kcjenkins

Tax Warehouse?

Yes, I think you are being too strict. ALL education improves your future options, but that is not how you measure it. Read the decision again. The point is that an MBA is not, in your case, a requirement to move into a new job, it gives him skills he's using in his current job. The fact that other employees in the same job have them just supports his taking the deduction. I'd take it, without any problem.

Eli, lots of women claim HOH while letting the other parent claim the child as a dependent, using the 8332. That is not the problem. The problem is the idea that they could use the argument that they were maintaining truly separate households. The link is to advice where two people merely share a space, but not a bedroom. Yet the case here, the two people have kids together. NO WAY is that going to fly.

And I'll add my voice to Jainen's on that piece of advice. I seriously doubt that you'll find a reputable attorney that will say yes, but if they do, then at least it will be HIS professional liability on the line, not yours.

Bull____.

Absolutely. Just mark all the returns you want to print, then click on the return drop menu and select extensions. Even tho I efiled them, I did all my extentions that way, first, printing them to my pdffactory printer, instead of the regular one. That let me add the forms automatically to all of them, and let me save an easy copy of them to a single pdf file.

Come on Jainen, if you ask the client "Do you want to use the same bank account for your direct deposit? and they say "Yes." and then LATER, they say, "Opps, just remembered...." that is THEIR fault. There is a limit to how much babysitting we should be expected to do, IMHO.

They do tend to take a little longer, as they do not drain the 7004s as often as the 1040s. But we should get a bunch of acks on Monday. If it does not go through by noon, Monday, then you can mail them.

LLC Law Monitor My link Posted at 4:36 PM on March 8, 2010 by Doug Batey The IRS Again Loses in Attempt to Limit the Deductibility of LLC Losses The Tax Court has again ruled against the Internal Revenue Service in a case on the deductibility of a member’s LLC losses. Newell v. Commissioner, T.C.M. 2010-23 (Feb. 16, 2010). Last year I wrote about the three prior cases, here My link . In these cases the IRS has taken the position that its regulations require a presumption that LLC losses are “passive activity losses” (passive losses). Under the regulations this presumption is difficult to overturn, so in many cases LLC losses are treated as passive losses. And for most taxpayers, passive losses are far less useful than active losses (losses not resulting from passive activities). Taxpayers generally prefer to use losses to offset taxable income, but passive losses can only be used to offset income from other passive activities, and not against income such as wages, interest, and dividends. The Tax Court ruling in Newell is consistent with the prior cases in its interpretation of the IRS’s regulations. The regulations create a presumption that losses incurred by a limited partner in a limited partnership are passive losses, and make it difficult to overcome the presumption. The IRS has taken the position that a member of an LLC should be treated like a limited partner of a limited partnership for purposes of the regulation. The courts, including the Tax Court last month in Newell, have rejected the IRS’s argument. This latest case should give additional comfort to LLC members, that they should be able to use LLC losses to offset “active” income such as wages. LLC members will still need to demonstrate that they materially participate in the LLC’s management, but they will be able to use the more flexible rules of the IRS’s regulations, without the need to overcome the presumption against material participation. The IRS could of course change these regulations to explicitly treat LLCs in the same way that limited partnerships are treated. Because LLCs are relatively new, the IRS may still be trying to figure out how to deal with them while limiting the potential for abuse.

:lol:

My link

My link Political, but funny, I think. Then there is this, a good example of why many people do not like lawyers. My link

Yes, some states do allow deductions for them, but the Feds don't. It's still a good way to build up a college plan, if you start early. I expect the majority of them are set up by grandparents, from my experience.

The point is that the GP increases the loss or reduces the profit that is then split. For example: Partnership AB takes in $5000, and has expenses of $3000. IF no GP, each of them gets net profit of $1000. If A got GP of $1000, and B got nothing, then the net profit is $1000, [5000 -3000 -1000], so A gets GP of $1000 plus profit of $500, and B gets profit of $500. If A got GP of $1500, and B got GP of $1000, then the net loss is $500, [5000 -3000 -2500], so A gets GP of $1500 plus loss of $250, and B gets GP of $1000 plus loss of $250.

