David1980

Short sale, principal residence, California. The IRS information letter from 9/19/2013 might be relevant. https://www.ftb.ca.gov/aboutFTB/newsroom/Mortgage_Debt_Relief_Law.shtml http://www.irs.gov/pub/irs-wd/13-0036.pdf

Only if the return was filed on 10/15. If you file early - before 4/15 - the return is considered files on 4/15 and you have three years from 4/15. If you file after 4/15 with an extension the return is considered filed when you filed it. So file it July 1st and you have through 7/1/14 to amend.

No, it's not required to be reported at all. Unless there is taxable gain. Or if the taxpayer received 1099-S. Though, I can't see any harm in reporting it when not required.

I don't know about the WHY states tax residents on all income from all sources, but I do know it's not unique to NY. All the states work the same way, with some exceptions for things like active military duty or reciprocal agreements or what not depending on state. You'd normally take a credit for taxes paid the non-resident state - obviously that doesn't help much when the non-resident state has no income tax.

You're right, that's a R0000-503. Guess if the spouse SSN is present the name control / SSN do need to match after all. And while removing the spouse SSN would probably work it's not something I'd actually do myself when the spouse SSN is known.

That part is easy enough to understand. The IRS does no checking of name/SSN match for the spouse listed on a MFS tax return unless the taxpayer is claiming the spouse exemption. You don't even need to enter the spouse SSN - the return won't reject for a missing spouse SSN. So the name or SSN could be wrong on both returns but the only one that would be rejected for it is the return for the spouse. Why don't they validate it? Who knows. Probably they felt they were getting too many rejects for spouse name/SSN mismatch when it really doesn't matter that much on the MFS.

The only part that needs to match is the first 4 characters of the last name. Sometimes people don't know what the last name is in the SSA records though - especially hispanic names with multiple middle and last names. It could also be changed - say you have a SS card with your maiden name of Smith. You get married to Mr. Jones and change your last name to Jones. You should get a new ss card with Jones for the last name but let's say you kept the original showing Smith. That is to say, matching what is on the card won't always fix the reject. The other thing to check - the reject could be for the name or the SSN. Perhaps the SSN has a typo in it.

I think preparer regulation is a good thing and look forward to when congress gives the IRS the authority. There are a lot of "preparers" out there that don't understand the difference between a refundable credit and a non-refundable credit. Very basic things. Why would they? No training required, no special knowledge. Anyone can be a tax preparer. They were good at doing their own return in Turbotax so they decided to buy software (or they continue to use Turbotax for their clients) and start doing it for money. True, individuals can do the return on their own and nobody is suggesting the individual taxpayer be regulated. The paid preparer has the potential to do significantly more damage than the individual doing their own return. If I'm a paid preparer that "specializes" in doing returns with lots of non-legitimate deductions I can grow a very successful practice. Deducting things like per diem for fire fighters makes me a popular tax preparer and I can systematically claim bogus deductions on hundreds (or thousands of returns - with hired help) of returns. And it's not that I'd be a dishonest preparer - I just didn't know any better. So I see it as a question of how much impact the different people in tax preparation have. One taxpayer claiming some bogus deductions affects one return. A preparer that preparers hundreds or thousands of returns with bogus deductions has much higher impact. I suppose the regulation of tax preparers

I don't voluntarily provide any additional documentation with a tax return. I see no upside.

Can't put the tax on the parents return. That only works for interest, dividends, and capital gain distributions - not stock sales. So child will need to file return. http://www.irs.gov/publications/p501/ar02.html#en_US_2013_publink1000220709 Responsibility of parent. If a dependent child must file an income tax return but cannot file due to age or any other reason, a parent, guardian, or other legally responsible person must file it for the child. If the child cannot sign the return, the parent or guardian must sign the child's name followed by the words “By (your signature), parent for minor child.”

How do you know it's alimony vs. child support? It's not like they issue 1099's for that. If she provided the number maybe she didn't realize child support is different. Especially if you have a worksheet or something for them to fill out that has a line for alimony and not one for child support (because why would you care about child support). That said, if it is all alimony, is owing $3k really a bad thing? Owing taxes because you had too much income? I would love to have that problem. Oops, I got too much money this last year! Nice problem to have.

You'll want to use exception 1 or exception 3 or possibly both. If the basis was provided to the IRS use exception 3. Enter the short term and long term totals directly to Sch D line 1a/8a. If the basis was not provided to the IRS, but you have a statement containing all the same information in a similar format use exception 1. The IRS even has an adjustment code for you to use to indicate you are doing this - code M. The statement is then either mailed with 8453 or attach as a PDF to the return. If you have some that do have basis reported to the IRS and some that don't, you can use both exceptions. Enter on 1a/8a the ones that have basis reported to the IRS. Nothing else needs to go to the IRS for those ones. Then use exception 1 and mail or attach the statement for the rest.

The client dropped off a Sch B or a 1099-B? These interest/dividends?

http://usacac.army.mil/cac2/Staff/osja/repository/legal_residence.pdf is a good source for information on domiciles for military. The short version is just buying a house somewhere may not change the state of legal residence (SLR). See methods of changing SLR on page 2. That said, it may very well be that the residence has been changed to KS. Or not. Depends on intent. Whether they plan to stay in Kansas permanently and the such.

That's a bit like saying we can't dispute, appeal or control the employers process in determining the amount of wages to report on a W-2. If a W-2 is incorrect I'll continue to dispute that W-2. I'll continue to rely upon IRS guidance in IRS Publication 4681 in determining the amount of ordinary income and gain/loss. I agree to disagree.

