ILLMAS

I am not a dell user, however I would recommend the optiplex 780 series with Win 7 professional 32bit, these work horses are built for businesses so you don't have to worry about games or extra software being install on it, the only problem I see you don't really get any savings if you buy Microsoft Office from them, it's pretty pricy but can be bought for cheaper somewhere else.

New TP came to see me, in 2007 he bought two personal residence in two different states, he lost his job and eventually lost both houses and also filed for bankruptcy and included both homes. Fast forward to 2010, he recieved a 1099-A for one of the homes he let go in 2008, and the 1099-A is for 2010 which I am including in 2010 tax return under form 982. I asked him about the other property and he said he never recieved a 1099-A or heard anything from the bank, well I recommend to him to let me go ahead and request a transcript of his return from 2007 to 2009 and see if indeed the bank had issued one to him for the second home. I recieved the transcripts today and I do see he did recieve one in 2009 and he didn't report it on his tax return, if I were to amend his tax return I would only add form 982 which would make no difference to his income tax return, so I wanted to know if 2009 should be amended just to include form 982 or just leave it as it is? Your thoughts?

Any update why it came out early?

I don't believe she has to mark all corrected, just the new one or she can mark all of them corrected, however it won't make a difference to the recipients if the amounts, name, SS# and address did not change from the original issued. In this case since she probably did them by hand, them she would have to redo all.

Wow, all these business pretty soon will be UP IN SMOKE!!!

That's correct, normally starting NP start as a 1120 for tax purpose, once approved they would file a 990. Why not have your client file a 990 and report "for profit" income as taxable income on the 990, same goes for expenses. Can your share the reasoning?

This the first 1099-C I am going to be doing for a client this tax season, just to make sure, there is no specail form to report the 1099-C & A? Also, if the property given up was his main home and went through bankruptcy, then there is nothing else to report. Cancellation of debt was under $100K. I am looking at instruction and from I read it seems the client does not have to report the cancellation of debt, your thoughts?

Not good, but as they say don't write checks if you have the money. Have the TP call the IRS to cover the bank charges. JK. All kidding aside, TP should of known not to write checks if he/she did not have enough to cover, not much you can do for them.

There is a box the you check off "CORRECTED" and yes she would have to redo all of them and re-issue them, however it makes no difference for the recipients that the received the correct one in the first place.

Thank you, I do have all that info of when I prepared the new basis, I just did not know where to start.

TP sold an investment property in 2006, he deffered the gain by doing a 1031 exchange and using about 100K as a down payment for another investment property. In 2010, he filed for bankruptcy and he forclosed on the property. Now since he deferred the gain on the sale back then, is the TP on the hook now for taxes on the 100K? Anyone?

Will verify with TP but I believe she was making deposits and checks from the corporate account, it seems she notified the state agency of the new corporate account but never changed from SS# to FEIN.

TP in prior year has run a daycare out of her house (Sch-C), last year she told me she had incorporated because another person who runs a day care recommended to her and even helped her fill-out everything needed to incorporate. I told her then, she had to open an account and start writing and depositing the money into the corporate account, today she brings all her paper work and she never notified the state agency to use her FEIN from the corp, so she has a 1099 under her SS# for subsidies the state paid her. Also, since she is a day care provider, another state agency pays her self-employment health insurance, however she was on the payroll for most of 2010 (on the corporation), she recieved a 1099 Misc for the value of the health coverage, last year I would report the premium under Self-Employment insurance and the 1099 amount as other income, basically it was a wash. I don't know if I should just include the health insurance premium as income only, and forget about the self employment insurance? Also, the day care 1099 is for a large amount, I already adviced the client to correct it with the state, however I know that the 1099 can be reported on the corprate return, then just straighten it out with the IRS when I notice comes, but I really don't want to that because I don't want to spend more time later on. I quit, no I have 3 more hours to go :(

IRS agents cannot prepare tax returns for others, they are breaking their own rules LOL :)

