BulldogTom

Figured it out. Had the wrong asset subcategory clicked in Asset Entry. The simplest things screw you up. Tom Lodi, CA

Client has a storage rental building. They have a truck that they use on site to move things. It is not driven very much. Vehicle depreciated every year. Still in service. Still used in business. The rules are straightforward. In the case of a vehicle to which the luxury limits apply, you can take $1775 per year for the vehicle until the vehicle is fully depreciated. How do I make the software take the 1775 depreciation in the eighth year? Thanks. Tom Lodi, CA

How do I make atx take the additional years at $1775 on vehicles used 100 percent in business but but beyond the 6 years of normal life? I know it needs to go there, but I don't know how to make it happen. Any Help? BTW it is a 1120S return with everything on the 8825. Thanks Tom Lodi, CA

TP gifted two homes to his daughters after his wife's death. Both are rentals. This is what I think should happen: Children must use carryover basis (his basis) for depreciation on homes moving foward. Gift Tax valuation is FMV on the date of the gift. Please let me know if I messed this up. Thanks Tom Lodi, CA

We are going on a cruise this summer for our 20th. Thanks for remembering. You are way too thoughtful at this time of year. Thanks KC Tom Lodi, CA (but in palm springs)

...Is very valuable. Confirmed in Circular E and Pub 15B. Thanks for getting me on the right track. Apprceciate the help. Tom Lodi, CA

So glad you responded. So the Futa wage base is Gross wages minus any 125 if no cash option. 401k is not deducted for FUTA wage base. Example: Paid $1000. Has $100 deducted for 401K and $50 for 125 health (no cash option). Taxable wages are $850 for FWH and SWH, FUTA and SUI Tax base is $950. Do I have this correct? Thanks for the response. Very much appreciated. BTW, I am in CA for SUI purposes. Tom Lodi, CA

When setting up payroll, do you use gross wages or taxable wages for calulating the $7000 limit on FUTA and SUI? Example: Employee is paid $1000 for the week. Has 401K plan that he contributes $100 to. Federal taxable is $900. Is FUTA and SUI based on $1000 or $900? From Circular E under Computing FUTA tax: "The tax applies to the first $7000 you pay to each employee as wages during the year". From Circular E under Depositing FUTA tax: "Stop depositing FUTA tax on an employee's wages when he or she reaches $7000 in taxable wages for the calendar year." I think it needs to be on the $900 in the example above because of the second statement in Circular E. Thanks in Advance. Tom Lodi, CA

The net result will be the same if it goes on line 7 or line 21. While KC is technically correct, there is nothing for the IRS to match to, so why gum up line 7? Put it on line 21 and be done with it. Tom Lodi, CA

I just had a returning client come in. Simple return. Rolled over from prior year. Nothing really different from prior years. When I was reviewing the CA return with him, there was an extra exemption credit of $99 for being blind. He is not blind nor is his spouse. Could not find the place on the entry where you would check for being blind, although I did find the place to check for spouse being blind. I ended up overriding the entry (which I hate to do) but I needed to finish the return. Anyone know where the check box is for taxpayer being blind on the CA 540? This may have been a one time glitch. I have not had this problem at all this year. Wierd. Tom Lodi, CA

I was skeptical of the fee collect product, until last year when Santa Barbra yanked the Rals and I could not get another bank. It has actually been a pleasant experience overall. The form is not too bad and if you train yourself early in the season to fill in all the right entry places, it does not add a whole lat to your time to prepare. I would recommend it. But possibly not right in the middle of the tax season. The first few times you use it you have to find all the little boxes and ID fields and fill them in. It is not very intuitive. But like I said, after you figure out how to fill in the form, it works really well. Tom Lodi, CA

On the first sentence, I can attest that a property can drop that much in value. Thank goodness it came back some, but I am so underwater in my house I will never be able to move. I bought in 2005 and my home was worth 35% of what I paid for it 18 months ago. And remember, the FMV that the bank is reporting is a made up number. They did not do a full blown appraisal. They guessed at what it was worth in a fire sale. Your second point. Because the property was taken, regardless of recourse or non-recourse, there was a disposition of an asset used in the production of income. That is reportable. The only question remains is if there is any cancelled debt. If the form is correctly filled out, then no. If there is recourse debt, then they might get a 1099C later and have to look for a code section to exclude the COD income. Tom Lodi, CA

