kcjenkins

Yes, it basically takes almost all the problems out. The program does the advertising, rents the condo, collects the payment, and sends them a monthly accounting and payment of the income less expenses. If it's in FL, might be a viable alternative. It's at least worth a phone call to find out their options.

You force the appropriate section I, II or III. Then you fill in section IV in the blue lines. It's either Part I, Part II or Part III, if it was business property. In this case, "Force" simply means you are telling it which kind of business property.

Pink means an override, so you need to go back and look at the form to see where it wants you to put your input, may be you need to click on the line and there is an underlying worksheet where you will find a blue input field. Anything put on a white line is a mistake, because a white line means the data feeds to it from somewhere else. Only blue lines accept input without problems.

I expect that the real problem holding this up was the late changes in the code, which we all knew where coming, but no one knew until late Dec just what they would be. And then the programmers were busy working on the tax program itself, knowing that that was more important at the start of the season. I'm sure we'll get the Planner updated soon. Let's not expect miracles, there were lots of changes, and many of them while similar to a 'roll-back' to last year, did not, in fact, roll everything back, exactly. Cut them a little slack, the IRS is not yet up-to-date either.

No the original contribution is not taxable, only the earnings are taxable. If there were no earnings, or even a loss, then there is no taxable amount in box 2, which is the box that you put on line 21. And if there is a loss, they may even have a deduction, although it's a Sch A deduction and seldom worth the trouble, in my experience.

John, usually if they keep a log after the 'big win' it is enough, because usually they lose it all back pretty fast. At least that has been my experience, both as a tax pro and as an occasional casino visitor. :wub:

Box 1 is just the total distribution, box 2 is the taxable portion. If just recovering their contributions, it's not taxable, in fact if it is for less than the original contributions, they may have a deductible loss. Nontaxable distributions from CESAs and QTPs, including rollovers, are not required to be reported on your income tax return. See Pub. 970 for more information.

Yeah, and we always feel silly when we try to force it do something, only to realize later that the program would have done it for us with much less effort! Those of us who started out doing returns by hand with just a ten-key are the most prone to that, I expect.

Sounds like by using it personally, they converted it into a 'second residence' so no loss. UNLESS they try to rent it out for a while now, converting it into business property. I'd be inclined to go that way if the loss is substantial, but if they can get most of it out by selling, might not be worth the trouble of renting. As this is a condo, might look into whether the condo assoc has a rental program they could put it into, as that would make it business property with the least amount of personal effort from them.

Why are you using the 'back' button instead of clicking on the 'General Chat' at the bottom of the page?

A businessman tells his friend that his company is looking for a new accountant. His friend asks, "Didn't your company hire a new accountant a few weeks ago?" The businessman replies, "That's the accountant we're looking for."

You need to force the 4797 [Line 15 of the Disposition of Asset worksheet] and then go to Part IV and enter the recapture info.

Q: What's the definition of an accountant? A: Someone who solves a problem you didn't know you had in a way you don't understand. Q: What's an actuary? A: An accountant without the sense of humor. Q: Why do some accountants decide to become actuaries? A: They find bookkeeping too exciting. Q: What do actuaries do to liven up their office party? A: Invite an accountant. Q: What's an auditor? A: Someone who arrives after the battle and bayonets all the wounded. Q: What's the definition of a good tax accountant? A: Someone who has a tax loophole named after him. Q: What's an extroverted accountant? A: One who looks at your shoes while he's talking to you instead of his own. Q: Why did the auditor cross the road? A: Because he looked in the file and that's what they did last year. Q: How do you drive an accountant completely insane? A: Tie him to a chair, stand in front of him and fold up a road map the wrong way. Q: What do accountants suffer from that ordinary people don't? A: Depreciation. Q: What does an accountant use for birth control? A: His/her personality. Q: What's an accountant's idea of trashing his/her hotel room? A: Refusing to fill out the guest comment card. Q: When does a person decide to become an accountant? A: When he realizes he doesn't have the charisma to succeed as an undertaker. Q: There are three kinds of accountants in the world. A: Those who can count and those who can't. Q: What's a shy and retiring accountant? A: An accountant who is half a million shy and that's why he is retiring.

True for personal property, but not for res rental property. Look at Pub 946, the Section on Sale or other Disposition before the recovery period ends.

Well, probably the most common 'cheat' is for someone who lives with her boyfriend and has a kid or two from a prior relationship and does not work, but comes in and says she 'cleans houses for individuals' and just happens to make just the right amount to maximize EITC. Of course, no 1099s because it's from individuals who do not deduct it. And no expenses except a small amount of car expense, but, since they did not keep records, won't be claiming that. She files HOH, does not claim the kids, the father claims them, but she still gets max EITC and even a bit of SS coverage, and a very nice check from Uncle Sammy. She uses a PO Box, of course. I don't do these, but every year I see a number of them who walk in looking to get their return done.

I'd say the answer depends on those things you threw up. IF it is investment property, then yes, he could take the loss. If it was used as personal, [just being there to work on it is not personal use] then you have to look at the percentages to determine if it could be mixed-use property. Usually, in a situation such as you describe, it would be treated as investment property, but it does depend on use pattern.

Sure, glad to help.

Tom, if the 'prize' comes from Avon or an Avon subsidiary, it would go on the Sch C, not line 21. The fact that there is box 7 income on the SAME 1099 tells me it's not Spiff.

http://tinyurl.com/4dspkdh This is something we are all aware of. But I did not realize it was this bad.

http://www.irs.gov/businesses/partnerships/article/0,,id=134696,00.html http://www.lisc.org/docs/events/cham2005/downloads/Year_15_handout_5.pdf http://www.pgdc.com/pgdc/story/rev-rul-75-194 Hope these links help.

True Spiff is not subject to SE tax, but this does not sound like spiff to me. Spiff is a sales incentive paid by an outside company, not the employer, and it is the lack of any direct connection between payer and payee that makes it exempt, basically. In this case, the 'prizes' were not shown in the box for prizes because they are directly tied to the performance of the worker. You could argue that they could have been shown in box 7, but, probably for internal accounting reasons, they were separated from the ordinary income, but still subject to SE tax. You are right, and the prior preparer was wrong, to put them on Line 21. The only prizes that go on Line 21 are those that have no relationship to the work of the taxpayer. Otherwise, whether it is called a prize, a bonus, a Christmas bonus, etc, it is still 'compensation' and subject to SE tax when it is paid because of the working relationship between payer and payee.

My link

I especially like the last line of this one. So true.

First, to your question about documentation, I don't think you have to see the statements, but I would require them to sign a statement to you that they do, in fact, have support for the losses they are claiming. Proof of losses from casinos is getting easier with the systems the casinos use these days, but it still requires the t/p to support how much, and when. It is often the case that after a big win a client keeps better records because they know they will need them. Ask to see them if that is what you need to be comfortable, just keep in mind that a big win commonly does lead to big losses after that, as they try to 'do it again'. Human nature being what it is.

This is a protection against automatically generated spam messages. Which we had a spate of last year. It does not mean you have to wait between EVERY post, I think you can post three before it is triggered. But normally it should not bother anyone, and if it does, I'm sorry, but when the board was attacked with a myriad of spam messages, this was a necessary protective step.