kcjenkins

See, that is exactly where I have the problem, Pacun. If they had itemized, and they took the losses on Sch A, then they would have had $2000 on line 21, and then $900 on Sch A, and they would have arrived at $1100 taxable. I have no problem with that. BUT, since they did NOT itemize, how did the court justify letting them claim those $900 of losses as an offset to the $2000 win? The court made a big deal about not allowing the losses FROM THE DAYS WITH NO WINS but still counted the $900 from the day they won the $2000. EVEN THO THEY DID NOT ITEMIZE. And the code is clear that you can only take the losses as itemized deductions.

See, that is exactly where I have the problem, Pacun. If they had itemized, and they took the losses on Sch A, then they would have had $2000 on line 21, and then $900 on Sch A, and they would have arrived at $1100 taxable. I have no problem with that. BUT, since they did NOT itemize, how did the court justify letting them claim those $900 of losses as an offset to the $2000 win? The court made a big deal about not allowing the losses FROM THE DAYS WITH NO WINS but still counted the $900 from the day they won the $2000. EVEN THO THEY DID NOT ITEMIZE. And the code is clear that you can only take the losses as itemized deductions.

Go to the W-2 form, right-click on it, and it should show you a menu that has the version you have at the bottom of the menu. Should be version = 44

Sorry, Don, but I can't go with that one at all. If I follow your logic to it's conclusion, you would wipe out the entire amount of taxable income with those losses that the court ruled were not allowed. Also, any time you do not report the ENTIRE about of the W-2G's on line 21, you are going to have to deal with the IRS. And they will tell you that, no, you should not have netted line 21, you should have put all the W-2G income on line 21 then put the allowable losses on Sch A. I wish you were right. I'd like for you to be right. But I can not read it that way no matter how hard I try. And Jainen, that is where I have a problem with your position. I'd love for you to be right, but I just do not see it working. If you read the code, and if you read the instructions behind both Line 21 and Sch A [for gambling] it just does not work the way this ruling did it. Logically, if they did not itemize, they should not have been allowed to take the losses, and would have had to pay tax on the entire amount of the W-2G. In fact, I could find you a number of excellent tax professionals who would argue that. based on the code, what belongs on Line 21 is ALL the winnings of every winning bet, not just the ones that get a W-2G.

Right now I am updating at least 4 times a day.

Taxbilly, I am going to leave it here because everyone can read it here, and few would bother to look at it in the TRX forum if they do not use TRX software now. And he's asking for beta testers for this program, which is not the tax program.

I just efiled my first, also. Will be interesting to see how long it takes IRS to get up to speed. I've never known them not to have some 'teething problems' at the start.

Sounds like they are trying to get ready for the IRS eliminating the RAL program, something they keep talking about doing.

THANKS, KEN

About time you showed up!!! Glad you made it, finally.

I'm surprised that the state has not already sent them a bill for at least the 2007 year!

It's actually very easy to add a statement in ATX. If you want to link it to a specific form, such as your state form, go to the form and to the line in question. Go up to the top of the page, go to Forms, and click on it to get the pull-down menu. Near the bottom, you will see Lists. That will give you a choice of creating either an itemized list, a text list, or a statement. Either one can then be linked to that line. I'd use the Statement for this one, and Name it to reflect the line number it explains.

Please note that the IRS originally said that they had $2000 of unreported income, which in fact, they did. The fact that they allowed the netting here, while agreeing that they were not allowed to change to itemized deductions, is not actually logical at all. Still based on page 6, They did allow it to be netted to Line 21, which if that is allowed, would, in fact, eliminate the need for any entry on Sch A. Because if you have already netted the winnings and losses on line 21, there would then be no other deductible losses to go to Sch A, unless they were allowed to double-dip, which I do not think was what they meant. The ruling seems to have just decided to ignore the law that says the losses can ONLY be taken as itemized deductions, and decided to allow them to take them on Line 21 by netting them. But I really do not think that would be something that could stand up in every tax court, because it is contradictory to the actual law, which says the winnings [not the net winnings] goes on line 21 and the losses on Sch A. This is not a decision I'd rely on in any other circuit.

Tom, I believe since they have filed payroll and sales tax reports, you have little choice but to file the 07, 08, and 09 returns. And the expenses that they paid personally could be reimbursed, or could be treated as capital contributions or as shareholder loans. Remember, the extra costs that this incurs for them is NOT YOUR FAULT, IT'S THE LAW, and any penalties for not filing, and/or filing late, are THEIR FAULT, NOT YOURS. Your job now is to get them straight in spite of THEIR ERRORS.

Just in case you have not updated recently. :rolleyes:

You only need the 1310 if there is a refund due, and the person claiming the refund fits one of the categories in Part 1 of the form. If there is no surviving spouse, and there is a refund, you will need it. It's pretty self-explanatory tho, so you should have no trouble with it.

Go to MyATX and look on the left side of the screen for the "Suggestion Box". That is what I sometimes use to report a bug. Although the E-Mail Customer Service usually works just fine.

And you could also consider having it delivered to a friend's home or business, if the address is the only problem.

No, you do not net the amount on line 21. On line 21 you report all the winnings, and then on Sch A you report all the losses that relate to the winnings. For example, say the client went to the casino 5 times in 2009. Each time he took $500 to gamble with. On trip 1, 3 and 4 he went home broke. That $1500 is NOT DEDUCTIBLE at all. On trip 2 he won $5000, but continued to gamble until he was down to $2000, then went home. On trip 5 he won $2000 but continued to gamble and went home with only $500. His line 21 would show the total winnings of $7000. His schedule A losses would be $1000 [original stake on both days] plus the losses those two days, $3000 and $1500. For a total of $5500. So although his total net gambling winnings was $7000 won less $7000 lost, his TAXABLE net was $7000 won less $5500 lost, for a net taxable gain of $1500.

So the reason you give is that they did not realize that they had to file the 2553, or they thought that the attorney did it, or that it was automatic, etc, but always intended to be an S corp and operated as if they were an S corp, etc. How did they form the business? Did they consult an attorney or did they buy the idea that LegalZoom or such would do all that was needed? [she says sarcastically.]

No, Jake, you can not, under the new rules, claim the losses from the days that had no gains. Read the ruling again.

In my experience, the single member office or small two or three person office has to be good or they don't make it. While the franchise can rely on national advertising to bring in business regardless of the quality of the employees, the small operation has to deliver good, competent service to survive for long.

Why would you want to use the selling price as basis when you know that the current price will be much less than it's FMV at the DOD? That loss is still of some value after all.

Or you can just 'cut and paste' to your wordpad or notepad. Or word processing program.

Terry, be careful here, because the term 'guaranteed payments to partners' has a special meaning in partnership tax law, and loan repayments are not "guaranteed payments". Now, as you say, the LLC is taxed as a partnership, so the payments to the son for his work would be guaranteed payments, and thus subject to SE tax. But the loss from the business would also go to the SE form, so it will offset some or all of the guaranteed payments.