Tax Prep by Deb

In all the past years we were told that the time that ATX receives it from us is the postmark that it has been timely filed. In the past we were given notices to that effect, but this year ATX is a totally different thing. It's basically anybody's guess!

Deb!

I sent a batch out over the weekend and I am now preparing my next batch. Some are definitely going, others I'm getting ready just in case.

I am soooooooo looking forward to tomarrow and beyond! (tomarrow because I will only be in office part day due to out of town Dr. appointment)!

Deb!

I think ATX and IRS is having problems keeping up with the extensions this year.

Atx is stating that there is only one drain @ midnight. They don't say if it's there time zone or ours, but I've got to believe it's theirs.

They also state that although we might submit them before the drain it takes time to batch them (not my words, theirs) and so it's possible that some of the extensions miss the drain and are not drained until the next day therefore taking way too long to acknowledge back.

I don't remember this from last year at all. This year has definitely not been a normal year!

Deb!

Last time I called the FTB wanting to know about a notice I had responded to , the guy that answered the phone asked if it had 'been 9 months yet' because that's how far behind they were. Best, as in the cases where the IRS sends out money when they shouldn't is to not cash the check and then send it back if the notice comes. That way no interest and penalties.

That is exactly what FTB instructed me to do. Fortunately the client had not cashed the check and it was easily taken care of. But I do agree that it appears that FTB runs way behind and that is most likely the case with this final bill. It has been my experience with both agencies for the most part that even if it says final, it isn't always final! Usually if you give them the info they are asking for they will re-open. Not exactly sure if this is the case with an audit but most of the issues I have dealt with are not audit related but rather a seeking for additional information.

Deb!

Because I am just a lowly tax preparer and have nothing else attatched to my name, I do not practice before FTB but I have had a client in just this same predicament.

All I had to do was respond to the questioner and I sent a brief letter of explanation stateing (in my case client missplaced the notice) and in this letter asked that they reconsider based on the submission of the questioneer. Client got a letter of closer returning his account back to the way it had previously been prepared.

Go ahead and have you client get his info together, but I would try just submitting the questioneer with a letter and see what happens.

I have also found calling FTB is extremely easy and they are very helpful. They help me with my clients when IRS won't.

Hope this helps some, and I hope it turns out well for your client as it did with mine!

Deb!

P.S. I went back and re-read your post, and see that it was and already has done what they instructed him to do. Call FTB because my gut feeling is they are running way behind in their processing and the final bill was sent out via computer, whereas the paperwork he sent it takes time to process.

I have had a real problem when I have ammended a return, had the client send in the additional payment, only to have the payment returned several months later, called to find out why was told because there was nothing on their account showing it was due, told them about the ammended return, acknowledged receipt of the return, but not posted to the account until after the check was return, now client receives new bill with added penalty and interest.

A real pain, however FTB is good to work with you to straighten things out!

Deb!

>>Do I need something indicating it was a like kind exchange<<

Generally you do not need to verify your client's documentation unless you run into an inconsistency. However, 1031 is a very demanding section, and it would be best to review the intermediary's contract and other sales and exchange documents as well as the basic settlement statements. As a minimum, you should ask for a copy of the written statement in which he identified replacement property within 45 days. Dealing with large properties and national corporations is bound to present some timing problems.

You also want to be sure the property is truly like-kind. The apartment complex undoubtedly had personal property with it, such as washing machines, office furniture, and maintenance equipment. The replacement property has a land lease and possibly other tangible or intangible assets. The ONLY way to clearly understand these issues is by reading the sales contracts, escrow instructions, and the rest of the whole file.

If they are just bringing this to you now, put it on extension. Unless this was a previous client of yours, there's a reason he isn't going back to his own accountant. In any case, this is beyond your ability to resolve before April 15th.

Thanks jainen,

I have reviewed most of the documents, the only one I really don't have but will request tomorrow is the 45 day letter identifying the property.

Escrow on the apartment closed on June 23, 2007 and the lot, (Ruby Tuesday sits on) was closed on September 13, 2007. So I have a good feeling that all the time tests have been met, but I will request the additional documents.

As far as other personal property, the only thing I am aware of is some old washing machines that have already been completely depreciated. To my understanding and what I see in the documents the only thing they get from the land purchase is just the land. The actual building belongs to a corporation. At least that it the way it appears. They did assume the lease on the Ruby Tuesday ground, but other than that I don't think they got anything else.

