ILLMAS

I forgot to ask about the currency conversion, form 2555 requires to put down foreign income earned, how should i go to convert the currency to US dollars (i look up rates)? Would using today's rate be valid for most recent years and prior years? Thanks

TP is a U.S citizen but lives in another country for many years, he has a family and children, he wants to submit a Form 2555 to declare foreign earned income, however he has no US earned income. I have multiple question: Residency Test TP lives year round out of the country, so what form should be prepared a 1040NR or 1040, again TP has no US income? TP was born in the US. Dependent's TP is married and has children, dependents do not have a SS# or ITIN's (dependents would qualify for ITIN's because of the country they live in), so if the dependents don't meet the requirements then they can be excluded from the return or does the IRS accept foreign personal identification numbers? Form 2555 Since TP does n't have any earned income in the US and form 2555 is prepared, then TP return would be more like an informative return, don't know what good it would do for him, does anybody know how the IRS treats this type of returns. Any other thoughts you might have or suggestions that can help me out? Thanks MAS

Never mind, TP called hes broker and was told you cannot go from mutual funds to stocks, that you can only transfer to the same type of investment. Works for me.

TP changed broker in 2008, she recieved a 1099-B showing the day the stocks where exchanged, fast foward to 2010, clients gets a letter from SS, saying they are going to lower her benefits because her AGI was 89K in 2008. I called the IRS and requested a transcript and I can clearly see that the stocks that were supposed to be transfered or exchange appears if they were sold. TP cost was higher then the sales price so she has a loss, but I am just wondering if the way the first broker handled the transfer was incorrect. TP never recieved a check from the proceeds, your thoughts? Thanks MAS

When I registered to be a paid preparer/e-file/EFIN I had to submit finger prints, I don't think my finger prints will ever change, so I am wondering if I have to resubmit them?

TP recieved an inheritance from a family member, the trust was created in switzerland or his held in a swiss account. The will states that the TP is to recieve an X amount of money per month, TP is a US resident, and the money she is going to recieve comes from an investment account held in switzerland, I was reading the quickfinder and it seems the TP will be responsible in paying taxes on the amount she recieves. It doesn't sound like to me that this an estate or gift tax, your thoughts? MAS

Thanks, I like bare metal restore, I am thinking of buying a new PC soon and I would just like to transfer my info by a simple restore. It seems I would have to purchase a software to do a that type of backup right?

This questions is for those that use an online service to perform backup of your data. Can you explain how ATX client data is backed up? Is the whole program backup, do you have to choose the folder that holds the client data? I really don't like the ATX backup feature, I find it simpler just to export the data files to a folder I created (ATX 2008, ATX 2009 etc...) then I do a backup of that folder. However I don't do this that often, so is why I want to know how that service works for programs that have client files. Thanks MAS

The software I listed above allows to have many windows open at the same time allowing to see different programs at once. See the link for a demo http://www.winsplit-revolution.com/screenshots/videos-demos

Look into winsplit or gridvista. I don't think it can be done without a 3rd party software. MAS

Here is video of my daughter attempting to surf in our living room.

In prior versions of windows, there use to be a folder with icons, today you pretty much have to find them, I believe they are shell32.dll files, and they are all over the place, best bet is to search the internet for free icons and create a folder to easy access.

To change an icon is very simple, click on the ATX 2010, then right click on it, from the list go down to properites, then shortcut and on the bottom you will see "change icon". There isn't that many to pick from, I don't know why microsoft hasn't updated them, I remember some of these icons from the early 90's. After you have installed the software and every computer, you would have to go to each one and change the icon, I don't believe you can make a change at the server level and then pass it on to the rest of computers. Are you finding difficult to find the program when you have prior years on the desktop? This is what I do, I first arrange the ATX icons together 2005, 2006, etc.... and I move the current year to the upper right hand side of the screen because I know that is the icon I will be using most of the time. Hope this helps

Yes he did, but he cashed out in 2008, but here is the problem, I learned this after I posted the questions, TP is 80 years old, he invested 11K in 2005, between 2005 and 2007 the annuity grew to over 13K, then it started going down, until it went down to about 10K, TP wanted for me to amend his tax return to claim a loss on his investment, from the intial investment + the max. growth - cash out = his loss. He tought his loss was from 13K max growth - 10K cash out = 3K, but I explained to him that his loss is only 1K and not the 3K he was thinking.

