schirallicpa

Can I add to the list the agent I had the other day who insisted that the 1099-R distribution was a capital gain and that there would be no cap gains tax on it this year. So the 90K+ that the client drew under his direction was supposed to be tax free. My client was not happy.

'tis the season to be punchy...... I'd like my punch with a little nip in it right now. This coffee probably isn't helping.

Ha - my 9 year old just called because no one showed up to pick her up after the after school event...... That changed my whole day. Now I have to run and get her!!!!

Yes - I have access to the publication. However, I'm not really finding an answer to my question in the publication, hence my posting here. Additionally, regardless of whether or not there is a "written modification" - which I honestly don't know if there is or not - I believe the IRS would prefer substance over form in most transactions. Furthermore, he is not repo-ing.

I suspect "amend" is somewhere in the answer, but I'm hoping not:) Client sold bus. property in 2006 for $50,000 with $21351 gain. Took payments. Reported portion of gain and related interest in 2006 and 2007. Total gain reported is $4502 on 6252. Now - client just wants to get rid of thing when buyer was about to default. Told him to pay 15000 and be done with it - take it or leave it. Rec'd 5000 of that in 2008. (Still waiting on remaining 10K and unsure about that!) So - I'm thinking my reduced price is the 15000 plus the 4502 already received. But this puts me at a loss on the property. Do I need to go back and amend 2006 and 2007, or does this get reported in 2008 as a loss now. And the stinger is - they may be defaulting in 2009 after all. Any direction or thoughts would be appreciated! Thanks.

You'd think by now they would have a way to end the "waiting for server" message or at least stop it from preventing you to go back to work. Boy that erks me!

Had one just a few days ago - Efile must match social security - not W-2. Use the name she has with social security. Mine went thru.

I think that's the NY governor's new anthem!

I have a client that receives 1065 K-1. Then gets NY K-1 and PA k-1, which basically splits the income between the 2 states. PA has its own handy K-1 input sheet. NYS does not. PA just taxes it's own income. NYS does not. Initially, I figured the difference between the state K-1s would go on the NYS return on line 31 with other NYS subtractions. However, looking back at last years return, the previous accountant did not do that. They, instead, took a resident credit for the tax paid on that amount in PA. The tax difference in treating it that way is quite a bit. I'm stumped as to the correct treatment. I'm thinking now that the previous tax prepr was correct, because NY taxes all income unless specifically excluded. BUT - then why different amounts on the NYS K-1 - why wouldn't that just be the same as Fed. ANY NYS people out there today?

It's snowing here in WNY today too. We had 2 days with 40ish degree weather. People were wearing shorts and flip flops! Now - were back to 13 and snow flakes in the air. My girlfriend just sent me this poem this morning: IT'S WINTER IN NEW YORK AND THE GENTLE BREEZES BLOW SEVENTY MILES PER HOUR AT THIRTY FIVE BELOW. OH, HOW I LOVE NEW YORK WHEN THE SNOW'S UP TO YOUR BUTT YOU TAKE A BREATH OF WINTER AND YOUR NOSE GETS FROZEN SHUT YES, THE WEATHER HERE IS WONDERFUL SO I GUESS I'LL HANG AROUND I COULD NEVER LEAVE NEW YORK MY BUTT IS FROZEN TO THE GROUND

Client had annuities thru Prudential and transferred all to another agency. Most of the 1099's simply have a code 6. First question: One of the 1099s was an endowment and is coded as normal distribution. Total dist. $59717; taxable dist. $43221, Emple contrb $16497. He received a check for $27072. (No withholding tax.) Prudential says he was paying premiums from loans from his policy - which accts for the difference. He has no record of said loans. Can I do anything more with this? Or it is what it is. Second question: On 3 of these other 1099s with code 6, the employee contribution exceeds the distributions to the tune of $5253. Perhaps again this is a case of loans paying premiums. Again - anything to do on this? I've never run across this situation before, although I am aware that a loan not repaid would be taxable. It just strikes me odd that he isn't aware of any of these "loans" and Prudential will not provide any more info. And then I've got the agent telling me he's got capital gains tax on the differences.............And his figures are totally different than the 1099. Perhaps I'm chasing my tail? Any thoughts would be appreciated. thanks

My niece just informed me that the bank acct info she gave me for direct deposit for her refund was for 2008. She has a different bank acct now. She thought I just needed the 2008 info.