But I do have another question. The apartment building was purchased in 1967 and is thus completely depreciated. The apartment was originally purchased for $68,000.00 and there doesn't seem to have been any major improvements other than maintenance type repairs. From the records I have which I have been doing their taxes for several years now is a roof that likewise is depreciated out. This is one of the reasons they sold, they are an older couple and the apartment building is needing some major repairs and they just don't have the energy to complete them.

My question is due to recapture of depreciation they are going to have $68,000.00 that will have to be reported as ordinary gain, correct? Then remainder of the gain gets deferred into this new propertry correct?

I do feel I'm in over my head, and would like to file an extension however I need to tell the how much money to come up with. So if you can give me any help at all I would sure appreciate it. THIS IS NOT MY EXPERTISE!!!!

Deb!

Ok, I have an RDP situation. For federal purposes, one partner is done and filed. The other partner had a big mess with COD income that had to be extensively researched and so at this point he is on extension. Getting refunds. The CA return will be filed joint, and CA offers an automatic extension if the federal one is granted. So....does the 4868 filed for partner 2 cover partner 1 since a joint return will be filed in CA?

California offers a six month automatic extension even if you do not file a federal one. Nothing is needed except that if there is an amount due that it be paid by April 15th. Otherewise nothing needs to be done! So basically the answer to your question is yes they are both covered, but basically it's because California offers the automatic extension without needing to file anything, just be sure if a payment is due that is be paid by the 15th to avoid any penalties and interest.

Deb!

Does anyone know if this software can be networked? That's one thing I do like about ATX, although the network isn't always so good!

I would be interested in this software if it is networkable and if the cost to network doesn't exceed what I'm currently paying.

I'm also still very interested in what Mel can come up with! It's still exciting to me tobe on the ground floor of a new piece of software!

Deb!

According to the e-file report on MYATX site, they are only transmitting the extensions one time a day. They state 12:00 a.m. and I assume they are referring to their time zone. Therefore expect a minimum of 24 hours to receive any acknowledgments for the extensions.

I sent my first batch out yesterday and I too am waiting for acknowledgements, but I won't get to excited unless tomorrow comes and goes and I haven't received them yet.

Hope this helps alleviate any anxieties!

Deb!

Thanks, that what I thought but it always helps to have other's opinions. It really does look like it qualifies, so I will start working on it tomarrow and hope everything goes smoothly!

It's my last major return to complete before Tuesday, I still have several extensions to file, then it's time to rest!

Thanks again,

Deb!

Deb...go into Asset Entry sheet for the property that he sold. On the bottom of the page, click on "Dispositions". This will bring up a drop down box for type of disposition. Click on like kind exchange and the wonderful worksheet pops up and you fill in the blanks. Good Luck

Thanks,

Do I need anything other than the closing papers for both transactions as well as basis and depreciation taken? Do I need something indicating it was a like kind exchange or am I to determine that based on the facts present?

Deb!

Welcome to our Family!

Deb!

Hopefully someone can lead me in the right direction.

I have a client who owned an apartment complex and sold it and purchased a lot that a major chain restaurant is sitting on.

They selected the property within the time frame needed, and completed the transaction on time as well.

So far so good? The new property cost more than the old, so from where I sit it looks like a real like kind exchange. Yes they did use an approved intermediary to complete both transactions.

Here is my question: Is there anything (a form or something, I should be looking for) that shows this was a like kind exchange, or is it something I do through the appropriate forms, that tells IRS that it was a like kind exchange?

Is all I need the closing papers for both transactions, as well as the history, such as cost basis, depreciation taken, ect.. from the property that was sold?

Any help would be greatly appreciated!

Deb!

Thanks for the alert!

Finally it looks like ATX got something right! All my returns are carrying the $1.00 to the right lines!

Deb!

I had four go through; the middle one get rejected in bright red and the last ones just failed to transmit. Of course, we know that the traffic is heavy; but if it were not for this board we would all be stressing out worse than we are.

While it is true the traffic is heavy, it's been heavy in the past, but never have I experienced the problems we have been experiencing this late in the game! I hate to think what April 15th is going to be like.

Deb!

The most disturbing part for me is the lack of communication from CCH. They have a website. How difficult would it be to post an update to keep us in the loop on what is happening or send out an email??