There is a fee when you transfer a certain amount of money to your account, I haven't used paypal in a while, but from what I remember, if you transfer more then $500 at once they charge you a fee, last time I used paypal was in 2005. https://www.paypal.com/cgi-bin/webscr?cmd=_display-fees-outside

Hello to all, just wondering if anyone is familiar with a MasterDex annuity? I have a TP that had intially invested $11K in 2005, it grew over 2 years, then in 2008 it went down to around 10K, losing about 1K from his intial investment. Now TP wants to amend his tax return to reflect a loss on investment, since this is not stocks, I would use Sch A to report the loss? Here is something I found about MasterDex annuities: BOSTON (MarketWatch) -- A whole lot of people would settle for "some" of the stock market's gains in exchange for a promise that they would never lose money, no matter how ugly the market gets. The entire equity-indexed annuity business is built on just that promise. And while it sounds like a great deal, all too often it isn't. To get a no-lose guarantee, investors often wind up with a hard-to-win-by product like the MasterDex 5 Annuity from Allianz Life Insurance Co. of North America, an investment that sounds good until you get past the simple sales pitch into some devilish details. That's why MasterDex 5, a product that is fairly typical of the entire genre of equity-indexed annuities, is a clear choice for Stupid Investment of the Week. Stupid Investment of the Week showcases the danger zones that make an investment less-than-ideal for the average consumer, in the hope that spotlighting trouble in one situation makes it easier to root out elsewhere. The column is not intended as an automatic sell signal, especially with annuities, which can be the "roach motel" of investments, where your money goes in but it's hard to get out. MasterDex 5 carries surrender charges for 10 years, and the penalty is 15% for anyone who bails out within the first three years. The surrender haircut is more than 6.6% through the first seven years of the contract. Ouch. Some in the insurance business would argue that MasterDex 5 should not be considered an "investment" at all. Although it combines the features of a traditional insurance product (guaranteed minimum return) with features of securities (return tied to an index), MasterDex 5 -- like most equity-indexed annuities -- is not registered with the Securities and Exchange Commission. Buyers plunking down a minimum of $25,000 may think they are buying a regulated security, but they're not. Failing to understand the difference is a problem, as investors who miss this basic issue will have real trouble spiriting out danger in the sales literature. Pat Foley, chief marketing officer at Allianz, sums up MasterDex 5's audience as people "who want tax-deferred growth on their money with no downside risk," and noted that MasterDex 5 fits in somewhere between the buyer's more traditional fixed-income and equity investments. How they work Equity-indexed annuities are a contract between the buyer and an insurance company. During the accumulation period -- the time when the buyer makes either a lump-sum payment or a series of premium payments -- the insurer credits the buyer with a return that is based on changes in a stock index, like the Standard & Poor's 500. The insurer typically guarantees a minimum return, provided the money stays in place long enough. The potential index return is limited; in the case of MasterDex 5, the monthly cap stands at 2.6%. MasterDex 5, according to its sales literature, "tracks point-to-point monthly changes in the market index. Once a year, those 12 months' values are automatically added up and credited, if positive. ... MasterDex 5 can deliver 100 percent of market index growth." The first point is confusing. The second, while true, is highly unlikely. Here's why: Point-to-point progress means you get the index's value, not its total return. Say goodbye to dividend growth; a few percentage points may not seem big, but they add up when an investment is being held for more than a decade. Admittedly, if the index finishes down by this formula after 12 months, your index credit is zero, rather than a loss. But point-to-point also costs you the compounding effect you would normally get buying and holding an index fund. And you'll only get 100% of the index's return if the index never goes up more than 2.6% in any month. Allianz tested MasterDex 5 for the period 1995-2004, and showed that the initial deposit nearly doubled, growing roughly 7% per year; an uncapped investment in the S&P 500 would have more than tripled, with an average gain of more than 12% annually despite the rough years of the bear market. "You can't assume anything, because even the market cap can change," says Michael E. Kitces of Pinnacle Advisory Group in Columbia, Md., co-author of The Annuity Advisor. "Every contract has its nuances and its catches, and you have to read the fine, fine print to find them." In fact, when MasterDex 5 was first introduced in 2004, the monthly cap on market returns was 3.2%. While the first buyers might have been aware that the cap could change, they most likely weren't expecting that big a cut so quickly. One plus to MasterDex 5 is the 5% "premium bonus" you get on the money you plow into it. Foley noted that people like getting what amounts to a 5% return right off the bat. But with the sales person getting a commission that can be as much as 9% on the first premium, and with the money locked up with those heavy surrender charges, it's a safe bet that Allianz can afford the "bonus" without hurting its profit margin. Throw in headache-inducing rules for withdrawals -- pull your money out at the wrong time and you can kiss off a year's worth of gains -- and loans against the annuity contract and you've got a product the average investor almost certainly doesn't understand well enough to actually purchase. "It's for people who are absolutely deathly afraid of losing principal, and those people should be in a CD or a bond," says David Bohannon of Consultants Corner in Louisville. "This takes them out of their comfort zone, and the only reason they get comfortable with a product like this is that they really don't understand what they are getting. If they did understand it, they would never do it." What to consider Every equity-indexed annuity is different, with unique quirks to consider. As a result, consumers should ask their agent or broker plenty of questions before investing -- or they should hire an independent insurance consultant to review the contract before plunking down so much money. Here are some basic concerns that financial advisers suggest reviewing before signing the deal: What is the annuity's term? You most likely are tying up your money for at least five to 10 years, but you need to know the expectations up front. What happens if you want out early? Surrender charges can reach double digits, but it's more than that. In some contracts, if you pull money out, it goes against your balance from the start of the policy year, meaning it can cost you 12 months worth of gains. Some policies credit just a part of your earnings. And, depending on the timing, getting out early can mean taking a loss. What exactly do you earn when the market goes up? The percentage rate you earn (called the participation rate) may change from year to year. You want to know what your share of any gains is going to be, and find out how you would be notified of any changes. Are there limits to how much you can earn? Sometimes, equity-indexed annuities put a cap on how much you can earn during the year. It pays to know this upfront. What happens if stock prices decline? This depends on how your annuity is indexed. Since the purpose of an equity-indexed annuity is to protect you from losses, you want to see either no loss or a minimal gain. Either way, you want to know what kind of downside protection you are getting, because that's what you are paying for. Chuck Jaffe is a senior MarketWatch columnist. His work appears in dozens of U.S. newspapers.

