RoyDaleOne

Form 843 if I recall correctly is used. I have not filled one out since the mid 70's.

I'm able to use actual lodging reciepts plus M&IE rate? Yes.

Ignore the reimbursement because its a nonaccountable plan with reimbursement already in W-2 wages? Yes.

"the fundamental question in determining whether benefits are excludable under section 104(a)(1) is "upon what basis were the retirement payments in question paid?" Mabry, T.C. Memo 1985-328." from Picard v. Commissioner, KTC 1999-44 (9th Cir. 1999).

See Picard for the complete analysis by the court.

"Is an employee allowed to deduct the difference between Per diem allowances for lodging, meals & the reimbursement?"

Deduct the difference between the "allowance" and "reimbursement"?

What I believe the question was, can I deduct the following?

Reimbursement is a "$100.00 per day and the amount of the allowable per diem is $125", can the difference of $25 per day be a deduction?

This is not allowed.

However, as KC states actual if the lodging plus the M&IE rate is in excess of the reimbursement then a deduction is allowed.

The substantiation rules for documentation are to be followed

We use to have "vintage accounts" under ADR. Now I think the name is "general asset accounts". The regulations made it sound like it is difficult to do, when it is very easy.

With the use of this technique only one entry is necessary for the bulk purchase of assets of the same class, like in the facts given.

Paid 1,000.00

Supp 100.00

Tools 900.00

Unless you have a some different need you can use one line item for all tools, etc.

The replacement of old windows in very bad condition sounds more like maintenance or a repair to me.

The new windows mostly did not extend the useful life of the structure of the house.

Repairing a leaking roof is maintenance, so, maybe could be the fixing of old windows.

You noticed that the taxpayer was in bankruptcy?

See Section 108.

You are not required to report on Form 1099-C the following:

Certain bankruptcies. You are not required to report a debt discharged in bankruptcy unless you know from information included in your books and records that the debt was incurred for business or investment purposes. If you are required to report a business or investment debt discharged in bankruptcy, report it for the later of:

The year in which the amount of discharged debt first can be determined or

The year in which the debt is discharged in bankruptcy.

Th 1099's you refer to are not issued when the client is in bankruptcy.

Tell ATX not to compute gain/loss.

So the NOL is not of a sufficient size to generate an AMTNOL.

Just to be sure there are two NOLs, regular and AMT.

You can treat the costs paid by the father as a gift and therefore she can qualify for HOH.

Other complications aside.

Since, I do not live in California, or a state that has similar laws about residential mortgages, I am totally unfamiliar with the concept of non-recourse residential mortgages.

In states that allow a deficit on foreclosure of the mortgage the question becomes when do you have COD. The note holder can foreclose on the property, and, if there is a deficiency on the loan seek restitution for deficit from mortgagor. Obliviously, if the note holder seeks sure restitution there has been no forgiveness of debt and no COD income.

Reg. 1.1001-2

Reg 1.1001-2(a) and Commissioner v. Tufts 461 U.S. 300 (1983)

If the property is sold in a foreclosure sale, the general rule is that the amount realized equals the greater of the sales proceeds, or the face amount of the debt provided the sale is to a third party, and equals the bid price if the sale is to the creditor.

If the foreclosure is of the taxpayer's principal residence, and if the foreclosure proceeds exceed the taxpayer's basis, gain may be excluded from income if the requirements for the exclusion are met.

Sec 165©: further, if the foreclosure proceeds are less than the taxpayer's basis a loss may not be recognized for the personal residence.

In addition, discharge of indebtedness income may be recognized under Code Section 103 with respect to property sold in a foreclosure sale.

Also, Reg. 1.1002-2 provides:

(i) The sale or other disposition of property that secures a non-recourse liability discharges the transferor from the liability;

There is no COD income IF the loan is recourse until the loan is forgiven.

See the tests for "forgiven".

Therefore, see the above about gain or loss concerning "straight foreclosure".

Situation A:

Year 1 = Foreclosure (1099A)

Year 2 = Debt forgiveness (COD) (1099C)

Situation B:

Year 1 = Foreclosure and debt forgiveness (COD) (1009C)

Bankruptcy, or insolvency and the new rules about your residence may provide a different procedure than from the above.

Click on the bunny Line 40 Page 2.

Add Std versus itemized worksheet.

Go forth.

Pub 54.

Stock options. You may have earned income if you disposed of stock that you got by exercising a stock option granted to you under an employee stock purchase plan.

If your gain on the disposition of stock you got by exercising an option is treated as capital gain, your gain is unearned income.

However, if you disposed of the stock less than 2 years after you were granted the option or less than 1 year after you got the stock, part of the gain on the disposition may be earned income. It is considered received in the year you disposed of the stock and earned in the year you performed the services for which you were granted the option. Any part of the earned income that is due to work you did outside the United States is foreign earned income.

See Publication 525, Taxable and Nontaxable Income, for a discussion of the treatment of stock options.

If the client has only one rental property the entire passive loss carryforward if deductible in the year of sale.

ATX takes care of this for you by marking the property as 100% disposed in the year of sale.

Professional prepared returns. generally. contain more complex tax situations, and therefore more potential for disagreement with the correct tax treatment. The more complex tax returns are, generally, not self-prepared. As a result of the foregoing any raw statistics are, really, meaningless for any real analytical purposes.

Well dropping your sss was one thing now its your 3ss...

What's next?

Page 32 of the Pub ....

See Pub 527.

Sec. 280A. Personal use by a child is treated as personal use by the taxpayer when rent is less than fair market value. Thus, all expenses are deducted on Schedule A. Income, however, appears on Schedule E.

You did not say what the family relationship is.

Pub 17,

Standard meal allowance. Generally, you can use the "standard meal allowance" method as an alternative to the actual cost method. It allows you to use a set amount for your daily meals and incidental expenses (M&IE), instead of keeping records of your actual costs.

I read somewhere that option is no longer legal. Got me.

See:

http://www.irs.gov/instructions/i1099ac/index.html

Form 1099A, generally, does not create a reportable situation on the Form 1040.

This is because the debt has not forgiven or cancelled at the time 1099A was filed.

There are situations where it is a reportable event.

Generally, a Form 1099C creates the reportable event.

In what year the case is closed determines the year to reduce the tax attributes.

http://search.irs.gov/web/query.html?col=a...=pub+bankruptcy

See Page 23 Pub 908

Does it involve a resident?

Also see

http://www.irs.gov/publications/p4681/ix01.html

and

http://www.irs.gov/newsroom/article/0,,id=174034,00.html