Because that makes to much sense, plus that would be giving good customer service!

Deb!

I e-mailed tech support and actually got a reply within an hours. This is the story they told me:

I do apologize for the problems you are having with transmitting and

receiving acknowledgements.

There has been an issue with the EFC. But, this has been resolved and

it is a slow process getting the files transmitted and receiving

acknowledgements.

I know this creates problems with your business, but please have

patience while the EFC catches up.

If you need further assistance, please contact our Customer Service

Dept at 800-638-8291.

So apperantly there are several different versions of the truth floating around!

I would sort of expect this early on in the season, but all bugs should be gone from the system by now!

Just my two cents worth!

Deb!

Well, if she goes from one job to the other, that would be deductible mileage....

Julie,

It's my understanding that she does her work from the exact same desk. She just does to different jobs, one for which she is paid as an employee and the other for which she is an independent contractor. Therefore I believe all her mileage would be commuting mileage.

Deb!

This might be what you're looking for, I didn't read it all:

http://www.irs.gov/retirement/article/0,,id=162416,00.html

Thanks for the link!

It was what I was looking for and pretty much confirmed my gut feeling, however it's always nice to have something printed out so that when you tell the client they owe lots of money, they can see for themselves why!

Again thanks!

Deb!

I posted this again yesterday on a different thread however I think you will find this link both appropriate and entertaining.

Simply follow this link.

http://www.youtube.com/user/VPYNCHON

Let me know your reactions.

Thanks

Mike Dubin CPA

What a way to start my day!

I enjoyed every minute of it, and I only wish I would apply it!

Deb!

Same here!

I did go to my states web site and verified the two oldest had been accepted. Don't you just love the way ATX keeps us informed!

According to their web site they did have some problems with the 6 and 11 p.m. drains, however I'm reasonably sure that some of mine would have made the 11:00 a.m. drain. It seems way to late in the game for this to be happening!

Just another reason why I will be test driving new programs after next week!

P.S. I've been with ATX for about 10 years now, but I am not at all pleased with how the company has responded to our concerns this year. Yes for the most part the program is great, however if I went into a store to purchase something and I was treated the way ATX has treated us this year, not only would I not buy from them, I would never return!

I do not understand why we think we should be treated differently just because it's software, and just because for the most part our dealings are done through electronics. The same principle should apply.

Oh well, I just needed to vent before I start my day!

Deb!

Glad to be on the giving side for a change!

Deb!

Here goes! I personally think my client was nuts to agree with this, but!!!!!

My client works as a W-2 employee for a company. She has to commute about 30 miles to work each day. My clien'ts employer has asked her to take on a second job with a spin off company and pays her as a non employee and has issued a 1099 for the amount.

The amount on the 1099 is more than the wages paid on her W-2 which leads me to believe that it would be her main job. It is my understanding that she performs her work at the same office. Her only real deductions against the 1099 as I see it is really nothing! She was sure that she could deduct her vehicle from home to office, but I don't see it that way. Am I missing something?

She doesn't work for anyone else but this company and it's spin off. I do not believe she works from home at all, therefore I really do not see any of her mileage as being deductible.

Why she would agree to this is beyond me. Again the way I see it you are either an employee or your not, they seem to want to have it both ways!

Any thoughts would be greatly appreciated!

Deb!

I have a client whose home was foreclosed upon. Just prior to being evicted they cashed in their 401K plan and paid the mortgage to save the house.

They had a 1099R showing the distribution coded 1. I also read some papers that was sent them explaining that in very limited situations the penalty could be abated. One on the reasons listed was severe financial distress. Has anyone heard about this? Is it true I can get the penalty abated for them and if so how? If shown on 5329 what code do I use?

Any help will be greatly appreciated!

Deb!

What it means is that you do not have to send all at once. I choose to hold my state e-files until my federal have been accepted. I learned to do this after I had several federal rejected, due to social security/name mismatches and a few other reasons, but the state was accepted. Therefore I had to ammend the state to correct the mistake. Had I held the state until the federal was accepted, I could correct the state and re-create the efile, therefore no need to ammending later.

If you choose to hold the state, after the federal is accepted it will automatically switch from held to created and you canthen transmit without having to do anything else. I actually love this feature!

Hope this helps!

Deb!