 months of depr...............56,212

Adjusted Basis..........................................306,419

Gain.........................................................148,581

This gain is shown on line 13 of form 1040.

This amount did not show up in Sch. D! Why not

Do you see any wrong with my calculation. Is there any way to legally avoid the recapture?

Thanks much

Helow

The gain should be shown on Form 4797 first. I assume by recapture that capital gains can be taxed at the 25% rate. On the sale of rental property there actually are two sales---the sale of the building and the sale of the land. The sale of the land would have no recapture and qualify for the lower capital gains. Thus is all the gain was attributed to the land there would be no recapture.

I don't usually get this situation. Have a client rents a 3 bedroom apartment--lives the entire year with girl friend, her 2 children ( not his ) girl friends mother and girl friends ex husband. He is the only one that works. He claims he supports the clan. He wants to claim the children as exemptions which I think he can do----since they lived with him the entire year. He didn't say anything about the girl friend or ex husband ( Public Policy issue). The grand mother does get a small pension. It is my understanding that he could not get the child credit ($ 1000 each ) or qualify for the earned income credit since the children must be related even though they live with him the full year. I do believe he can claim the exemptions though. Am I right on this Also I think he can file as head of household.---These returns are the most difficult.

Thanks

CRP payments are reported on Form 1099G. In 2008 if paid to a person receiving social security they are considered to be rental---no self employment income or loss. Is there a way of linking Form 1099G with Schedule E? Actually I wish they were classified as self employment---since there is a loss to offset self employment business income

Thanks

If you have a client with a number of pages of stock transactions---do you copy the pages and paper file the return. It would seem that this situation cuts down on the number of E-file returns. Has the IRS a stated policy on this?

Thanks

I have several partners in a farm partnership that has income & Section 179 depreciation. I got an e -file error stating that if the farm work sheet for line 1 includes a deduction for 179--- then the return must be paper filed. I assume this would apply to a partner in a business partnership with section 179 also. Thus a lot of returns that were electronically filed other years can not be electronically filed this year. I called ATX support----on the line for a long time--they said this is true. Anyone else run into this?

Are any of you getting impatient with some of the forms that are not available for filing like form 8606? Why are they not available? ATX keeps setting the date back ---now its Feb 6th.

I have a client that couldn't sell her previous home so she rented it during 2008. She paid mortgage insurance premiums on the rental mortgage in 2008. Is this deductible on schedule E. I think not -since mortgage premiums are only deductible on her residence. Agree? Thanks

Is it possible to get Federal estimated tax payments for a client for 2008 from the IRS website?

Thanks

It seems that I remember reading that new regulations require an LLC that has been reporting p/r taxes etc under an old # received before the LLC was added is required to apply for a new EIN #. I can't find this in my research. Can someone shine some light on this or am I wrong.

Thanks

These are tough times. I had a client called re: He is president & sole shareholder of his Corp if he could lay himself off and draw unemployment benefits. Officer shareholders do pay unemployment on the compensation for state purposes as I recall because Federal requires it. Has anyone have clients if this situation that have successfully drawn unemployment?

Thanks for any enlightment

I am a sole practioner and trying to change the master engagement letter for instance from our firm to my firm. I get to where it shows our/my but how do I choose my/

Thanks for any help.

Tried to call ATX but it said this was a holiday.

Join Date: Jul 2007

Posts: 3

Default Experts S Corp W-2

Lets assume a S Corp pays its 100% shareholder (only employee ) $ 50,000 of that amount $ 20000 is contributed to a one man 401 K plan. The Corp also puts $ 3000 in a HSA plan and also pays $ 5000 in health insurance for the shareholder employee. It is assumed that the health Insurance qualifies as a plan( rules have been liberalized by the recent ruling). What amount should show in box 1, box 3 & 5 and box 12. It would be my understanding Box 1 should be 50000-20000+ 5000 or $ 35000. Box 3 & 5 should be $ 50000. Box 12 should show the $ 20,000 401 K contribution and also according to the instructions a w should be entered for the HSA plan contribution. Now assuming the corp wants to make a maximum SEP contribution ---- is it 25% of Box 1 or $ 35000 . In other words can you use the $ 5000 health insurance premiums to maximize the SEP contribution. What amount do you calculate the SEP contribution on?

Thanks

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I previously posted this on the taxbook forum but only got 1 reply. According to the W-2 instructions the HSA is not included in box1 but should be indicated in box 12. More importantly what amount is the 25% SEP contribution based on and also the amount that is used by SS for reduction of benefits if under 65.

ICOUNT

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