kcjenkins

If the life tenant has the right to sell, and to keep all the proceeds of the sale, then he/she pays the taxes, as the 'remaindermen' get nothing, so owe nothing. If the sale proceeds are split between the life estate holder and the remaindermen, then the gain is split between them, also, in the same percentages. It all depends on how this was set up, and that's why in cases like this, it is best to check with the attorney who set up the life estate, or at a bare minimum, READ THE PAPERWORK YOURSELF. Do not just take the word of the client, because even if they are trying to be totally honest, they often just do not understand the fine points that can make the difference.

While it is true that an individual who makes a loan as a personal action, and is not in the loan business, is not REQUIRED to issue the 1098, it is OK for them to do so. And if they were my clients I would prepare it, simply to make the loan seem more 'official' to the child, and also to make it clear to both sides exactly how much to report.

They will not start selling the 41 cent stamps until Monday.

The parents can do a wraparound loan to the child, who then pays them and they pay the mortgage. They give the child a 1098 Int for the interest he pays them, which they show as income. They then deduct the interest that they pay the bank. So they net out, except for the effect on their AGI from his interest, which should only affect medical and misc deductions for them. And he gets to deduct his interest. Alternatively, and better, in my option, he could get the loan from the bank, with his parents co-signing his loan. Same liability to the parents, but the loan is in the child's, or the child's business, name, building his credit, and also he is slightly more likely to make his payments timely, since it is between him and the bank. Kids do tend to assume that they can pay their parents last, or late, or skip a payment now and then, etc.

If any of you do buy the Forever stamps, DO NOT USE THEM. Store them for use only AFTER the rates go up. Otherwise there is no benefit from them. They only save you money if you use them after the rate has increased over the price you paid for them.

Extract from New Scientist, 12 August 2000, page 64 WE RECENTLY reported that Australians are so confused about the country's new goods and services tax (GST) that the Australian Tax Office has had to set up a helpline to answer their queries (22 July). For those who are still confused, reader Alistair Pike points out that they can try reading the actual GST Act, where all will become clear. Or will it? Here is a sample from chapter 4, part 4, subdivision 165 of the Act "For the purposes of making a declaration under this Subdivision, the Commissioner may: (a) treat a particular event that actually happened as not having happened; and ( treat a particular event that did not actually happen as having happened and, if appropriate, treat the event as: (i) having happened at a particular time; and (ii) having involved particular action by a particular entity; and © treat a particular event that actually happened as: (i) having happened at a time different from the time it actually happened; or (ii) having involved particular action by a particular entity (whether or not the event actually involved any action by that entity)." Perhaps, on reflection, the GST helpline need only carry a simple repeated message: "No worries, mate, we're making the rules up as we go along." http://www.newscientist.com/article/mg16722517.000.html

I for one am delighted to see you on here, Mel. Welcome !

De, are you saying that title does not transfer? In that case it is clearly not correct to deduct the cost of the car, since you are not donating anything but the use for a limited time, and that is not something you can donate unless you first recognize the rental income. I wonder if this is just one of those cases where the client is telling you what HE THINKS WAS DONE by the CPA, rather than what was actually done? Did you get to see the returns that had such deductions?

What they are overlooking is that since the SEP deduction was $10,701 they did not pay tax on that amount then, so they have to pay tax on that amount as well as the 'earnings' when they take it out. Maybe if you explain it that way they will understand it better.

Is he saying that they deduct the 'full cost' of the car, even though they are going to get it back, then do not recognize any income when they 'get it back'? I could see deducting the FRV of the car for the time it is 'donated', and adjusting the cost basis for that amount. But no way can they deduct the cost as a donation unless they turn around and record income when it is given back to them. And regardless, they could never deduct more than their COST, not the fair market value.

That was an interesting case, and the split decision sort of paralleled the thoughts of our group on the subject when it came up last year. While I might well have been in the losing side had I been on the court deciding this, it does make sense to treat it the way they did, given our 'innocent until convicted' legal system. It will not apply to many cases, but it is nice to have a cite in the cases where it does become an issue.

