kcjenkins

If you had chosen to treat it as a non-depreciable asset, that would be true. But if the asset were simply overlooked, with everyone assuming and intending that it be depreciated, but it being accidentally being omitted, that is an omission that can be corrected by amending, assuming it is within the time limit. If it is longer than three years, then, yes, you have to go with the 3115.

KC

I downloaded and looked at several... was a little disappointed as the ones I look at did not have a single formula to calculate anything. Not even totals for the columns.

Jack, go to the TaxProExchange group site, and get the files there, and they will have the calculations, etc. If you are not a member, you can become one in seconds, and you will be very welcome.

KC

But if I take the full $5000 as Sec 179 it won't change any depreciation taken in 05 & 06?

That is correct, Cat, you just add the asset and §179 it, and you are good to go. While you can't go back and change depreciation methods that easily, you can for an omitted asset. Just be very clear in the 'explanation' area that it was omitted accidentally, and is now being added to the assets.

KC

Thank you for an excellent contribution to the board. This is the sort of post that makes us proud of our members. That you took the time to give such a detailed and useful answer is exactly the reason we wanted to keep this 'Community' going.

KC

I agree, I would deduct the actual out-of-pocket expenses on the C, not the A, since he did this not to support any specific charity, but to get his business some publicity. But he certainly can not deduct anything except the actual costs.

KC

Check with the individual states. In the past, for example, AR had to be paper-filed if there were credits taken for taxes to other states, because you had to attach copies of the other state's returns. But this year, AR added a special fax number, where you can fax in the copy of the other state, or states, within two days of efiling the state return, and it's accepted. Some other states have added special forms to take care of the problem.

KC

Notice the little orange box in front of the title to posts? If you click on that box, or on the title of the thread, it will take you to the thread. But clicking on the box instead of the name does more. It takes you to the 'next unread post' in that thread. So if you had looked at the thread before, clicking on the orange box skips over the posts you've already read, and takes you right to where you want to start reading followup posts.

KC

That really is strange. I've never been able to create a state efile without the return including all the efile forms needed. In fact, if it is not there, it has a warning and it has a button to click on to add the forms.

KC

I see no reason to change from the Kleinrock CE, it is cheap, convenient, etc.

KC

Also keep in mind that when any program is using Virtual Memory, it means that the program does not have all the 'real' memory it needs. So the true fix is to add RAM to your computer. Although Eric's fix is a good first step, and should be done anyway.

KC

Well, the efile helpline finally located the extension, so that is fine, but my bank rejected the payment and they are still researching it. I just hit 'use last year's info'; they didn't seem to have a problem putting in the direct deposit. So I just said to hell with it and tried to finish my return to just file the damn thing. See questions above......

That is just a perfect example of why I discourage clients using DD to pay their taxes. It seems easy, but if there is a problem, the IRS always treats it as YOUR FAULT. So mail them a check, then file the return as you normally would, Joan. That part they can handle OK.

KC

Eli, with tears in my eyes I want to thank you for that movie. What a wonderful story.

You must be a wonderful person yourself or you wouldn't have cared enough to share it with the rest of us.

Best wishes and God's blessing to you and yours.

Marge

Anyone who did not cry watching that needs a heart transplant. Thanks, Eli.

KC

You are still welcome to join in here, Mike!

KC

I understand your concern. If the majority of people on this forum are using any one of a number of "other" programs, the "program" help would be affected. While the program help would be affected, the IRC technical help is still available since it is not affected by what software you may be using.

Moreover, the camaraderie that we have would still be in effect and available. Perhaps we could get erc to change the name of this forum to XATXers.

Well, Bob, a lot of us have not decided yet whether or not we will be 'ex' ATXers or not. I think as the time passes and tempers cool, a lot of us are still finding that there is no other software that gives us as much, for the price, and are looking hard at continuing with ATX for at least one more year.

KC

KC it is good to see you here. I have missed your missives.

What is a link to your reference software research discussion lines/

Mike

http://groups.yahoo.com/group/TaxProExchange/

Please feel free to join us there, we have hundreds of ATXers already there.

KC

I had a brainstorm! We should all petition the ATX Communities database from ATX in order to continue this valuable service with all of it's history.

I'm certain that they will initially resist this request, however a class action from all of us threatening not to renew for 2007 may have some direct impact on their final decision.

What does the community think of this pursuit?

