BulldogTom

Good information. I had not heard of that before. Thanks Catherine. Tom Hollister, CA

Actually, they are getting better, but being lousy means I will be able to get tickets for their home games against the GOOD SEC football schools who don't care about education. You know, like Auburn (Cam Newton scandal ring a bell) Florida (what are they up to - I think 7 transfers that want to go somewhere else to play because they only care about getting into the NFL), Texas A&M ( bye - bye sophomore Football Johnny). And Vanderbilt is in Nashville, which I could visit on a regular basis and never get tired of going there. Tom Hollister, CA

Both my son's are looking at Carnegie Mellon for their masters programs. Depends on where they get their first jobs. If they stay in the bay area, it is a viable choice for them. Tom Hollister, CA

Backup plans have been in effect for several years. He has applied to the following schools: UC San Diego UC Berkeley UC Davis UC Merced Stanford Rice Cal Poly San Luis Obispo San Jose State MIT - deferred decision to regular admission actions California Institute of Technology - rejected in early admissions action Daddy wants him to apply to 2 more schools, but he does not want to apply: Georgia Tech - "why would I want to go to an engineering school where the mascot is a ramblin' wreck? If it is an engineering school, make the mascot a sports car, not a wreck" Vanderbilt - Daddy wants to go see SEC football games with his son, and I love Nashville. Son - not so much. Tom Hollister, CA

Today was the early decision date for MIT applicants. Patrick was not granted early admission but was deferred to regular admission decisions. Looks like he is not going to MIT. I can't imagine that if they did not want him now, they will want him in the regular process. MIT's loss will be some other university's gain. Tom Hollister, CA

Thanks for the heads up. I did my install from the disk but did not do a program update. I rolled over 1 return and it gave me that crappy error that we got last year that you must open and close the return in the prior year software. I remembered reading this post and decided to check for the update. Downloaded the program update and did the rollover with no issues. Thanks Jack. Tom Hollister, CA

I always do two mailings. Right after Thanksgiving, we send every client a CHRISTmas card with a business card inside. On New Years day we send our letter with a summary of tax law changes, office hours and new office procedures. If the Christmas card comes back, we know our client potentially moved, and we give them a phone call. Tom Hollister, CA

I think the IRS should look at her tip records. Nothing like a friendly audit of your voluntary tax return to find the truth. Tom Hollister, CA

I wonder how long they will continue to print if we don't raise a stink about it? It is clear to me that they are pushing their books onto Intelliconnect so that they can market that product to us. If we have to use Intelliconnect to get the materials that we want and need, they can expose us to more marketing. "Look at all the other stuff Intelliconnect does? Don't you want these things?" Then the bundles will start coming out, and if you want a certain product, you have to buy the bundle that it comes in. Just like the cable companies do. I can't get just the ESPN channels on my service, I have to get 18 foreign language, 12 news, 8 public service, 15 shopping and 20 other channels to get ESPN. Then I have to buy 50 more channels I don't want to get ESPN U and ESPN 3. I think CCH will follow this model. If you want MTG, you have to buy this bundle. The express answers will be in the next level up. I could be wrong, but this is how I see it coming down. They are going to take away what we want, only to give it back to us in the package that they want to deliver it in. Tom Hollister, CA

Judy is the biggest defender of the panda because they share the same political bent. Like most liberals, they can overlook any behavior that they feel advances their political bent, even though the same behavior would be an afront to them when directed at them. Do like I did Jack, just block the panda and Judy from your posts. The board is a much more pleasant place when you don't read anything either of them post. Finding the blocked button, and finding out I can use it on a moderator as well, has been the greatest single find on this board. I don't read anything that they say, therefore I don't get upset at the drivel they spout. My name is Bulldogtom, and I approve of this message. Tom Hollister, CA

Anyone know if the 2013 software will have two separate programs again for tax and PR? Or will they put it back together so it is all in one application? Beta testers, did you see this in the new program? Thanks Tom Hollister, CA

According to my account rep, there will be no printed books (Master Tax Guide, 1040 Answers) this year from CCH. It will all be online only through Intelliconnect. This is another F up from CCH. Those bastards can't shoot straight on anything. Tom Hollister, CA

Not even a twinkle in my daddy's eye yet. Tom Hollister, CA

Catherine, I jspent 3 days at C STAR (California State Tax Agency Representation) this summer presented by the CA Society of Enrolled Agents and we went through this material extensively. In general, CA follows the federal rules, but to a much greater degree of scrutiny. The main issue is control, who has it, even if it is not excercised. Anything that looks like control of the worker's daily activities will probably make them an employee. Providing tools, providing a work space, giving instructions for the way in which the work is to be performed, setting time lines, paying the contractor by the hour and requiring a timecard, the employee not having a business license or professional license. These are all things that would tend to make the worker look like an employee. If you want to discuss in more detail, or would like some of my materials, PM me and we can set something up. Tom Hollister, CA

