gfizer

Just depends on if the POA is a durable power. The general powers of attorney prepared by our office specifically include the power to sign and file federal and state tax returns and contain language stating that they will not be affected by the disability of the principal.

I prepare tax returns for an investment club which is organized as a general partnership consisting of 21 members/partners. The club began in 1988 with each member contributing $500, which was used to purchase stock. The club receives stock dividends which are held in a money market account with a brokerage firm. In addition, each member makes an annual contribution of $300. A couple of times each year, the members meet and decide what new stocks to purchase with the accumulated dividends, annual contributions and any gains from stock sales. No funds are ever distributed to the individual members. Each year we prepare a 1065 and pass the dividends, interest, and any gain or losses through to the individual members/partners. In 2010 the club decided to sell substantially all of its holdings, thereby netting a gain of approximately $145,000. I have shown each stock sale on schedule D showing the sale price and the cost basis. One of the members is insisting that since they never received any cash distributions of the income and yet paid tax on it every year, that the income amounts provide additional basis. I disagree because the income was used to purchase other stocks thereby providing basis for those new stock purchases. It appears to me that we would be double-dipping if we use the income as additional basis and then also use it as basis for the other stock acquisitions. Since we are talking about an $83,000.00 difference I thought I would get some input from you guys. Any thoughts?

I'm having the same problem. I really think it's a program glitch.

Anyone heard when we should be able to e-file fiduciary returns? ATX website says it should be available in late January but obviously that didn't happen. I've got 10 sitting on my desk I sure would like to get rid of.

Same here except its been 23 years for me. This was the most stress-free tax season I've ever had. Now on to 990-PF returns. Yuck!

I'm just really glad that I don't have anything to efile today. Sent the last of them yesterday. However, I would like to receive my acks instead of the famous (or infamous) "fatal error" message.

I filed an amended return showing no money sent with the originally e-filed return which had a balance due for a client a couple of years ago. It all worked out in the end, but be prepared for hate mail from the IRS wanting to know where the payment is until the amended return finally gets processed against the orignal return which took about 3 months in my case. Save yourself some heartache and let your client know right up front to expect correspondence.

I have a married couple who both receive a w-2 from their respective employers for 3rd party sick pay. W-2s correctly show wages in box 1 and no other entries for tax, social security or medicare withholding. Other than social security disability this is the only income they have. They each received their $250 payment. Does the 3rd party sick pay count as earned income and qualify them for the $300 balance of the making work pay credit?

I did the returns for the decedent prior to her death and also returns for the estate until the time it was closed. I do not do, and never have done, the individual returns for any of the 5 partners. When they didn't contact us to do the partnership return in the 1st year after settling the estate we assumed that one of their preparers was doing the returns. According to the daughter who dropped off the info there is no reason behind her sudden decision to file the returns other than the desire to get everything straight. Next question. I'm thinking that this is something I may not even want to become involved in. My practice is very small and it's simply not worth the headache to me (and I already know they won't be willing to adequately compensate me since she asked if I thought I could do everything for under $1,000). I can't advise them to pick up with the current year and pretend the previous years didn't exist or to simply begin reporting their share of the income/loss on their own individual returns. How do I extricate myself from this situation and cover my rear end? And do I have any responsibility to report the non-filing, etc.?

The answer to that question is a resounding NO. The income has never been reported by any of the partners. So far I've done the returns for 2003 and 2004 and they both had small losses. I shudder to think what the penalties could be on this deal.

While it's true you won't have a 1098 or similar interest statement from the lender, the client will have cancelled checks and/or bank receipts showing that he and not the son actually paid the interest. Just a thought, and I haven't done any research on it, but is there any way the son could do something like a 1099 nominee to his father?

Back in 2001 our office (I work for an attorney) handled the estate of a local farmer who left her farm to her 5 children. We closed the estate in 2002 and the kids decided to take over the operation of the farm as a farm partnership. We did all the necessary paperwork and wished them well. Fast forward to December 2009.....one of the children of the deceased lady drops off a spiral bound notebook and leaves a message with a secretary to tell me that "we need to file taxes for mom." Turns out they have not filed the first partnership return. The daughter says she knows she should have been but she just never got around to getting it done and now she just wants to get everything straightened up. I've warned her about possible penalties and advised her that all the partners will need to file amended returns for all open past years to include the partnership income/loss. My question is this...do I file partnership returns for every year beginning with 2003 even though some of the years are now closed years? Is there anything else I should be aware of in this situation that you all can think of that I am overlooking?

I LOVE farmville! Like you I find it to be a great break and I can always use more neighbors!

No. They were installed during construction but were first used when the taxpayers occupied the home on 12/3/09.

