BulldogTom

Thanks Jainen. I did not think of that. But the return will need to be paper filed if I do that because e-file will not accept more than 1 form 982. I think I will put the second copy in the file and e-file it without the CA copy. If CA sends a letter, I will call them and ask where they want the difference. If they don't know, I will be happy to suggest a place where they can stick it (on the return - of course). Tom Lodi, CA

Client filed bankruptcy. Has COD income which is excluded under §108. I need to reduce the basis of his remaining assets. Not a problem on the federal side. But on the CA side, he still has some NOL carryover that he does not have on the federal side. There is no equivalent of the 982 for CA that I can find. The software is popping in the NOL in CA and I am sure that is wrong as CA conforms to federal on COD excluded in bankruptcy. How do I show the reduction of the tax attribute in CA that is not the same as on the Form 982? Any help appreciated. I don't have any hair left to pull out or I would be doing that right now. Tom Lodi, CA

Good to know one of our own is going to get some input. Please let them know how frustrating the last two years to have the e-file servers go down at the end of season. The software is good, but the service on e-file has been a real issue. I had a reject that showed up as accepted and did not know about it for a week. I still have one in transmitted status that accepted in February. Tom Lodi, CA

I know this is a little late, but did any of you read the president's return when it was posted on the internet? Something has been bothering me about how it was prepared. He included a Sch. C and listed the business as "Author". There were no expenses on the Sch. C except some minor reimbursements to a publisher (i think that is what it was). Then he paid SE tax on the proceeds from his book. Shouldn't that income from the book be Royalties and included on Sch. E and not subject to SE tax? He obviously cannot be carrying on a business when he is POTUS. Hey, if the guy wants to pay more in taxes, more power to him, but isn't that return done incorrectly? Tom Lodi, CA

I am in the opposite crowd (sort of). I say you take this guy on provided you get a retainer equal to the amount you estimate you will charge for preparation of the tax returns. You can't do an offer anyway until the returns are filed. Then have a separate engagment for the OIC. Bill at the hourly rate and get a second retainer for 1/2 of the estimated hours you will spend. This is going to take some time. If he can pony up the cash for you to get on the job, you might be able to make a few bucks on the returns in the off season. There are no guarantees on the OIC - and he needs to know that. Tom Lodi, CA

Eric, I don't normally go to chat rooms, so if this is a stupid question, let me know. Would we be able to invite someone to chat? So, lets say I have a really nasty tax return with a couple of issues and I want to get some ideas on it. Could I invite KC, Jainen, Old Jack, Catherine and Rita to join me at a specific time to chat about it, while keeping others out of the conversation? Or would it be open to anyone who happens across the session while we are discussing it? I would think that would be really cool to have a private room to go chat in. Thanks for all you do Eric. You are the best in my book. Tom Lodi, CA

This might be a little bit of a stretch, but there was a court case or IRS ruling a while back that dealt with grandparents who were paid by the county to care for their grandchildren so the parent could work. There was no business motive because they were caring for relatives, therefore no SE tax. I don't have the information at my fingertips, but I have it at the office. You could look for that case or ruling and see if you could make that work for you. Tom Lodi, CA

<<yadda yadda blah blah SHUT UP BITCH!!!!>> OMG - that is the funniest, truest thing I have ever seen written on this board. Tom Lodi, CA

I am glad someone looked up rapacious - I had no idea what it meant, but I knew it was not flattering. Tom Lodi, CA

There is a worksheet in the publication. I helped a client prepare one of these earlier this year in anticipation of a letter from the IRS. They ended up with a stack of documents about 1 1/2 inches thick. All bank statements, retirement account statements, appraisals on home, list of cars, loan docs. Basically everything. If the IRS comes calling, they are ready. Tom Lodi, CA

If the prior preparer handled it as a sale of an asset on the 2008 return because that is the date that the client gave it back to the bank, I would do nothing. I would document the file and be ready to respond to an IRS inquiry if it comes. But I would be suspicious of the treatment by the other preparer. Double check that the truck was properly disposed of for the amount of debt remaining on the note at the time. If it was not done correctly, advise your client accordingly. Tom Lodi, CA

Eli, He has "sold" the truck back to the bank. Use the amount of debt forgiven as the sales price and do a disposition just like you would any other asset that has been sold. Tom Lodi, CA