Smart kids. You should be proud. Most kids don't know anything about how to handle money and finances. A while ago, I had an idea that I could teach a high school capstone class that would run through 4 years of financial life with the students. It would start with writing a resume, filing out a job application, and based on that resume, getting a "job" with a salary. The better the resume and application, the better the pay. Then they would move on to the mundane tasks of life like, filling out an application for an apartment, creating a budget, writing checks for the monthly bills, balancing a check book, filing a tax return, purchasing auto and health insurance, paying rent, and buying and paying for a car. I had all kinds of games included that would throw them curveballs like spinning the wheel of life and coming up with a wife and children, an auto accident, or getting a new job with a raise that needed to be added to their program. Every quarter would end with the filing of a tax return based on the income and deductions they had during the quarter. But, I am not a teacher, so it never came to fruition. But I would still love to see it as a senior class some day. Tom Hollister, CA

Just and update. The CPA called today and said that "there appear to be some errors in the tax return and he will be making the corrections at no charge." Thanks to both of you for helping me understand what I was supposed to see on the return and where to ask the good questions. Tom Hollister, CA

Thanks KC. This is a good piece of news. I just sent it over to our HR department to see if we can implement and FSA for our company. Tom Hollister, CA

Thanks to both of you. Tom Hollister, CA

Jack, You seem to know the most about construction taxation. Do you know what the "lookback" rule is, and what the mechanics of using it for a taxpayer who has used a combination of Percentage of Completion and Completed Contract methods for the corporate tax return. A little background. Taxpayer uses % of completion method of accounting for all work on their books and records. Do not qualify as a small contractor. Average 20MM+ in reciepts over the last 5 years. But they do residential work. On the tax returns for the last 5 years, the CPA Tax Preparer has used a hybrid of POC for the commercial work and Completed Contract for the residential work. It appears this is allowed under the code, but I am still searching for the exact code that allows it. In my research, it seems that when a contractor uses % of Completion on their tax return, they need to do a "lookback" to make sure they did not over/under estimate their costs when determining the POC subject to taxation. If there is an over estimate of costs, then the taxpayer owes interest on the tax that should have been paid in the prior year, and if there is an under estimate of cost, the taxpayer is entitled to interest on the amount of tax they paid that should not have. At least that appears to be how it works. Do I have that right? How / on what form would you see the lookback rule on the tax return? How does one indicate these amount of interest to pay or have refunded under the lookback rules? Are there exceptions that would exclude a taxpayer from being subject to this rule? Should there be some schedule attached to the return showing the calculation? Lots of questions, so little time. Thanks in advance if you can help me understand this a little better. Tom Hollister, CA

Sorry, that was a real hack job on the cut and paste above. What I am trying to say is the bank took the home for non-payment of the mortgage, and I believe the mortgage was non-recourse. Under § 1001 we have a sale or other disposition of an asset. Under §121, the gain, if any, is excludable up to $250,000. But I don't know if I can link the foreclosure to an illegal act (?) or civil violation of a rule of law by the bank for which they paid damages (?) or a civil penalty (?) or just paid them as a business decision to move forward. If that is the case, then I think it is taxable income. The more I type, the more I see the §121 idea as a reach. But I would still like to know if the IRS or Courts have any concrete guidance on this matter? Thanks Tom Hollister, CA

<<Was there an actual sale in direct relation to the foreclosure?>> Well, a foreclosure is a "sale or other disposition" of a property under §1001. <<But was there C.O.D. income, een if excluded?>> I need to go back and check the client file, but if memory serves me, there was no COD income because the mortgage was an original purchase non-recourse mortgage.

Client got a settlement in the mortgage fraud debacle from the bank that foreclosed on her personal residence. The note with the check said they would be issuing a 1099 MISC for the payment. My first thought is this is a legal settlement and it should be taxable income. Then I started thinking that maybe it should be a continuation of the "sale or other disposition" of the home, and might be excludable under §121. Have any of you dealt with this issue and is there any guidance on these payments from the IRS or courts? Thanks Tom Hollister, CA

And don't forget the biggest benefit, that our clients will be coming back to us because we have the info they need to e-file. A client asking for last year's AGI will be a huge tip off that they are looking to go elsewhere. You can get a few extra bucks from them for a prior year return reprint. Tom Hollister, CA

Julie, I think this is an area best left to a financial planner. I know a very good one in the Sacramento area. He is the best I have ever met. You know the issues with the company, and can be valuable as a resource to the financial planner, but I think that is all you should do. I would not go very far with the clients down that road except to make a referral for a planner and offer to be a resource to the planner. Just my 2 cents. Tom Hollister, CA

Did I block three - I thought it was only 2. And you would never be blocked by me. I appreciate you way to much, even if I don't agree with your political views. And I am not a haybaler, but my son is.