Taxpayers built a new home which they occupied for the first time on 12/3/09. They lived in their previous home for 30+ years. As I see it they clearly qualify for the $6500 long time resident credit. As a part of this new construction they installed windows, doors, and a geothermal system which qualify for the residential energy property credits. I searched the archives and found where someone posted that residential energy credits couldn't be taken on new construction but the IRS instructions for Form 5695 state: Who Can Take the Credits: You may be able to take the credits if you made energy saving improvements to your home located in the United States in 2009. For credit purposes, costs are treated as being paid when the original installation of the item is completed, or in the case of costs connected with the construction or reconstruction of your home, when your original use of the constructed or reconstructed home begins. I've looked at the instructions and other information for both of these credits and can't find any guidance on this subject. Can my taxpayer take both the $6500 long time resident homebuyer credit and the residential energy property credits for windows, doors and geothermal system on their 2009 return? Thanks for your input!

My taxpayer lived in a 1970's model single wide mobile home which was located on a farm which he and his dad bought as partners 6 years ago. The single wide mobile home was not titled in my taxpayers name, but he lived there rent free and was responsible for one-half of the mortgage payment on the underlying real estate. My guy has since married and this year purchased a new doublewide home which he had setup on the same piece of jointly owned farmland. Question 1: Would he qualify for first time homebuyer credit or long time resident credit? Question #2: The doublewide cost $40,000 but he also paid another $30,000 in setup expenses. Would only the cost of the home itself be considered for the credit or the total with setup expenses? Thanks for your help.

Children ages 12 and 15 were removed from their natural mother's home by Department for Families and Children and were placed as foster children with my taxpayers because their natural father (divorced from their mother) was deemed unfit at the time as well. The children remained with my clients for 8 months of the year and then they were placed in the custody of their father in November of 2009. I attempted to e-file my client's return allowing them to claim the exemptions for their foster children but got a reject saying that they had already been claimed on another return (I assume their fathers). Who is actually entitled to the exemption and how do we rectify this? Should I just paper file the returns and let the IRS straighten it out or what? Thanks for your input.

Anyone know how I notify the IRS that my business address has changed for purposes of my ERO status? I'm trying to be proactive and avoid any problems when the time comes to start efiling returns. Thanks for your help! Gina

Thank you for your quick response! Now I can officially say I'm finished!

I have a client who was a college student in 2008 and worked in Indiana but is a resident of Kentucky. I am in the process of preparing the IT-40RNR. Client had three part time jobs in 3 different Indiana counties during the year. How do I handle this since there is only a box to list 1 county on the face of the form. Do I have to file a separate return for each county? Thanks for your help!

BUMP. I really need your guys input. Thanks!

I have been asked to prepare a return for a trust. This is a trust established pursuant to a will. The decedent directed that all of her residuary estate be placed in trust and that the income from the trust be used to provide college scholarships for local high school seniors. The trust receives no funding from any other source. I believe that this trust is a Section 4947(a)(1) non-exempt charitable trust and should be treated as a private foundation and file a Form 990-PF. My problem is this: The trust has been in existence for three years now and the two previous years’ returns were filed on Form 1041 for a complex trust (which has cost the trust thousands of dollars in taxes that could have gone toward its charitable purpose). If I don’t file a 1041 this year and instead file on Form 990-PF is this going to cause a problem and is there anything I can or should do to prevent problems. Or does anyone know of some reason why I can’t file 990-PF? I know it’s late in the season and you guys are all covered over right now so I apologize in advance for adding an extra burden but I respect and trust your advice and opinions. Thanks!

One of the local churches received a payment that has been reported to it on Form 1099-MISC. The payer apparently did not have the church's federal id number so they withheld federal income tax from the payment. The church is not required to file a tax return so how do I go about getting a refund of the federal tax withholding? Do I write a letter to the IRS explaining the situation and request a refund or is there a form that should be filled out? It's only $74.29 but hey, it belongs to the church and not the IRS. Thanks for your input.

I do payroll for three different companies and prepare the payroll checks for one of those. Like you I needed a simple program without a big investment. I have been using a program called TKT Payroll for about 5 years. It's very simple and supports as many companies as you want. I order my check stock from NEBS. You can find it on the net by doing a web search of the sofware name. It's sold by a company called TKT Enterprises and costs $11.95 for a download of the full version and $5.95 for the upgrade each year. It works great for what I do at a very affordable price.

First some background: My computer crashed a couple of months ago. I was able to back up my hard drive onto another computer before reformatting but now for some reason I can't get the other computer to power up either. Now my problem: I needed to efile the only return I had on extension today. I transmitted the efile and its status now shows duplicated. I never thought about it before I transmitted the return but I assume this is because my DCN counter started over at 1 since I had to do a fresh install of my software. What action does the duplicated status require? I have no idea what my DCN counter was up to before the crash. Is there any way I can find that out, or is there some other way around this? Thanks in advance for your help!