Jack, That "myth" came from a CCH support tech who was on the board for a short time eariler this year. I think she said that it would be 2 more years was the rumor floating around CCH SFS. Tom Lodi, CA

That is a variation on the old line that goes like this: How does a farmer end up with a million dollars at the end of the year? He starts with 2 million. Tom Lodi, CA

Lisa Ann, Try this company. I don't know if it is overkill for what you are looking for, but I have heard it is pretty good. www.harrisbusinesssystems.com The product is called Maxwell. Ask about Computer Ease. I think they are still selling that too. Tom Lodi, CA

Dennis, Please don't think I was putting your software down, because that is the last thing I would want to do. For those of us in the construction industry who have to deal with prevailing wage jobs, we understand what you mean by the complexity. It is highly specialized and not everyone is willing to do it. That takes nothing away from your excellent product. Tom Lodi, Ca

With one child, you are limited to 3K, and since all of that was paid by non-taxable income, there is no credit. You will have to repay the amount you claimed as a credit on your return. Tom Lodi, CA

Dang, I am really feeling left out. I did not take advantage of TRX offer last year, and because I stuck with ATX, I won't get the 40% off this year. I missed the boat. Tom Lodi, CA

How many children? Limited to 3K for one child or 6K total if more than one child. You have claimed too much child tax credit if you claimed $2,900. Tom Lodi, CA

We use timberline. But that is not my choice. It is very old technology and cumbersome to use. The reporting leaves much to be desired. However, I must say that if you know what you are doing, it will do everything you ask of it. It just takes a long time to figure out how all the modules work together. In fact, I am going to my 4th conference on how to use the software next month. I will be looking at setting up direct deposit using the software and getting our vacation and sick accruals to work properly. Tom Lodi, CA

Lisa, What you need is a contractor's software. They are not cheap, but that is really the only place you can find what you are looking for. Unfortunately, you can't just buy the payroll software. You have to buy the program to make the payroll work. Timberline is one of the industry standards. American Contractor is also very good. Intuit has a product called Master Builder that is geared towards smaller contractors but might work for you. How do I know this, because my day job is Controller for a contractor and we do prevailing wage jobs. I have looked at several software packages over the years. Tom Lodi, CA

What went right: Advertising was very effective. 14% client increase. Software was very good (sans bank products and some e-file issues) What went wrong: Bank product debacle on January 14th Getting ATX to help with fee collect to offer something to my clients Efile issues at front end and April 14th (are you freaking kidding me - they did it for the second year in a row). Clients with more and more complex returns and not understanding what is going on. California (need I say more?) More letters to clients, tax increases, confusing withholding schedules, confusing Estimated taxes, HOH questionaires, tax credit reductions. This was a cluster trying to explain why people who never owed are now paying and why their withholding was not enough. Especially if they have lots of kids. A $211 tax increase for every child on your return. Schedule M - the infamouse question - Did you get the $250 payment. No IRS lookup until APRIL??? Tom Lodi, CA P.S. - Jack, this is all minor crap compared to what you went through. My heart goes out to you and your family.

We can only hope Tom Lodi, CA

Thank you. Personally, I don't want this board clogged up with a bunch of taxpayers trying to get free advice. But, it is not my discussion board, and Eric will have to decide who he wants to allow to join. IMHO, there is a board on MSN for taxpayers, and this board should be for professionals. Do you really want all the discussions about "how do I get a bigger refund?" and "how do you make turbo tax work?". I hope I did not make it sound like "GO AWAY", but if retired teacher took it that way, good. Tom Lodi, CA

Retired Teacher, This board was created for tax professionals to network together. We generally are very free with our advice to each other, but we get paid by our clients for our tax expertise. Your issue is really with your tax professional. If he has not properly filed your return, he should fix it. Tax professionals generally take a few days off after the tax filing season to recharge. If you think you want to tackle this on your own, you should get the IRS publications for 1040X. In general, the form is pretty simple to fill out. You put in your return the way it was filed, you put in what it should look like, and you put in the difference and explain why the change. Send it in with any new forms that were not included on the original return and a copy of the original return. Wait 6-8 weeks for the IRS answer. Or, you could wait a few days for your tax pro to answer your call. Tom Lodi, CA