I am with Pacun on this one. Helping out an inlaw does not rise to the level of a trade or business, therefore no SE tax. Line 21. Tom Lodi, CA

What if the property was bought in the high point in the housing market for 400K with a loan of 320K. 100K allocated to land and 300K allocated to the building. 5 years of depreciation is approx. 40K. Basis is 360k, sales price is 280K (balance of loan due), leaving a loss of 80K. I can make assumptions as well. We don't have the basis information, so we don't know if it will be a gain or a loss, but there will most likely be some kind of gain or loss on the disposition. Jainen did not say to wait, he said to dispose of the property like any other disposition. KC admited she did not take into account the rental aspect of the propery. If it was a personal residence, wait for the 1099C. Tom Lodi, CA

Nope. $1500 total over the two years. If you did his return last year, the amount of the prior year credit will populate on the form. Tom Lodi, CA

I am with Jainen on this one. That is a disposition of a property used for rental activity. Depending on the taxpayer's basis in the property, which chowderhead should have if the taxpayer has been his client for more than this year, there could actually be a loss on the disposition triggering a refund. Tom Lodi, CA

It is not just ATX. At my day job, our CPA is still holding one of our LLC tax returns waiting for the 8825 to be approved. I asked him about it yesterday and he double checked to make sure it could not be filed yet. I had the info to him by Jan 15th and the return was completed by Jan 31st. I think our CPA uses ProSystem fx. I just finished an LLC return last night on ATX with an 8825 for one of my clients and it is an approved form. There seems to be no rhyme or reason to the tax form approvals this year. Tom Lodi, CA

Is it showing up on the 8879? The one I just did included the wording on the 8879 to show she was signing as surviving spouse. Tom Lodi, CA

Thanks Jainen. I think I have been listening to too many of the auto donation commercials on the radio. Tom Lodi, CA

I think some of us may have reached that point in the tax season where the amount of money we are making is not worth the crap we are putting up with. Every year, I cannot wait for tax season to start so I can start filling up my checking account. At some point in the tax season, I can't wait for it to get over. ARE WE THERE YET? Tom Lodi, CA

Client has lots of trucks in their business (C Corp). They drive them until they die and then donate to a local charity. They had 5 vehicles die this year. Fully depreciated. They did not include a donation on the books, just showed as sold for $0 and cleared from fixed assets and accumulated depreciation. The charity sent them 1098C for each of the vehicles with amounts from $1000 to $1500 on each vehicle. I know an individual would be able to take the FMV as a deduction (limited to the amount the charity sold the vehicles for), but I am fuzzy on if a corp can take the same deduction. Thanks in Advance. Tom Lodi, CA

Not sure about non-court appointed, but if you look at the e-file tabs, there is a place to put the name of the representative filing the return for the decedent. I just did one for a couple where one spouse died and the surviving spouse was signing for him. Be sure to do it on both the Fed and the state as the information does not flow from one to the other (got a rejection because I did not fill it out on the state form - easy fix). No overrides are neccessary. Hope this helps. Tom Lodi, CA

Welcome to the board Reese. Thanks for the input. Tom Lodi, CA

As mentioned above, you are still liable for any misconduct you personally do in your business. So there would be no real liability protection if you screwed up a tax return so bad that you got sued. With no real assets to protect, there would not be anything for a lawyer to go after if someone tripped in your office and sued you. In your scenario, insurance is better liability protection than choice of entity. The only reason I can see that you may want to consider another choice of entity is the new health care law. It may work out better for you (if you are providing your own health care) to be a corp in the future. But I would wait for all the details to work themselves out in congress and the courts before you think about that. Just my 2 cents. Tom Lodi, CA

I finally decided to follow the program and went to the disposition tab and filled it out correctly using the proper dates and the program did it for me. Adjusted the depreciation to the right amount and put it on the Sch E. Did not report on the 1040 as a sale. Sometimes you just need to stop trying to out think the software. It is kinda embarrassing that I even posted this. Tom Lodi, CA