I think we agree on the $199,000 depending on why the bank sold it for $1,000. Usually what happens is the bank forecloses and auctions off the home and takes the best offer they get. In which case the sale price and FMV are probably close enough to call the same. They're not going to get the Zillow estimate price in a foreclosure auction but the house probably isn't fixed up nicely like it would be in a regular sale. So that sale price is probably a good number to rely upon for FMV. And there certainly could be situations in which a $200k house now has a FMV of $1,000. If the prior owners used it as an unofficial hazardous waste dumping site that someone will have to pay significant money to clean up for example. So if $1,000 is the best they could sell it for, sure that could be FMV and $199k of cancellation of debt makes sense. If on the other hand someone at the bank liked the house and thought it would make a nice gift for their nephew and convinces someone at the bank to sell it for $1,000 instead of going through a public auction that $1,000 sale price is meaningless. I still believe the 1099-C should show the write off amount for the bank, but I don't believe the write off amount for the bank should be $199k. If that house was worth say $150k the fact they sold it for $1k doesn't give them a $199k write-off. The write off would be the difference between what was owed and what they could have sold the home. The $149k is probably compensation to someone if they sold it to an employee for $1k. I think the situation you're getting at is where I have a house worth $250k and get a 1099C for $350k. Can I subtract $250k from the $350k because $250k is the FMV? NOT ENOUGH INFORMATION! If the 1099-C is correct, the answer is NO! Based on the value of the home and the 1099C my total debt was probably $600k, as the issuer of the 1099-C is required to reduce debt by amounts received (the house) in determining the cancellation of debt amount. Which would also be write-off amount for the bank as you point out - they sell the house for $250k they write off $350k. This seems to be a common mistake made by taxpayers - they assume the 1099C is showing the total debt rather than the cancelled amount (or write off amount). The problem is, what if the 1099C is not correct? What if total debt owed to the bank was $350k, the bank sells the house for $250k, and they then issue a 1099-C for $350k? That 1099-C is wrong, flat out. I would no more report $350k of COD income on the tax return than I would include all the income from a W-2 that had an extra 0 on the end in error. If the form is wrong the form is wrong. What actually happened is what is what matters. Table 1-1 in IRS Publication 4681 is very good for calculating the COD and gain/loss amounts for a foreclosure. I've never run into a situation in which it didn't work. I've seen it used incorrectly, sure. For example with 1099-C where the prior preparer assumed the debt cancelled was the total debt owed and in fact the 1099-C was correct on that one, so they significantly underreported income. If you know the correct total debt and the FMV the table works though.

Have they actually changed domicile to Kansas, or are they just living there because that's where he's stationed?

The 1099-C instructions disagree with that. Box 2. Amount of Debt Discharged Enter the amount of the canceled debt. See Debt Defined and Exceptions, earlier. The amount of the canceled debt cannot be greater than the total debt less any amount the lender receives in satisfaction of the debt by means of a settlement agreement, foreclosure sale, a short sale that partially satisfied the debt, etc. If I owe the bank $500k and they foreclose on $200k property they should be issuing a 1099-C for $300k. Total debt less any amount the lender receives (the FMV of the home) through foreclosure. Table 1-1 in Publication 4681 does the calculation in how much is ordinary income and how much is COD income. FMV of property can affect both of those calculations.

Using part of the home for storage would give them a home office, true. That wouldn't change the commute miles though - the home office needs to be considered your principal place of business in order to make the transportation expenses deductible. Storing goods would just give you some deductible home office expenses, no miles. For an employee you also have the for the convenience of the employer test. It's a good idea for the taxpayer to get something in writing from their employer.

The plumber commercials aren't fall off when it comes to block either. There are some very qualified folks I know working at block. There are also folks who have no business preparing a tax return.That someone got away with it, even in an audit, isn't surprising either. Question is do you care about what's allowed or what can be gotten away with?

'?do=embed' frameborder='0' data-embedContent>> In that thread, Don referred to a March 5 NATP newsletter with information on the reject. http://www.natptax.com/TaxProSolutions/Pages/default.aspx Some Decedent Returns Being Rejected The IRS has discovered a programming glitch involving some accounts for decedents who passed in 2013. Any returns attempting to process electronically for taxpayers deceased in 2013 are incorrectly rejecting from MeF processing. Programmers are looking into the problem and the IRS anticipates a fix in the near future. Until the programming has been resolved, the IRS recommends paper filing the return.

I would have expected a different reject if the dependent's was transmitted claiming their own exemption. Specifically F1040-510 If Form 1040, Line 6a checkbox 'ExemptPrimaryInd' is checked, then Primary SSN in the Return Header must not be the same as a 'DependentSSN' on another tax return. An R0000-902 makes me wonder if the dependent already filed their own return somewhere else or on their own.

The child must be a U.S. citizen, U.S. national, or U.S. resident alien in order to be a qualifying child. If they live in the US or are a US citizen you're fine. If the child is not a US citizen and not a resident of the US they wouldn't be a qualifying child for child tax credit.

There is property placed in service in 2013 with a class life of 20 years or shorter?

Assuming they actually have any vehicle expenses? If the company they work for owns the truck and pays for all fuel and expenses it doesn't seem like the taxpayer could deduct 56.5 cents per mile. If the employee has to provide their own vehicle and is responsible for vehicle expenses then it might make sense to treat the 15 cents as a reimbursement and deduct the standard mileage rate.