schirallicpa

I have to disagree with my collegues. You are in business to earn a profit. By making your clients do this correctly, you will maximize your fee. You should call the IRS and the state and tell them what happened (charge for this), then process all the corrected forms (charge for this) then spend the next 2-3 years answering notices and providing information to the IRS and the State (charge for this too). By following my advice, you will positively impact your firm's bottom line enough to afford that new fishing boat.

(this is all tongue in cheek)

Tom

Lodi, CA

I used to work for a guy like that. Purposely put someone in a position that will create more work. He'd do this with AMT especially because no lay person ever understood any of it.

You're awesome. Thank you!

Client received large sum of money from social security in 2008 and subsequently had to pay Aetna for 2006 and 2007 and part of 2008 3rd party sick pay.

Is this simply a matter of amending 06 and 07 and requesting refund?

She had some paperwork regarding the Sec 1341 right of claim. Does that come into play here?

Thanks for your help.

yes.....

I just had one of these too. Although not a beauty shop owner. (Tell me, how much cash income did she report anyway?)

Their response: "But I'm an LLC...."

I have a client that moved to NY mid-yr. Had Michigan income and NY income. Cut and dry - only earned NY income as a NY'er.

Client has high itemized deducts on Fed return and can qualifiy for tuition deduction on NY IT-203B. But the instructions are lame, and I'm CONFUSED!!

The way I've got it filled out, he's getting the entire deduction. Is he supposed to get a portion of the deduction based on the percentage of wage. It looks like as long as all NY income was earned in NY, he's getting it all. But..... the instructions elude to Fed income, and whether all of the Fed income was earned as a NYer.

Just plain Help, please.

How many times have we all been asked if we can't perform the same miracles those clowns on TV offer.

"I owed over $10000 is tax liability and now I only owe $10....."

LLC is a state level designation. Is the business a proprietor, a partnership, or a corp?

Anyway - if its a proprietor, then he needs to make a determination as to business usage and go from there.

If it is a partnership, he can sell it to the partnership or make a capital contribution to the partnership. Then the partnership decides when and how he uses the vehicle for personal reasons. I have seen where a partnership makes a entry to draw for personal usage.

If it is a corp, then the corp can purchase the vehicle. (Don't forget to change registration with the state and insurance info.) Then personal usage - if beyond de minimus - would be considered a fringe benefit included on the users W-2.

The entity would make the decision as to what is ordinary or necessary as a normal business decision.

Sounds like maybe someone is trying to take a write-off that seems a little sketchy?

The employer paid the moving company. This is part of the amt included in the W-2 and grossed up. Isn't that deductible?

If I the employer give you a salary and tax it, then you the employee pay the moving company to move you, you get the deduction.

So if I the employer pay the moving company, and then call it your salary, isn't that the same thing?

It hasn't been identified as reimbursed moving expense on the W-2.

Maybe I need more coffee.....

There should be a Sec 125 type plan for moving!

Any farmer experts out this morning?

I have a farmer client who - like most around here - has had loss after loss on his tax return. Until last year when he showed income. This year he has a loss again.

So I'm thinking, good, I can carryback this loss and get last year's tax back. So, when I figure I just better double check those carryback rules - I discover that farmers can carryback 5 years.

The question is - Do they have to go all the way back 5 years, and then 4, and then 3.........What a pain! Going back 2 is trouble enough. Afterall, the only significant income was in 2007.

Just wondering if anyone knew for sure. My confusions stems from the fact that every thing I read said farmers "can" carryback 5 years, not "must" carryback 5 years. Is there some choice in how far to go back? Not worth researching too much at this point in the game. We can always do carrybacks next month!

Appreciate anyone's input this morning!

Nobody liked my question. I'm bumping it up again.....

I have a lady who has called me twice wanting to know if she does all of the rest of the return, if I will just help her with the one part that she's unsure of, will I only charge her for that form........................

An advance to a partnership can be either a loan or a capital contribution. The advance - if a bona fide debt, should have a fixed pymt date, and provide adequate stated interest. The creditor-partner reports interest income.