No, your team already has Ocho Cinco LOL, just look at the Bear's schedule for next week: http://www.unwind.com/jokes-funnies/sportsjokes/bearsschedule.shtml

Please have your son come and play for the Chicago Bears :)

Yes I forgot it should be treated a PSC and he has to pay 35% tax rate.

Ah you think you see them all, it seems the TP was so well advice that he is skipping on paying SE taxes. TP is a real estate agent, he setup a corporation (S-corp), he got paid and didn't draw a salary, profit is reported on the K-1, is there a way to calculate SE taxes, I believe if he gets audited, IRS is going to hit him for avoiding payroll taxes. On his personal income tax return he is only paying income tax from the profit on the K-1. Your thoughts?

Anyone?

A new TP came to see me last week, he started a C Corp in 2007 and had no activity until 2009. I was wondering if I only prepare 2009 return as an initial return and might as well make the election to be treated as an 1120S, TP has not filed his personal tax return. Your thoughts? Thanks

I guess this part of the IRS being more friendly. This past monday I participated in the first meeting of an audit for one of my associates client (Form 1120) that has been audited for 2005, 2006, 2007 and now 2008 and possiby 2009 (depending on what they find in 2008). The auditor told us the IRS is taking new approaches and is trying to be more friendly then before, supposely is this something new because of the bad rep the IRS has always gotten, she took the time to talk to us about "Your rights as a taxapayer", the examination process (she showed blank IDR's and explained what they were), privacy act and talked about your appeal rights. She talked about Fast Track Settlement (www.irs.gov keyword Fast) and something new I had not seen in prior audits before, a sort of affiadavit for the taxpayer to sign and to commit to provide requested information within a certain amount of days the taxpayer decides, for example if you write 10 days, then the auditor expects the requested info in 10 days for all the requests, however they can allow you more time if you notify them. And finally customer service, the assigned agent will be a one stop shop, for example if you recieve a notice from the IRS non-related to the actual audit, you can deal directly with the agent instead of calling the IRS. If you have time, you can read the following publication to learn more about the new steps the IRS is taking: http://www.irs.gov/pub/irs-pdf/p4837.pdf MAS

Just wondering who are they auditing the client or the tax preparer? I hear compliance and research, why don't they just call it an audit, because at end they are going to have findings if the tax payer cannot provide support.

I agree, you don't have to reinstall it, the archive cd comes in handy if you buy another computer and want to move your clients and don't have to go through the whole online update process.