rfassett

He can't. The proper reporting would be what actually happened. He leased a truck from his friend. Your client can take lease payment deductions and maintenance, fuel, etc. Your client should issue a 1099 for the lease payments to his friend. The friend will have to pick up the lease payments as income and he can take depreciation against that income. The sales documents that you mention should probably be redone to reflect current value because when the sale actually takes place, the friend could have a recapture issue. Curious, does the friend understand the legal exposure he has accepted? He must be a really GOOD friend.

Nope - but I thought it might be because I have the total tax and accounting package.

Hi Catherine, My wife is the reader in our household. (She, in fact, runs the annual used book sale for our local library and has for several years. I tell her that she would go through serious withdrawal if they ever take the project away from her. It is like her annual "fix" - as is it for most of the shoppers as well, I have come to realize. It is quite the experience watching these people shop. Some will come back five, six, seven times during the three day sale.) Anyway, I bought her a Kindle a couple of years ago and was not sure how she would adapt to not turning a page every few seconds (she reads alot ). She loves her Kindle. She has not given up "real" books. But she does love the Kindle. I think if you go to Amazon's website they will give you a good idea of what is available - and at what price. My wife does not have a problem finding something to read. She likes the Kindle especially at night when her eyes are tired. It is back lit, and she can adjust the font size. And I guess if you are real tired, or busy, it will read to you to. But I have not seen her use that feature.

I believe there are only two things that will affect the "taxable amount". First would be a rollover of a portion of the distribution. And we all know that has to be done within 60-days of the distribution. Second is any non-deductible contributions that may have been made. The box being checked "taxable amount not determined" simply means the custodian could not determine if there had been any previouly taxed contributions. I don't think the IRS looking at the 1099 transcript will set off any bells because the 1099 is telling them that it is up to the taxpayer to determine the taxable amount. If there is ever a question, ie audit, however, the taxpayer better be able to prove that he had made non-deductible contributions. And those really should have been reported on the 8606.

Yes - and scarry too.

Yes, I have efiled several negative AGI tax returns. Sorry I was not more clear in my first response. Negative AGI is becoming more and more common with this economy, or lack thereof, that we are in.

Not in my experience.

That is dangerous thinking, partner. If it is a calendar year corp, it is delinquent anyway, so make the client give you the info. I always look at the threshholds as a benefit to the IRS - not to me. They (the IRS) are going to expect it to be tied out on audit - or the auditor will tie it out himself, and you know where that can go. Anyway, those are just my thoughts. I have had clients do the same thing you describe. But by the time I get finished with them, the following year they are asking ME what I need to be able to tie it out.

The depreciation is credited to accumulated depreciation - a contra-asset account and debited to depreciation expense - an income statement account. The income or loss on the income statement closes to retained earnings on the balance sheet. building 400,000 accumulated depreciatation 15,000 mortgage payable 300,000 equity 100,000 retained earnings (deficit) 15,000

Really? We have to celebrate vicariously? I was still holding out for an invite - even at this late date. :(

I would add my best wishes! And a prayer. Most gracious God of all creation, please watch over the the young Lion and his new wife as they start this new chapter of their lives. Help them, Father, to turn to You, not just in times of trouble, but when their faith is tested the most - when times are good. It is my prayer, O God, that they would walk with You every step of this journey. Guide and protect I ask! In Jesus' name. Amen!

At the minimun, I would collapse those two entries into one. As an outsider looking in, I would read that as the City having received $55,000. They did not receive the cash, they simply signed a note. I should preface this by stating that I am not a fund accountant, but I think the entry should not be to cash, but to Checking - General Fund, or, my preference would actually be Checking - Capital Projects. The fact of the matter, I would think you would need to know what the Capital Projects fund is used for. Is it just streets and sidewalks, etc, or does it include rolling stock. So given that we do not know that, I would default to Checking - Capital Projects for a $75,000 asset purchase. And I would also capitalize the asset and depreciate it over its useful life. There, now that I have fully disclosed my ignorance of "fund accounting", I will tell you that I came about my CPA tag in a similiar manner. My undergrad work was not in English and History, but it was not in accounting either. I got my Masters degree through the Taxation side after taking a couple of upper level undergrad accounting classes - none were fund accounting however.

This is what I get when I click on the link: "Note: This product will be posted here soon. Products are generally posted overnight after each workday. Please check back to see when this product will be posted." I guess they found something in the form that was not to their liking.

I believe the drain times to which you refer are for 1040's. The business returns drain more frequently: "Ogden 1065 Transmitted automatically when 100 e-files received, or at 3:45 PM and 11:45 PM CST, if sooner Every 2 hours Ogden 1120 Transmitted automatically when 10 e-files received, or at 4:00 PM EST, if sooner Every 2 hours" The business return efile system is different from the 1040. I efiled three corps and one partnership after 11:30 EST today and have already received the acks for the corps and am waiting on the 1065.

Lots of assets survive bankruptcy. And this IS an asset in the hands of the shareholder. It could very well have been that the shareholder did everything legitimately on the bankruptcy filing and used a "wild card" exemption (if available in his/her district) to exempt the stock of the corp as well as the loan. My comments have been made on the assumption that this is a chapter 7 bankruptcy. The answer may be somewhat different if it was a different type bankruptcy.