Partners make loans to their businesses all the time. But remember the loan increases the partner's basis only by an amount equal to his share of the liability. (Sometimes a nonrecourse loan from a partner may be required to be allocated 100% to that partner. )

If the individual partners reported on their returns properly, regardless of incorrect SS#, then do amendments need to be filed? Perhaps they corrected the SS# themselves on the copy they attached to their return.

If they actually plan to repay, then Loan might work. Don't forget to have the loan agreement in writing with explicit terms and INTEREST.

They should be taking at least a small salary. The loss on the corp would offset the W-2 - well....if they have basis....which it sounds like they don't.

It may even work to their advantage to have small W-2 to show low earnings and take EIC. I have a client who has a s-corp in that situation. Gets almost half his salary back in EIC refund! He's putting the refund back into the business to build his basis back up!

I have a sticky note from a former colleage that has been posted on by board forever that says "fix depreciation under Rev Proc 2002-9." In fact, I have slid this description in on a return or 2. However, when googling Rev Proc 2002-9 it says something about change in acctg method.

Not sure if this is the least bit helpful.......And your numbers are bigger than my little fixes.

Usually your mortgage is attributable to your house, or other buildings, not land. Additionally, property tax is usually mostly on the house, not the land. Our county has a website that lists real property values, as well as tax. On the listing it will indicate value of land vs. value of house. I don't know if your county lists this info so handily, but I would make an allocation based on that. Or sometimes, you're lucky and the lot is taxed separately. But generally, I don't think he should get too much 8829 deduction on real estate tax and mortgage just for a lot where he parks his trucks.

Thats my 2 cents anyway.....

I had not run into this term before: BVO Buyer Value Option. From what I am finding on the internet, this is when the realty company, or some other middle man, takes care of commissions and closing costs on an old home when a employer is relocating an employee. Now, it is also my understanding that those types of costs work into the basis calcs of homes, but usually do not make there way to the tax return when the home is non-business.

Ok = this guy has a "moving expense report" from his employer. It lists among other things BVO backup Payment of $16990. It is listed as a taxable item. It is subtotaled with other items and then grossed up. He says this amount is included in his W2. However, there is no amount in box 12 and no code P.

So if this amount is paid to someone for something, and he's taxed on it, does he get to deduct it anywhere? I'm deducting some of the other items on this list, such as storage and moving expense. But I'm new with BVO, and just looking for someone elses input on it.

I guess I would think that if this amount was used by the employer to help sell the guy's house and get him out here, it wouldn't be taxable. From what I was reading, it was supposed to be a benefit to entice moving, not something to hit the guy with later. The gross up on the report on this amount (16990) is $11352! So it appears that this amount is adding $28342 to his W2.

I guess I'm confused.

anyone got 2 cents out there today?

I think you need to see the originating documents of the trust to determine whether it is complex or not. I think the deciding point is whether or not corpus may be distributed.

I just did one and could not efile with court-apptd rep.

ATX is correct. Deferred comp is subject to the FICA portion, but not the HI (medicare) portion of tax.

I believe a corp must issue a least one share of stock per stockholder regardless of valuation.

Ok - maybe this is dumb question.

LLC is a state designation. A partnership is paperwork filed at the county office. Why is the IRS looking for anything? A partnership agreement can be created and dissolved with no activity and certainly no tax info reporting. The state - depending on what state - may have sucked up an extra fee to dissolve to LLC designation. What does the IRS care of that any more than they care if you got married and turned around and got divorced - especially if there is no income.

I have used your method numerous times. Obviously he paid extra for the timber because it had value. And recorded assessed values - regardless of how accurate they seem to be - are made by town govt. So, therefore must be of some creed.

Taxpayer died in March 08. In Dec 08 credit card company canceled debt and issued 1099C. credit card company reported in deceased's ID #. (In fact, I don't believe an estate ID exists.) Does the 1099C simply get reported on the taxpayers return, even though it was after her death. Or is this an "estate" item. Afterall - the debt was incurred before she died......

Any 2 cents would be appreciated.

thanks