Jake

If the house is gone, the only thing that he has left is a note receivable from the buyer. Assuming that the note is uncollectible and has no value, then he would have a capital loss that could be writen off against capital gains or against ordinary income ($3,000 per year). The basis would be the carrying value of the note when it became worthless. The sales price would be zero.

I use Medlin for several of my smaller payroll clients it is pretty basic but very inexpensive. www.medlin.com I also use paycycle at 14.99+ per month for my clients that require a little more service like direct deposit.

I have had similiar situations and write the loss off on the Schedule D as a capital loss. I view the earnest money or the "right" to purchase as an asset that can flucuate in value (depending on the value of the underlying property). The down side is that the loss is limited on thre individual return. BTW I hope you enjoy Vegas. I lived in the Summerlin area for 4 years about 8 years ago.

Tom, I had a very similiar situation several months ago we responded to the deficiancy notice with a letter of explanation and a copy of the disabilty ruling. I have not heard back from the client so I am assuming that the IRS is not pursuing the penalty. I will post if I hear anything different. Jake

I have gone to the Las Vegas Forum for the last two years (I probably won't go this year). I have noticed that generally speaking the classes presented by one of the sponsoring organizations (ie AICPA, NATP, etc.) are a lot better than the classes presented by an IRS employee. There are a lot of people at the Las Vegas Forum so be prepared to deal with crowds. Also I don't stay at the Rio (the host hotel) the Gold Coast is just across the street and it is not a bad place to stay for about $50 per night.

I just switched some of my payroll clients over to Paycycle and the criteria that I used was that I would not move a client over to Paycycle unless I was billing out at least $50 per month for payroll services. The way that I bill that means that they would need to have at least 8 paychecks per month. I still use Medlin for my single owner S Corps and smaller payroll clients.

I do not know if you can get a demo of the program or not. Last year it came withe the TTO package. We have used the program and for the most part we are really pleased with it. It seems to intergrate well with the tax software. We did spend two days on the phone with support trying to get the network version of the program working on all of the work stations. This is the first year that we did not print any tax returns for our files nor did we make any copies of W-2's 1099's etc.

I believe it is the RR equivelant to medicare. Not 100% sure though.

It may be that your client misunderstood his accountant. Assuming that the income on the 1099-Misc is reported in box 7 it is going to be subject to SE tax. I suspect what the accountant told him is that the income from the k-1 will not be subject to SE tax. BTW the use of a 1099 to show income to a <2% s/h from a S Corp is common but incorrect.

Thanks bcollen that was just what I needed.

The asset history report will show the 2008 depreciation for each individual asset. Is there a summary report in ATX that shows 08 depreciation. My client wants this number for his monthly bookeeping and I do not want to send a page for every asset (96 in total). Thanks for any help

If you go back to the 2004 Max program you can print the 8109B's without the "Do not use message" The banks and credit unions in my area will accept them.

I have not had any issues with Vista and ATX for my 05- 07 programs. The pre 2005 ATX programs did not work well on the Vista machine. I have also had to update my scanner driver and a couple of other software packages that were not Vista compatible.

I had a similiar situation last year but my client was the one who was purchasing the property. The contract was expiring and the buyer paid the seller $35k to extend the contract into the next year. I did not report the 35k on the buyers last years tax return. If the sale fails this year I will treat the 35k as a capital loss if it goes through I will add it to the basis of the property. I would assume that seller would not recognize it as income until the sale either materilized or failed. Either way I would think that it would be reported as a Sch D activity. Just my thoughts. jake

ATX is the only tax program I have ever used. I selected it in 1999 because it was complete and relativley inexpensive and I still use it today for the very same reasons. I think the program gets better each year and this year has been pretty much problem free.

I would consider them as active participants in a rental activity.

[is it really worth risking a fraudulent return for $200 credit (maximum on windows).

Funny and appropriate considering that we got 2ft + of snow over the past 24 hours.

No, at least not based on the information from the 1098-T. Grant money is not taxable nor are most scholarships.

I have a return that has an election concerning a lump sum Social Security payment that needs to be included with the return. Is the election transmitted electronically with the return? If not can I still e-file the return and send the election with an 8453 or does the whole return need to be paper filed. Thanks for any help. Jake

"Since it has been rented I don't think I can use the strategy for donating appreciated assets (and avoiding the capital gain tax)." Why not?

I suspect what the poster is referring to is the option that pass through entities sometimes have to pay the state taxes for the out of state income on behalf of a member/owner. The benefit is that the taxpayer will not have to file additional state tax returns. In my limited experience I have found that from a bottom line tax perspective it doesn't really matter if a composite return is filed or not.

Thanks KC for the information and the not so subtle reminder to update my profile.

I had a client die unexpectedly a few days ago he owed the IRS about $16,000 and he was making monthly payments. The taxpayer filed as single. My question is what happens to this debt? Do we need to notify the IRS? Will the IRS file a lein against the estate? any help or references would be appreciated. Thanks Jake

It seems that over the past couple of years more and more clients expect to pay via debit/credit cards. I am looking at getting set up to take cards and am looking for suggestions for a merchant service provider. I was also curious as to the percentage of forum members that accept payment via debit/ credit cards. Thanks for any input.