Yes, the timing was the real dumb marketing move, because it is going to cost them a lot of early renewals, as a lot of us who were 'cheerleaders' for the old ATX are now at least looking at other options, simply because we want to know more about the options, in case they pull other changes that are even less bearable. They have also changed the 'free CPE' for TTO users, by the way.

CCH does not think the small number of Community users is a big enough number to make any difference. Let's face it, they are correct, from a dollars and cents point of view. But while I think it was lousy marketing to kill the Community on the date they choose, that just shows that they are not that concerned about the 'base'. If they had kept it for just another month or two, even if they 'edited' out certain posters, they would have gotten a heck of a lot of 'early renewals' that they will not get now.

Sheri, you might want to just use the ATX billing invoice, and modify it to add a statement about the past-due nature of the bill in the blue box on the invoice. You can do that by typing the statement one time, 'copy' it to the clipboard by highlighting it and using <control>C, then, on each new bill as you go to it, go to the blue box and hit <ctrl>V. Or you can modify the billing invoice itself. But then you'd need to delete the statement on any 'new' bills you generate.

I do not think that 'leaving town' is any kind of resolution, Jainen. His obligation will follow him, and only get worse. I do agree that counseling is called for, but under the new bankruptcy laws, that is the first step before you can file. And it is done by a licensed councilor, not the attorney. So the attorney was actually giving very good advice, whether it ends up being filed or not. An obvious first alternative is to sell the house, since clearly they bought more house than they could afford, which is why they went for an ARM instead of a fixed rate mortgage. I hate those things, they cause more problems than almost any other issue. But when a couple is overspending like this one, [living off credit cards is automatically 'overspending'], they may be in too deep to get out without the help of the bankruptcy court.

And some employers may pay 'the difference' between the standard hourly rate the employee makes and the amount of 'jury duty' pay received. But unless your state requires it, it is optional whether they pay anything at all.

It's good to see you here, Wayne, and thanks for the good news on the program compatibility. Even if users change to another program for next year, they will still need to use the old ATX programs for many years for those folks who come in needing multiple years prepared.

Yes, set it up and make it for the total owed divided by no more than 50, so that it will pay out in at least 5 years. That allows for the interest they will keep charging. And make sure she knows that she has to keep her nose clean for that whole time.

That would be without any OIC.

I agree with Joan, this one is not a candidate for OIC at all. She owes way too little to even consider wasting time on doing an OIC. Let her pay the tax in installments, and warn her very clearly that is she tries that scam again, she is a VERY LIKELY CANIDATE for being charged CRIMINALLY. Although they do not do it often, they DO like to do it a few times each year, just as a warning and 'bad example' to others. And when they do, they like to use someone who has already been warned, and still did it again, so that the 'criminal' does not get much sympathy from the general population. She sounds like a prime candidate, should she do it again. In fact, since she did it in 07, for the 06 Tax year, she's not in the clear yet. So she better make her payments on time, and behave, or she could be in real trouble soon.

Well, the cost will be a factor that has more to do with the number of returns, clearly. Someone with 100 returns a year will clearly not be able to justify the cost par return, as cost savings, although they might as error reduction, perhaps. Many of us already have the needed scanner and adobe or other program, but that is a factor for anyone who does not have them, although they can be purchased for less than you might think. It will probably not be something that I buy, because our practice is fewer, larger $$$ complex returns, rather than high volume W-2 and 1099R returns. I'll probably look at it, tho, because I already have the Adobe and the twain-compliant scanner, and less eyestrain could be worth the cost if it works really well.

Well, you ended your post by saying: (I'm new to this board so don't know if private messages can be sent -- if you'd like to private message me that would be fine.) So that was why I posted on how to do it.

Six years is the normal number of years that they ask for when dealing with a non-filer, unless the amount of money is really large, or criminal fraud is involved.

You can not use the installment sale option on these houses, because this is a business, and the houses are the 'inventory', and inventory is specifically excluded from the types of sales that are allowed as installment sales.

Bill, to send a private message, just click on the member's name, on the left of the post, and you will see several options, one of which is to send a message.