Jump to content
ATX Community

RoyDaleOne

Members
  • Posts

    546
  • Joined

  • Last visited

Everything posted by RoyDaleOne

  1. A couple of years ago I sent CCH a number of suggestions, all related to head down entering of the data. Not one has been implemented. I now offer my services and any suggestions I have for a fee to them. They pay other people and their knowledgeable programmers, so they need to pay anyone who makes a suggestion that they use. So far I have not received a request for information about the services I offer from CCH.
  2. The correct way is to allocate common expenses to each property by some reasonable method applied consistently each year. The passivity loss computation can be incorrect if you use a dummy property. If the expenses are related to the rental activity then the expenses should not be on page 1.
  3. http://www.google.com/#hl=en&source=hp&q=free+accounting+software+for+small+business&btnG=Google+Search&aq=f&aqi=&aql=&oq=free+accounting+software+for+small+business&gs_rfai=&fp=1df4639b9e375fe6 Google search for free accounting software.
  4. You should get a stepped basis of some nature 50% or 100% or something.
  5. http://www.irs.gov/taxpros/article/0,,id=217946,00.html Copy the link above into your browser. Text of Letter to Tax Return Preparers Prepare Accurate Individual Income Tax Returns The Internal Revenue Service is taking a number of steps to contact paid tax return preparers to improve the accuracy and quality of filed tax returns and heighten awareness of preparer responsibilities. We are sending letters to and visiting a segment of the return preparer community to provide information on the kinds of errors we are seeing. This letter describes common errors made by taxpayers and return preparers and your general responsibilities as a return preparer. We encourage you to review this information now to ensure you fulfill your responsibilities and avoid making these common errors. Beginning the last week of January, IRS representatives will visit many of the preparers who receive this letter to discuss their obligations as a return preparer. What Are Paid Return Preparers Required To Do? As a paid return preparer, you must take all necessary steps to file accurate Federal individual income tax returns on behalf of your clients. These steps include reviewing the applicable tax law to ensure that all income has been reported on the return, and that only credits, expenses and deductions allowed under the Internal Revenue Code are taken. We describe below common errors we are finding on Form 1040 returns (Schedule C, Schedule A, the Earned Income Tax Credit and the First-Time Homebuyers Credit). Please review this information and ensure you are accurately applying the law to your clients’ specific circumstances. Common Schedule C Errors: Return preparers must ask sufficient questions and review sufficient taxpayer records to determine that income and expenses reported are correct and complete. For more information, consult IRS Publication 334, Tax Guide for Small Business. Gross receipts must be fully reported. Taxpayers should provide books and records to substantiate the fact they are conducting a business and the gross income received during the year, or you must receive sufficient information in the form of other documentation which enables you to reconstruct their income. Expenses claimed for the business must be ordinary and necessary for that type of business. Taxpayers should provide books and records to substantiate Schedule C expenses, or you must receive sufficient information in the form of other documentation which enables you to reconstruct their expenses. All expenses claimed must be paid or incurred during the taxable year and the allowable amount of the expense must be properly computed.\ Common Schedule A Errors: Return preparers should ask sufficient questions to determine the taxpayer’s correct itemized deductions. Taxpayers may not know the tax law and incorrectly believe they can claim deductions on Schedule A for nonqualifying expenditures. For more information, go to www.irs.gov and review Tax Topics 501 through 514. Unreimbursed Employee Business Expense, Form 2106. Taxpayers may only claim allowable unreimbursed expenses. Mileage claimed on Form 2106. Taxpayers must have documentation to support business miles claimed. Travel, meals, and entertainment expenses. Taxpayers must have documentation for the business purpose associated with the deduction, as well as receipts to support the expenses claimed. Charitable Contributions. Taxpayers must have receipts for all cash contributions and adequate documentation for all non-cash contributions. In some cases, an appraisal may be required to substantiate a large non-cash contribution. Earned Income Tax Credit (EITC) Common Errors: Return preparers should ask sufficient questions and accurately complete appropriate worksheets or forms to ensure that the taxpayer is entitled to the credit. EITC return preparers are subject to additional due diligence requirements, including completion of certain documents, record-keeping requirements, and reasonable inquiry of taxpayers. For more information about these due diligence requirements, see the IRS’s Due Diligence Continuing Professional Education module at www.eitc.irs.gov/rptoolkit/main/ddmodule. More detailed information on EITC eligibility criteria and EITC errors can be found at www.eitc.irs.gov or in Publication 596, Earned Income Credit. Common EITC errors are listed below. Claiming a child that is not a qualifying child. Taxpayers may only claim a child that meets the age, relationship, and residency requirements. Married taxpayers filing with an incorrect single or head of household filing status. Inaccurately reporting income. Using incorrect Social Security Numbers or incorrect last names. First-Time Homebuyers Credit (FTHBC) Common Errors: Return preparers must ask sufficient questions and review sufficient taxpayer records to determine eligibility for any of the three versions of this credit and the accuracy of the amount of credit claimed. For more information on eligibility for the credit, go to www.irs.gov and select Tax Topics 611 and 612 and IR-2009-108. The most common errors noted on returns claiming the credit are listed below. Claiming the credit prior to closing or taking occupancy of home. Filing an incomplete or incorrect Form 5405, First-Time Homebuyer Credit. Claiming more than 10% of the purchase price. Failing to meet prior home ownership rules. Both spouses incorrectly claiming FTHBC when filing status is married-filing separate. Married taxpayers incorrectly claiming FTHBC when one spouse was a prior homeowner. Your Responsibilities as a Paid Tax Return Preparer Return preparers are required to exercise due diligence in preparing tax returns. As a general rule of thumb, that means knowing the underlying substantive law affecting an item of income or deduction. Publication 470, Limited Practice Without Enrollment, and Treasury Department Circular 230 (if you are also a practitioner) outline your due diligence responsibilities. A return preparer must exercise due diligence in preparing or assisting in the preparation, approving, and filing of returns, documents, affidavits, or other papers relating to Internal Revenue Service matters. The return preparer must also exercise due diligence in determining (1) the correctness of oral and written representations made by the return preparer to the IRS, and (2) the correctness of representations made by the return preparer to the client with reference to any matter administered by the IRS. Consequences of Filing Incorrect Returns Return preparers are expected to be knowledgeable in tax law and to prepare accurate returns. The consequences of preparing inaccurate returns can be severe and can extend to both you and your client. These consequences may include any or all of the following: If your clients’ returns are examined and found to be incorrect, your clients may be subject to accuracy or fraud penalties plus accrued interest on any underpayment. Return preparers who prepare a client return for which any part of an understatement of tax liability is due to an unreasonable position taken on the return based on the preparer’s advice, can be assessed a minimum penalty of $1,000 (IRC section 6694(a)). Return preparers who prepare a client return for which any part of an understatement of tax liability is due to the return preparer’s reckless or intentional disregard of rules or regulations by the tax preparer, can be assessed a minimum penalty of $5,000 (IRC section 6694(). The assessment of return-related penalties against a return preparer may result in: Suspension or expulsion of the return preparer’s firm from participation in IRS e-file; Injunctions barring the return preparer from preparing tax returns; Referral for criminal investigation; or Disciplinary action by the IRS Office of Professional Responsibility if the return preparer is also a practitioner. Where to Find More Information If you need additional information, visit our website at www.irs.gov. The IRS provides educational material through the Tax Topics feature, as well as links to educational material for practitioners at www.irs.gov/taxpros. Page Last Reviewed or Updated: January 07, 2010 I know we all comply with directive.
  6. Please read the instruction about the use of the alternate valuation date, it can be used only in certain situation and if use all property is valued at that date. You can not pick or choose when date to use for which item. I was not sure from the post if this fact was known. The examples and sample return is very good. however, if there is a specific item please about that item. I would list each item separately for each account, makes it easier to tic-and-tie. The interest in the life insurance policy accrues after the DOD and therefore is not included in the Estate Return because the interest does not exist until after the death.
  7. http://www.irs.gov/businesses/article/0,,id=134671,00.html There is a nice table of various items, including floor covering as Section 1245 asset, including new cost and purchase cost segregation. Because the business activity is potently needed to determined the asset class, I missed that information in the post I can not comment on which asset class to use. http://www.irs.gov/businesses/article/0,,id=134180,00.html Go to IRS web site and search for Cost Segregation Audit Techniques Guide - Table of Contents. The links don't work for some reason.
  8. There is a limit on e-filing W-2g, last year was about 32, so I suggest paper is the way to go.
  9. Who is doing the estate return? Present value (discounted cash flow) is included in the estate. Just wool-gathering. Other Income is the place. Not sure about the number for the withholding reporting, line 24e or something like that.
  10. The people that do tech support are very helpful. However, half of my write-up clients files were lost by them, the use of an & sign in a name is still not allowed by the program, everywhere, the IRS allows the & sign in a name, parts of the ATX program does not. The problem is the design of the program using the Access (JET) database engine. The new Form for first time home buyers credit is not updated in the 2007 program making amended returns more difficult. I still do not have acks for 940, 941 filed in January.
  11. I have a farm, but my daughter is the one into Farmville. I am not a very good farmer like the rest of my neighbors, however, come join us. All my neighbors our family.
  12. Installment sale appears to be available. If the 2010 payment was in Dec 2010, what would you do?
  13. RoyDaleOne

