ILLMAS

To win a nobel peace prize, don't you have to do something extordinary to win it?

TP has a house on the market and his mother just sold a property under a 1031 Exchange and has already identified 2 properties to purchases, they want to know if the mother can buy the son's house under the 1031? Does someone know if this can be done, without breaking any rules?

Thanks, I have that box checked off for the properties he owns, but there is a something odd with the AMT tax, client collects about 800K in rent, he has about 500K in expenses and about 165K in depreciation. His only source of income is from his properties, so he has about 131K in rental profits, ATX is calculating 52K for AMT and 10K for tax on 131K, so I there is definetly something wrong here. There has to be something that I didn't check off, can someone please help me. Thanks

Hello, I have TP that materially participates and is a real estate professional, I am having one of those days were nothing goes right, and I cannot find to check off Material Participation?? I transfered the info from Proseries 2007, so you can imagine I had to go asset by asset to make sure the accum. depre is correct.

Hello, I have TP who bought a couple of properties in 2008 (6 of them), out of the 6 of them, 1 he was able to rent in 2008 and the rest in 2009. He is considered a R/E professional, I don't remember the form or election to report expenses in the year placed in service, but he would benefit reporting the expenses in 2009, instead of 2008. Also, this is a partership (1065) return, can someone give the form number. Thanks

Thanks, I put the amounts on a worksheet, however I needed to put the credit amount on line 4 of the worksheet, things are now flowing propertly. MAS

TP just closed on his first home, I brought me the settlement statement and I am going to amend the 2008 income tax return, however ATX does not calculate the credit even if I have checked off the box for buying a home after 12/31/08 and before 12/01/09. Can someone tell me what I might be missing. Thanks MAS

Hello, I have a new client that needs a personal financial statement because he is SE, and the bank is requesting it for a loan he is applying. Here is my dilemma, first his name appears on title of a home he bought with wifes' sister and husband, but his name is not on the loan. They filed a quick claim deed just last year, TP has been making 1/2 of the mortgage payments for the last 15 years, he was not able to get on the loan 15yrs back because he was a non-resident and he had no SS#. Their bank cannot transfer the loan to him through a quick claim deed, the only way he can get his name on the loan is he the brother-in-law sells him the home, they agreed, so my client is buying the home for the balance of the remaining loan. My question is, should I include the home as part of his assets, even dough, his name does not appear on the loan??? TP asked if he qualified for the FTHBC, and I told him no because technically he has been an owner and been making mortgage payments for the last 15years. Your thoughts?

I have a client that is 1120S and each shareholder gets a K-1, they just recieved an IRS notice letting them know they have tax due??? Has anybody heard of this before on an 1120S? I don't want to call the IRS because this client has not paid me for the services since April :-( Thanks

Ok I have a new nonprofit client that came to me because they received a letter claiming they haven't filed AG-990 for the state of IL. NP has been working under a fiscal agent for quite some time already and in 2008 the applied to be a 501 c3 and didn't get approved until March of 2009. I have worked with a couple of NP in the past that become fiscal agents for other agencies not yet approved by the IRS, and usually they manage and report the agencies monies on their financial statements, audited financial statements and tax return. They usually report their assets and liabilities only, but with this NP client it seems they were operating on their own, they had their books and accounting, the fiscal agent only received monies from foundations under their name, then they would give a check to them. NP director inherited all this mess and no one is able to confirm if anything was reported under the fiscal agent books/tax return. So I just want to inform the client that if nothing was reported by the fiscal agent, they would have to report it, but I am not sure if I need to report the years (without 501 c3) on form 1120, since they didn't get approved until 2009? Thanks

A client of mine called me today with a non accounting or tax question, his question was if he can sue two former employees that went to work for another business like his, and prevent them from sharing his family recipes. I am not an attorney nor do I give any legal advice, but the only thing I can think of in his cause, he has no grounds, first he never discussed this with his employess, nor had them sign some type of document from sharing his family recipies with the competition. His main concern is to keep his family recipe a secret.Just wondering if someone has some experience an issue like this? Thanks

Tom I appreciate your help, I am working with the CPA, however he is not to familiar with the clients accounting software, we previously had attempted to credit retained earnings but no budge, system does not allow that to prevent any manipulation, that is why we were trying to go around retained earnings. But now it's been resolved, I spoke with the accounting system engineer and he changed the security temporary, so we are ok now. The CPA is going to disclose the change in the 2009 audit, we were waiting for the IRS auditor to finish before the 2008 audit was completed, but this client is regulated by different states, banks etc... and needed the audited financial statments by the end of the 1st quarter of every year. The IRS audit started in December 2008 and didn't finish to July 2009. Thanks

Thanks Tom, your entry would solve the problem, however I forgot to mention that I am working with audited financial statements for each year. So making that entry would require to reissue audited F/S, client won't be too happy sending out over 60 copies to different entities per year. The goal is to make the adjustment in 2009 on the books to reflect the correct R/E. On the 2008 tax return I am going to adjust the beginning R/E and I am going to have difference in my depreciation between books and tax, but that would be adjust on the M-1. So my concern for 2009 is proposing an adjustment to the books to reduce A/D and depreciation by debiting A/D and crediting depreciation, then making another adjustment to debit depreciation and crediting an income account. But by doing this I over state the income by 200k, unless I create an opening equity account credit it instead of the income account, does this sound correct? Thanks