Well, I've been married to a Lark for almost 47 years, so I've gotten used to it a bit. And he's gotten used to me being a true Owl. When we both worked, it actually was an advantage, since he would take the Lark clients who wanted early appointments, and I'd take the ones who needed or wanted to come late. I think the latest I ever kept a client in front of my desk was 2am. But it was his fault, since he waited around to bring his stuff, then needed it in a hurry. Back in those days, I still let clients do that sort of thing to me. Now, I don't. But I did add on a couple of extra hundred to his bill, so I felt better about it. And he was just happy that I got him done in time for him to make his court date!

Well, just to be accurate, she did not successfully convince the IRS to allow her MBA expense deduction, she convinced the Tax Court. That said, this does not really cover new ground, it just upholds and perhaps clarifies a bit the prior rulings. The most valuable part, IMHO, is this section: "Respondent [iRS] contends that the MBA/HCM does qualify petitioner for a new trade or business, because in respondent’s words, under the regulation “the tasks and activities she was qualified for before she obtained the degree are different than those which she is qualified to perform afterwards”. We disagree. An MBA degree is different from a degree that serves as foundational qualification to attain a professional license. For instance, this Court had denied deductions for law school expenses, because a law degree qualifies a taxpayer for the new trade or business of being a lawyer. See, e.g., Bodley v. Commissioner, supra; Weiler v. Commissioner, 54 T.C. 398, 401-402 (1970). An MBA is a more general course of study that does not lead to a professional license or certification. Allemeier v. Commissioner, T.C. Memo. 2005-207. This Court has had differing outcomes when deciding whether a taxpayer may deduct education expenses related to pursing an MBA, depending on the facts and circumstances of each case. The decisive factor generally is whether the taxpayer was already established in their trade or business." I think that is the key thing for you to explain to your client. Each case is somewhat different, of course, but understanding what the basis of the differing outcomes from cases that seem similar on first glance will help you to make the call.

OK, I see what you mean. Usually I don't bother with that, just scan a copy of anything I used to pull the numbers from.

No, it's treated the same regardless if some was used for tuition. And 529 contributions were after-tax, not before-tax. No deduction for making them, just the income sheltered. Since he lost money, there is not taxable income to pay tax on, and the loss from basis is a Sch A item, by law.

Me too. I can easily work until 4 in the morning, but even if I go to bed at 10pm, it's hard for me to get up before 8, 9 is much better. I'd sleep until 10 every day, if I had the choice. Don't mind putting in a 10 or 12 hour day, it's just getting up early I object to.

Some of us are Larks [wake up early, like to work in early morning before it gets busy] and some of us are Owls [like to sleep late and work late, after the people go away]. Us Owls just run on a different schedule than you Larks, but we still all work more hours than the law allows. If we did not, we'd never get so darned much work done in such a short 'season'.

It is actually entirely possible that the 2553 was mailed in and then lost by either the PO or the IRS. These things do happen. Given the fact that the return was filed, there was no questionable advantage, given that there was no loss to be passed through, I think the late approval is an almost certain thing. I'd say it was a slam dunk, except that with the IRS nothing is ever certain.

So the taxable amount would be $3,009.

I'm probably going to stay with ATX. If not, I'll go with Drake over anything TRX is selling. I don't think they were totally honest with us last year, so I'm leery of doing business with them next year.

Well Pub 950 would be a starting place. Basically, anything she inherited is tax free to her, as of DOD, but any income or interest earned between the DOD and the date she gets it is taxable. So if, for example, she inherited jewelry, that's not taxable, but she should get it appraised, so that when she sells it or gifts it to someone, she knows what her basis is. If she inherited cash in the form of a 1 yr CD, that matures in 6 months, the interest it has earned at DOD is part of her basis, but the interest it earns for the next six months is income when she cashs it. If she inherited a farm, the farm is tax free, but if there are crops growing on it, the sale of those crops will be taxable income to her. Determining her basis in the crops might be a bit tricky.

Just be sure and take your laptop or netbook, so the wait time is not a total waste.