MargaretMort

Client is outside salesman. Won two contests from two different companies represented by the business--is not self employed. The 1099-s are both with income in Box 7 instead of Box 3. I want to put the amounts on Line 21 as other income. Is there a way I can show the 1099-Misc with Box 7 and tell it to put it on Line 21? I know I can just enter the amounts as other income but expect the IRS will be looking for a Sch C. Thanks in advance, as always. MM

Hadn't thought about the fact that it will show a profit. As I said, I haven't dealt with this situation before. Thank you. MM

Not a client but an acquaintance who knows I do taxes. She and her husband are divorcing, is final in 2011. I already told her she would have to file MFS or MFJ for 2010, won't consider MFJ. Neither one could afford to keep the residence they have jointly owned for a number of years so the bank, I suppose, took it back and issued a 1099-S but only in the husband's name and SS. She wants to know if she has to report it on her tax return also. I have no experience in these matters and I can't seem to find any relevant info so I am turning once again to all you experienced preparers for help. My sincere thanks in advance. MM

Here are two numbers for Canada Revenue Agency: 1-800-959-8281 or 1-800-267-6999 email: www.cra-arc.gc.ca My friend says there is a search button on that website where you can get info about pensions. Hope these help. MM

I just sent an email to a friend in B.C. asking her for a number or email address. I will give you the information when she sends it. MM

That may be correct. It has been a number of years since I had that particular situation and I no longer remember for sure. I would call the Canada Tax people. Whenever I spoke with them they were very helpful. MM

I have dealt with Canadian taxes off and on for several years. My best advice is to check www.cru-arc.gc.ca/tax. I have the name of someone I dealt with in Canada--don't recall precisely what for and I don't recall when but it may help, who knows. [email protected] Another source, excellent, was Brian Levy who used to come on the chat room several years ago. The email addresses I have for him are: [email protected] or [email protected] Hope this helps. MM

No, they have taxable income. In fact, they owe more this year in taxes than recently. I had to compare last year's return to this year's to learn that though neither of the retired pay 1099s had COL increases, the withholding had gone down. They had more money in pocket and now owe more as a result. One of the retired incomes has received an adjustment statement informing him that the withholding will now more than double because the withholding tables have changed. Since I don't deal in payroll I wasn't aware of this, not that it makes any difference. At least I can now explain to the client the why behind it. MM

I am sorry, I left out important information. The tax return is, basically, very simple, interest, retired pay (2), and the long term capital loss carryover. The amount carried over from last year is correct. My question is really about the fact that when I went to print the carryover sheet, it showed the same figures that were printed last year. In other words, it didn't deduct the $3000 from this year. I certainly am capable of keeping a running record of the carry-over, it just confused me when this showed up. Thanks for your help. It isn't a big deal, yesterday was my day for looking at things from the wrong perspective and being confused. MM

Client has long term capital loss carry-over. I realized, after completing the return, that the Sch D was showing the carry-over to be the same as the 2009 carry-over. That can't happen because he is no longer day trading or anything else with the stock market, this is strictly carry-over loss. I checked to see if the Sch D is current, doesn't look like it. Has anyone else run into this or is it just me messing up somewhere. MM

I read the instructions for the 1040 for Line 29. I love that they tell you to consult pub 535 which won't be upgraded until mid-March. My sincere thanks to everyone for all their assistance. In reading the responses it is good to know that I am not the only one who is confused. I plan to finish my return Friday--the carpets are being cleaned tomorrow--and e-file it and get to work on the other returns that are arriving. Again, THANK YOU, THANK YOU, THANK YOU. MM

I finally was able to download the last 1099 for my personal tax return--I never do anyone else's return until I have re-awakened that part of my brain making mistakes on my own. If I am going to take the Medicare Part B premiums as a deduction against my SE tax, I still don't know where I am supposed to show it. If you add it to Line 29, it carries to the SE but it also deducts from the total income which it isn't supposed to do as I understand it. I checked Pub 535 but it is, and will continue to be until sometime in March, the 2009 version which, of course, says you may not use those premiums. It isn't going to make a lot of difference in my personal taxes and, as I have said before, I don't think I have another client who would have this situation. BUT..it bugs the heck out of me when we are told one thing and then are left hanging to try to figure out how to take advantage of what we have been told. And I admit I am getting to be crotchety! On that happy note I will say thank you once again. MM

I finally decided to start preparing my own income tax return yesterday though I am still waiting for one final 1099. AND I am back to trying to figure out just how to show the Medicare held out of my SS as a deduction on my Form SE. Are we supposed to include it on the 1040, Line 29, which is then deducted from the Sch C net? In that case, we are getting the deduction against Self Employed taxes and Total Income. I went back and re-read my earlier question and the help given, the agreement is that we get to take this deduction but nowhere can I find the exact place to show it. The IRS site that was mentioned isn't there any more and nothing else that I read answered my question. As always, my thanks in advance. Hope this isn't a precursor of what I will run into for the next couple of months. MM

