kcjenkins

And, just to be clear,  that is "any part of 5 months"  so it could be 1/1/15 to 5/5/15  or 6/28/15 through 10/2/15, etc.  

1 hour ago, DANRVAN said:

Schedule E is for rental of real property, not personal.  I agree with "cbslee", there used to be a lot improper reporting of "saw rents" on Schedule E.  They would also depreciate their pickups and related expenses on Schedule E. 

In regards to "be in the business of renting tools..", it depends on facts and circumstances.  The key elements are regularity of activities, frequency of transactions, and the production of income. An occasional activity is not subject to SE tax. There are a number of Revenue Rulings that discuss these elements.

Also agree that it should have been reported on W-2.

Yes, used to be a lot of companies tried to save some payroll taxes by "renting" employee's tools and/or trucks, but the law is clear that even if it was 'rent', to the payer, it's Sch C income to the recipient.  And the net income is subject to SE taxes.  Unless it's an isolated, one time thing, fighting that is a waste of time.  And depreciation can be a nightmare, if the truck, for example, is used for both personal and "business" use, because the clients almost never keep any usage records. 

5 hours ago, BulldogTom said:

One of my best audit wins was one of these.  I thought I had no chance on the tool rental part of the audit.  There were several other issues (IRS was trying to get SE tax on gambling winnings, denial of child tax credit, etc) that I knew I was going to win on, even if I lost on the tool rental 1099 issue.  By the end of the 3rd page of my appeal letter, I think the auditor got tired of reading and just issued the no change letter.  Every employee at the shop this taxpayer worked at got audited and they all just sent in the check to the IRS.  I would not have fought it if there were not other issues that the IRS challenged on the return.  Still brings a smile to my face when I remember that audit letter.

Tom
Newark, CA

Yes, when you win one that you know you can lose, it sure makes you feel good.  Maybe not right, but anyone who's been in this business more than a few years has seen the IRS bully clients into paying when it's not right often enough to enjoy it when they screw up in our client's favor.  

OMG  When I got to 'really bloody fast comets' I cracked up !  Laughed so loud I upset my dog, who, of course, was using my lap for her lounge. 

6 hours ago, Cathy said:

Again, I'll update when I hear directly from the Policy Division.  Hopefully, they will provide us with a list of those states that are approved for Louisiana taxpayers to receive the credit.  In a telephone conversation yesterday with a lady with the Policy Division, I was told no list exists.  OK....so how do they know if they can accept the credits paid to another state on a Louisiana tax return???

Don't you just love that?  It's so crazy that only a government employee could say it with a straight face.  Look forward to hearing what they say when they get back to you.

STATEMENT OF WAIVER OF CLAIM OF SUPPORT.pdf

The nice thing is, if you do this, it will be checked as you want it, but it can still be changed in any return by unchecking it in that return.  Effectively, you are setting a 'default', but are still able to adjust if there is a special situation.  

Good thing, really, so she had to ask you.  This way she does not mess herself up just because she's in a hurry.  We see that so often.

Deb is right, Terry.  No one is ever required to file a joint return, if either one does file MFS, the other must too.  Each is supposed to inform the other.  And then each files the 8958.

On the return  each spouse should report his/her own income on line 7 (for wages) and 8a (for interest), and any other lines as appropriate, then make an adjustment on line 21 to divide income equally between spouses. On line 21 she could have a positive community property adjustment  for half of his income and a negative community property adjustment for subtracting half of her own income.

Yep, many of them do come back, and if they do you can then raise their fees, or decline to take them back if you choose.  

On 1/23/2016 at 0:54 PM, BulldogTom said:

 I asked her how she came up with the deductible loss on the rentals and she said "I just kept clicking on different answers in Turbo Tax until I got the highest refund".

Tom
Newark, CA

Yes, that's how most non-professional people do it, actually.  They somehow convince themselves that "the program" will not give them any "wrong" choices, only valid options.  Crazy, sure, but it does make a kind of weird logic.  

It's a secret, Easy.  

Look into it now, so you can shop for a good price on a replacement card.  You want to have it and replace it BEFORE it totally dies, which is sure to happen at the WORST possible time.  

A reminder to all my friends: Driving on snowy roads is not for weenies...

https://youtu.be/DLJMDpHnRdk

The only significant advantage is that you have proof of the filing, versus mailing them.   

You have to let it go, the stress is not good for you.  I too found it hard to end my practice, so many clients were long-time and I liked them personally.  But it's never going to be able to find someone who will do it 'like you did' and 'as well as you did', any way.    Your health has to be your priority, tho.  

Oh, no !  Now that darn ad is running through my mind!  Darn you, Cat, that was mean.  

Darlene, I'm sure you will do just fine.  I have a few links on the subject, which you probably already have, but just in case, I'll list them anyway.  

http://www.timbertax.org/getstarted/sales/saletypes/sec631a/

http://www.fs.fed.us/cooperativeforestry/library/taxpubfaqs.pdf

https://www.law.cornell.edu/uscode/text/26/631

http://www.thetaxadviser.com/issues/2013/dec/clinic-story-06.html

2 hours ago, TAXMAN said:

So in retrospect even tho this is a store revolving account treat items as in service and choose which way I may go on dep or deminus rule instead of waiting until its paid for? Is this what we are thinking?

Yes, that's right.  As Michael said, the new regs greatly simplify expensing these types of equipment.  And don't get confused on the software issue.  While software may be a 3 year class, any software that is updated/replaced every year [tax software is a perfect example] should be expensed each year.  

What, you never hung out in Goobertown?  

A kindergarten teacher was helping one of her students put his boots on. He had asked for help and she could see why. With her pulling and him pushing, the boots still didn’t want to go on.
When the second boot was on, she was nearly out of breath.

She almost whimpered when the little boy said, “Teacher, they’re on the wrong feet.”

She looked and sure enough, they were. It wasn’t any easier pulling the boots off than it was putting them on. She managed to keep her cool as they worked together to get the boots back on – this time on the right feet.

He then announced, “These aren’t my boots.”

She bit her tongue rather than scream, “Why didn’t you say so earlier?” like she wanted to. Once again she struggled to help him pull the ill-fitting boots off.

He then said, “They’re my brother’s boots. My Mom made me wear them.”

She didn’t know if she should laugh or cry. She mustered up the grace to wrestle the boots on his feet again. She said, Now, where are your gloves?”

He said, “I stuffed them in the toes of my boots…”

One evening I was in a bar talking to my friend.

"Last night, while I was out drinking, a burglar broke into my house.."

"Did he get anything?" asked my friend.

If you think he should be paid wages from the estate or trust, then that's what you do.