Tax Prep by Deb

I Agree, and I should have known better as I have done several of these foreclosure things and have had to make exactly the same adjustments. Deb!

I have a client who has a business that is he runs out of his home. He does qualify for the office in home deduction. This year he added a cement pad so that he could park his work truck off the street per city's ordinance. For depreciation purpose, what is the classification, and recovery period? Also would this qualify for the 50% bonus depreciation? Any thoughts would be greatly appreciated! Deb!

I agree also with RoyalDaleOne and LindaB. The FMV value is more than what was owed, therefore no COD income. However my question is how do you show this on form 982 or do you just ignore the 1099C and make notes for your own file? Deb!

Thanks for the headsup! Deb!

If you faxed it to him, then you should still have the original. Is it that you just don't want to re-fax it to him? Deb!

Could it be a corrected W-2 and just not marked as such? It could be they changed payroll midyear and didn't know how to merge the two together, at any rate I would certainly ask more questions. Deb!

I'll take a stab at it, don't know if I'm write or not. I think what happened is that when he became eligible for ssa disability, you had to pay back an overpayment made by his workers comp insurance. Therefore ssa is saying that they paid him the 9,000.00 but in fact they sent it to his worker's comp insurance company as a payback! Like I said, it's just a guess! Deb!

That's the way I understood it as well. Some happy clients, some not so happy! Yes, Taxes are fun! (most of the time) Deb!

I did a couple of them. I had not problem but it was before the new law passed. Deb!

I am beginning to think that the confusion over dates July vs. Nov is pertaining to what year you request the credit. If you are requesting it on your 2008 return the cutoff date is July, however if you will be requesting it on your 2009 return it is good thru November. I too saw on IRS site the July deadline, but it definitely pertained to the credit for a 2009 purchase with the request for the credit being made on the 2008 return. Deb!

Thanks once again TAXBILLY. Out of curiosity I went to the site and in doing so found an answer to a question that I had been wondering about. A client of mine is about to close escrow on a home and we have discussed over the last couple of weeks about the 8,000.00 credit. We had already filed his 2008 return and I was wondering if they would have to wait till next year to claim the credit or if I could ammend their 08 return and get them their money faster. This was actually answered in the article you sited. I am going to have a very happy client! Deb!

I finally broke down and called customer support. It took me about three minutes to get to someone who very efficiently fixed my problem. It seems it's much easier now day to add additional states. She had me open the program, go to the support tab, and at the very bottom in a selection that says add additional states. That's all it took! Customer support is 10000000000% better this year. They are very knowledgable.! Deb!

My guess is that the property had a first and a second. The first is on the 1099A the second is on the 1099C Just a guess! Deb!

COOL! That never even came across my mind! She would definitely be making the money work for her as paying down principle, therefore decreasing interest charged would earn her a greater return than just sticking the money in the bank. I truly do appreciate that thought! Thanks, Deb!

That is exactly what I suggested to her and she has decided to do just that. At least this way she can get some benefit of the provision. Deb!

Hopefully someone else has had this problem. When I first installed my program I only installed one state, California. Now I need to install another state. I tried to reinstall the program just like I did last year and I get to the point were I can choose my states, click on Oregon then ok and a box comes up that tells me: Please select which return types you would like installed for your state forms. I'm then given OK as the only option which I select and I'm right back were I started from. Either I am totally missing something or something is wrong. Anyone else have this problem? How do you fix it? Any thought would be greatly appreciated! Deb!

I have a client who purchased her first home in December of 2008. When I explained to her about the $7,500.00 credit and how hers will really only be the no interest loan, we discussed wether to take it or not. I explained that as of now it is a loan, but hopes are that maybe it would be changed to the same program, and perhaps not have to pay it back. If it remains a loan she really doesn't want to take the credit because she really doesn't need the money. On the other hand if there is a possiblity of the law being changed she would hate to lose out on it by not taking the loan. My question is if she chooses not to take the credit, then the law is changed would she be able to ammend and claim the credit then? Any thoughts! Deb!

Rarely have I had a couple fill the worksheet out and it come out correctly. I seem to remember a few years ago they overhauled the withholding tables and in doing so created a huge mess. I had clients who filled out the stupid worksheet and ended up owing taxes at then end of the year, who never owed in their life! I have a strange feeling that something like that will be happening again this year. I'm hoping I'm not asked for suggestions on how to fill them out. Deb!

Thanks again LindaB. You seem to have a good grasp on this subject. I have spent literally hours researching and following the steps to handle these and earlier you confirmed that my handling was correct. Not that I rely soley on others opinions, but it is nice to have someone who agrees with you. At least then you don't feel alone in thinking the way your do! Deb!

I tell everyone of my clients that the refund cycle this year is all messed up and that they should never spend the money until they actually see it in their accounts. Therefore I will not be made to feel guilty of any fees they may encounter to their writing checks against the funds they do not show up when expected. I emphasize the fact that it is just a suggested posting date and that under normal circumstances it should be there but at the same time I explain that I have a client from the last part of January or first part of February that still has not received hers. Deb!

That's the biggest problem. Nobody wants to fight HRB. I have gotten several of their unhappy clients. They come to me because HRB has them owing, yet it's pretty obvious just discussing their situation that HRB is wrong. I sent client back to retrieve her documents, HRB thru a fit and intimidated my client in paying them $75.00 just to get her w-2 and a 1099 back. I had a couple of other clients come to me and after discussing their situation I also sent them back to retrieve their documents. Fortunately these two individuals were not intimidated and went and demanded that their doc's be returned. I've done all of their taxes now for several years. Most people are intimidated by them. Especially our local office. The woman who runs it seems to think that the moment someone walks into her door she owns them. It's a real joke when their ad states that with HRB you've got people. In my experience when you have HRB you could end up with a headache. Deb!

I totally agree, and my constant suggestion to someone who even suggested doing this was to seek legal advice first. But they do not listen, and then I am expected to clean up their tax mess and have to go through all the explanations ect.... Thanks jainen for responding. I had hoped to hear something from you. Deb!

I have one that should have had her refund February 6th. IRS is finally showing Mar. 3. They claim a mistake was made on the return, but I have double checked and I don't see it. It did have the recovery rebate credit and EIC but I used the figure off of their website for the amount of the stimulus payment she received on 08. So I cannot seen the error. Deb!

Thanks for the confirmation. That was my feeling as well! Deb!

Thank you LindaB This is what I have researched, but it always help if someone else can confirm your findings. I have been looking at each one of these on an individual bases but like you said there is no one size fits all. At least one of these I will be going the route of insolvency because of the amount of equity used for other purposes that is owed. But this too leads to me one more question. I have a couple of clients who actually went out and purchased a second home knowing that they would be letting the other home go. They moved into the new home, stopped making payments on the old home, the hold home was foreclosed and the 1099's were issued. It is my thinking that because they already purchased and moved into another home that the exclusion for having to include the foregiven debt as income would not fly under the provision of foregivess of indebtedness of primary home. Am I correct in my understanding of this? I can easily show insolvency as both homes have lost a lot of value since they were purchased and on both of these homes there is more owed than they were worth at the time the debt was foregiven on the first home. Any thoughts! (as to the morality of what they did, I don't agree or approve of it, but that's really not my business. I am only concerned about the tax ramifications.) Deb!