I think it's a waste of time and energy. Among other reasons, I doubt if they even have it saved, now. Sorry, Mike, but I think we just need to build on this site and the one at TaxProExchange, and forget about the old board. I'm pretty sure it is long gone, as they saw it as a waste of bandwidth.

KC

On the one to the ex-spouse, just put in the book value as the 'sales price', and it should fly. On the 'converted to personal use' one, if you want to you can just change the business percentage to zero, and it will suspend the depreciation, and you can just carry it that way until disposition.

KC

Client bought interest in oil well partnerhip Dec 2005 investing $16,000. K-1 for 2005 showed $12,000 IDC. No problem. Elected to write off in one year. After 3 months, well turned into pumping mud, and interest terminated about March 2006, client got distribution of $1,620. K-1 for 2006 shows IDC of $16,000. Seller of investment is telling client he can write off entire $16,000 investment this year.

My view is that he has a basis of $16,000 - $12,000 - $1,620 = $2,380.

I think what you are confusing is that there are two different 16Ks here, his initial investment, and this year's IDC. I believe the seller is talking about this year's IDC not the 'investment'. As I see , he has a basis of 16000 - 12000 - 1620 plus a deduction of this years IDC.

KC

I have a client, a veterinarian, who owns property with both an office building and a separate kennel building on it. Thru last year he operated the kennel so income, expenses and depreciation all went thru his sched C. He closed the kennel operation at the end of the year. This month he began renting the kennel building to an unrelated party who has reopened it. Because this is now a rental, I will move the income to sched E to lower his SE tax. My question is, how do I handle the depreciation on the kennel building? Can he just continue with the same depreciation schedule (basis, previous depr, time period, just on sch E) or does he have to start over using current undepreciated value as his basis and a new 39 yr time?

Since there were only a few months in which the kennel stood idle, I would not see any problem with simply moving it to the Sch E and continuing to depreciate it on the same schedule. The software make that super easy, just add an E then go to the asset entry and select that building and click on 'move asset'. Then assign it to the E, and you are good to go.

KC

We had a great time! Yes, the receptionist will be back without question. The other two definitely got the boot!

All is back to par is our big town of SIDNEY!!!!!!!!!!!!!!!!!!!!!!!!

Chaz is back standing on the corner at Woody's Market drinking warm corona's

Crazy Mary is back now, taking her bath in the fountain on courthouse square.

Janitor Bob can now be randomly seen in his clown suit (watch out for the soccer goal's JB!)

Single Dad come's out of the office daily for ball practice and games! (Still run from Chaz though!)

It's just Bookkeeping, Sales & Payroll from this point!

Only challenge, I can't find the switch to turn the air conditioner on at the office! Gosh I better ask these kinda questions at Tax School this year!

Regards,

Single Dad

Maybe you should ask the custodian about the air/con? Thanks for the laugh. Your student employees brought back lots of memories. My experience was much like yours, only I was not lucky enough to also get the good neighbor!

KC

JB................your very correct about the aspect of trust & devotion.

My office will do a complete comparison of all the tax software product's on the market this off season. Actually we've already began ordering demo versions.

The decision they made was totally unprofessional in my eyes. Not going to get into everything here, but my office must look at additional options due to reason's beyond them taking away the community board.

Regards,

Single Dad

Over in TaxProExchange I am running several threads on this very issue, evaluations of most of the major options. Please feel free to read them, and to contribute to any of them you are able to. I'm hoping that we get a lot of feedback as users check out the trial copies of the alternatives. There is a thread for Creative Solutions/Ultratax, Drake, ProSeriesFX, and Orrtax. Anyone who wants can start on on Lacerte. I did not, because there is NO WAY I would go with Intuit unless they were the ONLY software available. But that's just MY opinion, so feel free to include it if you want to.

KC

First you need to determine whether he reported the income as earned. If so, it might not have been taxable, or only a small part of it taxable. But if it has never been recognized then yes, it's all taxable now. If you can not determine whether he reported it as it was earned, you have to assume the worst, and report it all now. Better than having it come back to bite them later.

KC

What I want to know is why is it that the ones who most need to have 03 amended just came in THIS WEEK? Makes me want to scream at them!

What is it that when you take away the whole, you still have some left over?

The problem is that he really does not have a loss to deduct. Because when he put it in, he put it in out of pre-taxed income. So his basis is zero in it, for TAX purposes. Also, even if he had made non-deductible contributions, which would give him some basis in the IRA, the rules are that you can only claim the loss when you take out ALL of your IRA money.