There would be no journal entry. You are talking about two separate entities - the shareholder and his/her personal life; and the corporation. Unless the shareholder tells the corp and/or the other shareholder or you, even though it is public info, you would probably not even be aware that the bankruptcy was filed - unless the bankruptcy trustee had petitioned the corporation to pay the money due the shareholder to the bankruptcy court so it could be distributed to the shareholder's creditors. The corp owed the shareholder money before the bankruptcy and the corp owed the shareholder money after the bankruptcy. No journal entry. Now that said, I think another question would be, from the shareholder perspective outside of the corp, how does the bankruptcy affect the shareholder's basis?

My general policy is "payment must be made before return is released". Reality is that some returns are released before payment is received but not efiled until payment is made. The fact of the matter is that I am signing the return as a paid preparer. If I do not get paid, I do not file the return. Again, that is the general policy. And it seems that every time that I am persuaded to ignore that policy, I get burned in some manner. Case in point, I have a second year client that I was persuaded to efile the return before I was paid this year. Last year, I explained the policy to the client who still called 3 weeks after signing the 8879 to inquire about his refund. I told him the return had not yet been efiled because I had not been paid. His response was that he was sorry, did not understand the rules, and would send payment immediately - which he did. This year, in the heat of the battle, that return got efiled before I received payment. That return was efiled in March. I have still not been paid, despite my efforts. Normally, I would send the client a letter with a copy of a letter that will be sent to the IRS in ten days. The IRS letter states that I want to have my name removed as "paid preparer". I explain in the client's letter that I am not sure what sort of consequences will result from that action (and I drop in words like "audit" and "deeper scruitiny" and the like). This usually gets the payment in the mail before the ten days has expired. Only once have I had to send the letter to the IRS - and that particular return and client had some other issues from which I wanted to wash my hands. I can not strong arm the current situation because the guy is the adult son of a very good paying monthly client. So the only thing of which I am certain, is that if he comes back next year, he will prepay the return. I have offered "fee collect" for a couple of years. I have only had two takers.

I just now transmitted a return and received acknowledgements. Can not login to the support site, but efile seems to be working.

Thanks Gailtaxed. I looked for the email I received but could not locate it. My recollection is that it was not a normal email, in the sense that it did not go to my ATX folder via Outlook rules, and I initially deleted the message and then had an after thought that something in the header rang a bell. So I went back and read it. I guess I remembered the move, but not the details about the efiling and support site. Thanks for the correction. At any rate, I guess they lied. I tried late last evening and again just now and can not access myatx.com. I will not hold it against them, though, so long as it is up and running by sometime Monday. I have moved enough times myself to know that there is no move that does not have its share of challenges. And a move of this magnitude will certainly have its own. I wish all of the ATX and Tax Wise folks a successful and speedy relocation. I moved my office about ten years ago. We shut down at noon on Friday and were open for business as usual by the opening bell on Monday with everything being in its rightful place, all technological equipment moved, reconnected, and tested, and coffee in the coffee pot. That is truly a weekend that I do not want to relive.

Is this the move weekend? If so, I believe they were shutting down at noon today and we opening at 10 on Monday. I think the email indicated that the shutdown would affect efiling.

Communication is paramount to the success of your practice. I email most of my clients on a weekly basis in an effort to keep them apprised abbout tax changes. The other thing I have done - I have been telling anybody that would listen, that taxes are going up. Most of our clients do not care about the nuances in detail, they just want the bottom line. I point to all of the money the government is spending - federal, state and local - and say, "where do you suppose that money comes from?" Bottom line, I keep my clients informed on an on-going basis. Yes there will be some unhappy campers - those who chose to not listen - but none of them will be able to say that they were not told. Because, as a last ditch effort, we recap the year's changes in a letter that goes out to each tax return client with the organizer.

I have not heard lately any exact times but I know it is taking a very long time for some of them. I did a 2008 amended return for a client to claim the credit and included all of the docs. After resending and/or faxing for the second time, I got the Taxpayer's Advocate Group involved. We did the amended return in early June 2009. Taxpayer received the full credit in June 2010. The girl at the office that is handling the FTHC for the TAG told me that this is far and away their most popular issue - and she did not see things slowing down anytime soon. Tell your client to not plan on buying Christmas presents with that money. But on the other hand, I filed one for a client this filing season, again all docs enclosed, and he had his refund within the normal refund period plus one week. So go figure.

You have to follow the lines, or the trail, if you will. You have a couple of transactions going on here. Brother owns the property and is receiving rent from the first owner (the seller). Rent would be equal to whatever the first is paying on behalf of the new owner. So new owner has a schedule E on this property. Old owner has turned around and sublet the building. He also has a Schedule E on this property. He does not, however, have mortgage interest expense. That belongs to his brother.

I guess I mis-interpreted the question. Since the question was asked on a tax board, I assumed the question was "could the costs be deductible for tax purposes". You are, of course, correct jainen, there is no limits as to what a corp can deduct for book purposes so long as the officers and/or shareholders approve. Not sure I agree, however, that payment for an employee's relative's funeral expenses could be a taxable fringe benefit. I guess we need to know how close the relationship line runs.

I concur with Margaret. Unless it is an ordinary and necessary expense for that business, it would not be deductible unless it was run through as compensation to the employee. And funeral costs would go way past any diminus rules for business gifts. The only way I would imagine it could work is to write a check to a charitable organization (such as a church) and then if that organization saw fit to pay the funeral expenses that would be nice, but the charitable organization would not be under any compulsion to do so. That might be the most logical. If it is run through as additional compensation for the employee, there would be payroll taxes and worker's comp expenses also.