I've had at least 5 clients this year take out over 6 digits in 401K money. All under the penalty-free age. Only 10% withholding on all of them. None of them qualifying for an exclusion. And they have all been in complete shock that they owe money to the IRS!! HUH? One of them did admit he should have run this by me first.

I saw last year where the IRS was counting errors on professionally prepared returns. One of the biggest "errors" per the IRS was when the preparer used a 1040 instead of a 1040A or EZ. Personally, I don't think that should be counted as an error. I always use the 1040.

Is he "temporarily out of the home", or is he in prison for a number of years?

It's only mid February, and I'm amending my 5th 2007 H&R block return, with 2005 and 2006 returns being gathered up to check them!

6 months of dependency flies. After that, the parents are no longer considered providers of his support - the prison is providing his food, clothing, and shelter. I had one of these a couple of years ago. It makes your chit-chat with the Taxpayer a little rough.

I have one of those magic 8 balls too!! Comes in real handy sometimes. Wouldn't the driveway sealant fall under Land Imprvs, GDS 15, ADS 20.

No - it doesn't fly. That's like paying for your groceries with your business account. Doesn't mean we can deduct tonights tuna noodle. Nails and hair are personal, and not deductible.

At best he needs to check with the issuer of the 1099 to contest the FMV. Otherwise, it's the classic case of "you should have contacted your accountant earlier."

Students 1098T shows tuition of $1955 and scholarship of $5363. I'm thinking this is taxable income to him. Is that right? The thing is, in the spring 09 semester, he has essentially paid that back with their adjustments to his aid. He had to take out more loans to cover the reversal of the overpayment. I'm thinking in 09 he may receive a stmt with an amount in box 6 for adjustments. Which creates an amended 08 return. Do I report as is now, and wait and see? Or I can be like the creep I used to work for, and consider it gravy money for next year with the amended return.

Timely topic - I just had the same situation. Both 1099's from the same payor. I asked him to call Fidelity about it, but after he left the office, it occurred to me to use the 5329. You can input the code for the exception. So I will do that on his return and call him and tell him not to worry about Fidelity. Lord knows they'd screw it up more. They usually do.

This client just started as a corrections ofcr in 2008. He started at the facility nearby, and was shipped to a facility 240 some miles from the first. He expects to be returned to the nearby facility in 2009. It's like they send him to the tougher area as a "break in" kind of deal. He stays down there because it is such a long drive back and forth. Does his situation fly for mileage, meals, and/or lodging for Form 2106. It makes a nice difference on his return. He is not reimbursed for any of the additional expense. I have another client that works for a large turbine plant here and he gets sent to all those middle east countries that I can't pronounce. I take meals and lodging for him while he's over there, as he is not reimbursed for any of it. To me that seems fairly cut and dry. But this one...the corrections officer....I'm looking for some agreement on. If I worked for a CPA firm and was asked to go work for another branch of the office for a while, would I get the deductions? I think so.....(and we all know CPA firms don't reimburse expense!) Thanks for your thoughts. xxx's and ooo's on Valentines Day!

hey - thanks for giving me a bump up. I appreciate it. I had looked at that Pub and hadn't really found what I was looking for. I think the client's concern is whether or not it's taxable income to her. I'm thinking the tax amount would be pretty small anyway. I think that the former employer will pay for the high deductible plan as per usual and that will continue to be a tax free benefit. And what ever that they decide to contribute to the HSA will be of neglible tax effect. And, as you said, would be a wash. I just hadn't seen anything like that before, and really can't find anything black and white. We don't see too many of these in our area yet. One of the bigger employers in the area have them.

Client is 61. I know she'll be eligible for medicare at 65. Then the HSA will be a mute point. In the past, the former employer has kept her on the health insurance policy as an eligible retiree. The former employer is considering an HSA plan to cut costs. Can my client as a retiree still qualify to receive this benefit - the employer will fund the HSA $1500 annually. Will this be a taxable benefit to her? Can she even participate? Or is she out on her own? Not finding much helpful info on internet on this specific topic. Any thoughts w/b appreciated. thanks.