A friend (who used to work at the IRS) asked my opinion about this today. A gentleman who used to be a CPA, but has been retired for a few years, has agreed to do someone's taxes. He intends to charge for and sign the return. Then he saw that he would need to pay the $64+ to be a paid preparer. He doesn't want to do that. The question is: Does he really need to have a PTIN if he isn't E-filing? I told my friend I would put this out for your discussion. And I thank you in advance. MM

I can't compete in the kids pictures--loved them, though, and I have a very good looking 19 yr. old grandson--but I was wondering how ERC is doing in the frozen state of Maine. I survived two winters in Caribou and the storm in '78 that paralyzed Massachusetts. Very happy to be in sunny though chilly FL. I, too, played 18 holes of golf today. MM

Yes, my children's father was my husband. I wasn't sure if the stepped up basis on his half of the stocks would still apply. It is a real pain working this out because some is electric co. stock and the dividends were not taxable-up to $1500-for several years. I made sure to not sell those over the years. And then, of course, the stock split. As my husband passed away in Dec. 2009 I will happily go back and give half of the no basis shares FMV on date of death, plus the other dividends that had been reinvested and the later stock buy. Sure am glad I have no tax clients yet. I always file my return first and I don't even have all the necessary info plus my EFIN file is stuck somewhere in never-never land so I can't e-file anyway. Such fun this year. Again, my thanks for all the help. MM

My thanks for backing up my thoughts. I have always been able to argue myself into the wrong decision, nice to know I didn't do that this time. MM

Yes, estate planning was what started this. The instructor in the tax class I took in Dec. mentioned then that stepped up basis had expired. I have stock that I bought back in the 80s that my children will inherit and I assumed--terrible thing to do, I know--they would get the stepped up basis. I don't plan to die in the near future but decided I had better make lists of what the kids will inherit. Their father and I never discussed any of this and, after he passed away in 2009, I kept telling everybody it was a good thing he died first because he wouldn't have been able to figure out any of this because I was the one who handled everything financial and he didn't want to hear about it. I don't want the kids and grandkids to try to figure out or even find original documents, etc., so I am getting everything together in one place. Thanks for the help. Guess I will slog along and do what I can to make it easier. MM

Thank you both. I gather that no one knows what or how basis will be decided in the future as the info only refers to deaths after 12/31/2009 and by 12/31/2010. MM

I am under the impression that for inherited stock the basis is no longer figured from Date of Death but is the owner's original basis. I haven't been able to find anything that says yea or nay. What a pain if this is so. I truly appreciate any help. Many thanks. MM

I am glad you put this in because I had been wondering how your daughter is doing. I don't blame you for bragging. She is doing a wonderful job, just don't let her burn out. I was exhausted just reading about her school load. Congratulations to both of you. MM

Daughter and her husband own a house in one state that is now a rental. They own the house they are living in in another state. They refinanced the mortgage on his mother's house, it is now in their names and they pay the mortgage and property taxes. His mother still lives in the house but does not contribute to the mortgage or property taxes. My understanding is that they can take the mortgage interest and property taxes on their residence and the house his mother lives in. Obviously the expenses of the rental are taken against the rental. Daughter wanted to know if there is any reason they can't take the mortgage interest and taxes since they don't live in the house at any time. It actually isn't too far away from their residence. I said I didn't think there is but I would ask all of you for your opinions. As always, thanks. MM

I am assuming he will receive 1099's from each agent who hired and paid him. He also has worked for a couple of major companies, I think. As far as I know no taxes or SS have been withheld. He hasn't received any paperwork, yet, so I am guessing. Being a "good" grandmother, I made him start keeping mileage and expense records right away--have to keep this income from mixing with his lawn mowing business. He brought me a bunch of receipts, etc. last fall so I could decide how much ES he should pay. I gave all that back to him and told him how to arrange a written page that lists all that stuff as it happened. He groused but has done it. I don't know what all he will be involved in this year but I do know he has 3 weeks as a Gecko for Geico during spring break and 15 Nascar events. His parents have encouraged him to not take college classes this spring and just enjoy all these new events. Thanks for any and all suggestions. MM

My 19 yr. old grandson has gotten involved in "modeling" which has turned into going to various sporting events, wearing clothing with advertising, explaining why people should buy the product, etc. Plus he also does set up and break downs at some events. I am beginning to wonder if he is itinerant in which case he wouldn't be able to take his expenses while traveling. The jobs are frequently gotten for him by different agencies which pay him per job. Sometimes transportation is paid, other times not. My personal feeling is that all expenses involved in going to and staying at each location is deductible but I just wanted to have some back up thoughts. As always, I appreciate any help. Many thanks. MM

Ah, but the update for the TAX Book says otherwise. I have read pro and con and searched for a definitive answer and I still don't know the answer. The confusion exists and, if medicare premiums can be used--and, quite frankly, I can't think of a client this would even apply to except me--then I should be able to use them. MM