This is not directly my client, but this client was audited for 2006 and 2007 and the IRS found they were not consistant with the life of a couple of assets. IRS proposed an adjustment to reduce depreciation by around 200K, 100K for 2006 and another 100K for 2007, client since now has paid the additional tax + interest. I had the client adjust their depreciation schedule to match the auditors finding, now the retain earnings is going to be off because depreciation and accumulated depreciation have been adjusted. The 2008 tax return has not been prepared yet, because we were waiting for the IRS to finish the prior year audit and for him not to look at 2008. We know the 2008 is next, but my associate is going to appeal it becuase they have now been audited 2004 - 2007. Anyway, I need to think of a way to adjust retain earnings in a way we don't pay taxes again for the depreciation finding. Here is what I am working with: 2006 Retain Earings before audit $500,000 Retain Earings after audit 600,000 Diff 100,000 Change in depreciation and accumulated depreciation 2007 Retain Earings before audit $200,000 Retain Earings after audit 300,000 Diff 100,000 Change in depreciation and accumulated depreciation 2008 Retain Earnings $300,000 Plus audit adjustment 200,000 Ending Retain Earnings 500,000 My question is, how can I adjust retain earnings and not cause additional tax (adjustment for books and tax)? Any help will be greatly appreciated Thanks in advance

Okay, a TP has his accounting very well organized (don't see many like this), and he is capitalizing 100% the cost of the building, I in turn, I am allocating 10% of land use for tax purposes. ATX is giving me a warning that the amount entered on Sch L for land does not match the amount on Form 4562. I am entering the BS per books, so I am not entering anything under land, however in the cost of building I lowered it by 10% in ATX. I know it's just a warning and not an error, but my BS balances per books, I know if I lower the cost of building on Sch L and put the amount under land, I still balance, but I would like to match it to the financial statements, do you see any potential problems with this. Thanks

I am stuck, my client has a loss in 2008 and he can benefit from using it in 2007 or even 2005 (client just dropped off his paperwork recently), I cannot find the form to make the election. Also, is the election for carryback for 2yrs or 3yrs? Thanks in advance

Hello to all, would someone know if receiving government help disqualifies someone from getting the first time home buyer credit? A potential new TP called me to ask me if she recieves down payment assistance or a special interest rate because she is a school teacher, would she still qualifiy for the first time home credit? Apparently the school district she works has various packages to help out teachers buy a home.

My client properties are currently all under his name and reports them on Sch E, lets say he creates 12 LLC's (single member), he would still report them on Sch E and his tax implication would remain the same? "The tax implications of an LLC are not as beneficial when it comes to losses. You may not be able to deduct all losses for your business because you have chosen to limit your personal liability in the company." By him being a real estate professional, his losses should not be limited, in his case? (Correct me if I am wrong).

Thanks everyone, agree 100% I should let his lawyer handle all this. Again, thank you MAS

Howdy. A client of mine ownes various properties under his name and wants to setup 2 LLC's (per his attorney request) to put the properties under the LLC's. I have a couple of questions regarding this, he can still report the properties on Sch E of the 1040 and would the attorney have to file a quit claim deed to add the LLC to the title of each property? Also, if he has 12 properties can he put 6 properties in one LLC and the other 6 in the other LLC? Any help on this matter would be greatly appreciated. Thanks

I am just wondering if the tax preparer took the client word and not verified if he really was a first time home buyer. I love the R/E agents who advertise the 8K credit, they make it sound like everyone who buys a house qualifies for it.

Howdy, does anybody know if one can invest in companies like Zipcar or lease your car to them? I want to buy an eco-friendly car and would like to rent it out, since I have other means of transportation. Just throwing this question out there to see if someone knows. Thanks

This past tax season I processed 2 tax return with W-7 applications for dependents, both clients received a letter stating the W-7 were file without the 1040, therefore they were rejected. BS both applications were mailed with all the necessary documentation and the original 1040 with the W-2s. So I wrote a letter and attached copies of everything again, everything was stapled together to make sure the client didn't leave any out of the package, clients recieved the letters about two weeks apart. I got a call for the first client letting me know he already recieved the refund but it seems it didn't include the new dependents, so I called the IRS and yes they accepted the original return but denied the W-7 (different department BS), two weeks later the second client calls me for the same thing. Now both have recieved the same letter stating the W-7's have been rejected because the 1040 was not attached and both recieved a refund already. One client asked me not to follow up with the IRS anymore but the other really needs the additional refund, can someone direct me to a department in the IRS that will be able to resolve this issue? Thanks

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What happens to your personal home if you include it in with your bankruptcy filing? Does the bankruptcy cancel the debt or does the bank take the house? Thanks