Materiality - Amending a client return for $20, $30,... $500 and to charge him a minimum of $150 to amend a return, you decide if it's worth it? Now here is the question to you, what do you consider materiality? Any where you look (books, IRS) there is not such amount as material, you have to make a reasonable judgement as to what is materiality. Last year one of my associates client was being audited by the IRS, you always want to know in what industry the auditor has work, in this particular case the auditor was a tax manager at a CPA firm prior to joining the IRS, once we knew his experience we knew he would want to see pretty much line for line of everything on the tax return. Well that was the case, we gave him support of everything he asked for, now this is a multi-million dollar company, meals of 30K for a +10M company were being deducted 100%, so we were trying to reason with him and telling him the amount was so inmaterial for the amount of revenue the company generated, and he said no, not to him and as the auditor he has the right not to agree with us. Anyway we talked to his supervisor and he agreed the amount was inmaterial in his eyes, but it was the decision of the auditor not let go of the finding. Now if you were get someone who was an auditor for an accounting firm, they have a better sense of what is materiality, because of the years they deal with it and have a better understanding. If I may add, the auditor was a real prick, the day he came to pick up the check for the balance due, the check included amounts for the shareholder and he asked me why the shareholders didn't make a check out from their accounts and if they were going to pay it back to the corporation, what the hell does he care, tax and interest was paid in full!!!

Form updates usually don't require a restart of the program, the restart thing is when there is an update to the actual program. Think of it as Windows update, critical updates require and full restart. MAS

As I suspected, well I will see what the client brings me tomorrow, but I did a google search and found this, it seems the IRS is so great other countries want to copy it: http://www.bir.gov.ph/about/about.htm

A client of mine, today recommend a friend of his, that wants to claim her 10yr daughter as a dependent that lives in the Philippines. He was telling me that they went to the IRS office and the agent told them it was possibly, they just had to fill out the right form and provide the supporting documents. I don't know if this is true, from what I remember the W-7 was for dependents in Canada and Mexico, but if someone knows what form, can you please let me know. Thanks MAS

Hello Tom, I am trying to figure why the vehicles are being depreciated beyond it's use life first? Or they they pickup trucks and campers were bought and the depreciation is for the campers? Or are you trying to match book depreciation to tax? You setup the vehicle as an asset on one of the rental properties, in the case you are trying to match depreciation between books and tax, don't break your head, just book the difference on Sch M reconciling difference. MAS

I think if her employer asked her to get rid of it with the condition of employment is discrimination, my wife works for large corporation and they are really serious when it comes to tattoos, don't show don't tell. I think she is trying to pull your leg and agree her with.

I have seen where the employer pays for uniform rental and laundry for example car mechanics and cooks, i would say NO if they require you to wear black slacks, tie and a white shirt.

Tomorrow I will confirm if this is indeed the case, two weeks ago I did a "what if" scenario for TP, I created a copy to project 2011 outcome with new salary. I will check the the original return and if I see the W-2 info has changed then it definitely a problem with atx, don't know the reasoning but I hope it's a good one. Now that you mention that Pacun, in 2008 I amended two returns to include dependents after itins were approved. I rolled over the amended return because they included the dependents, and guess what they were gone, had to re-enter them again, I just thought I didn't same them.

Today I had one of those TP what wants to know much is his refund, if had not gotten married and included his wife's income. So what I did, I created a copy and removed the wife, her W-2 and changed his return to single etc... saved and explained the differences. Well later on when it was time to efile the original return, not the copy, it gave me an error message and all the wife information was gone, I swear I made the changes to the copy and not original, so now I am wondering if you make a copy of a return, what ever change you make affects the original one? I don't want to believe that happens when you create a copy, but just want to make sure I am not losing it yet.

Today a client called me and was telling me that I am hard to reach, that I am always with a client or working out of the office. He jokingly said he almost wanted to wait in front of my house to talk to me, but recently my attitude hasn't been the same and everything he said got me upset because I do so much for him for free. I prepare zero sales tax for him at no charge, deliver documents to his business and I always take the time to explain to him everything. So I was very surprised to hear this from him, worse I have to wait months to receive his payment. He is stopping on Monday and I want to clear things out, I don't want to remind him of all the frebies he gets but in a professional manner let him know he is not my only client.

I know, but if you cannot find it use "Not listed" in place of COVA and you should be ok.