    Tax

    What cancellation of debt? It is either; 1. Section 121 if the taxpayer's principal residence, 2. Loss on 4797 if rental property, 3. Loss on Schedule D if investment, 4. Nondeductible loss if personal asset. Pick one.
  14. As an activity not entered into for profit. I think line 21 and Schedule A.
  15. I hate myself when I do this. "He entered into an agreement with a friend who took possession of the truck and continue making the payments to the GMC car dealer." Does the foregoing mean that the taxpayer is still making the payments? If so, I would do nothing. Because the taxpayer is still the "equitable" owner of the truck. You see equitable ownership with houses.
  16. Is there not a Form to handle this?
  17. It is not reported by the taxpayer if it was part of the bankrupt estate. SECTION 108 et al.
  18. http://www.donaldhuber.com/ One of my clients, if you are interested let me know, maybe a discount. Wife if you read this post please forget it.
  19. Generally, Section 108 and the Pubs covering same.
  20. The rule of contract law is being subverted by the government.
  21. I use copy and paste to do this. Warning, I did this by trail and eror and was very happy with results. 550 trades download from brokage site in Excel format. Reformated to match the Schedule D Supplement format then copied and pasted the information right in the Schedule. Worked great.
  22. I love flowcharts, just works with my brain, what little there is.
  23. I am not sure if a Section 754 election is needed or not.
×
×
  • Create New...