BulldogTom

Can't take it. Look at the questions on the EIC tab. "Does the taxpayer (and spouse if filing jointly) have a SS# that allows them to work in the US?" If the answer is no, you do not qualify for EITC. Tom Lodi, CA

wait for the 1099 to come in. Ask the lender for one. They should provide it. Tom Lodi, CA

KC, Could you please update this post when that scam is scheduled for the Lodi Lowes? Thanks in advance. Will be checking the price of wallets at WalMart. Could stand to lose a few pounds as well. Tom Lodi, CA

<<I think that would be very improper. In my opinion, the trust can NOT receive the refund.>> Thanks Jainen. But just out of curiosity, why would it be improper for the trust to take the refund, as it is going to go to that account anyway for distribution to the beneficiaries? Inquiring minds want to know. Tom Lodi, CA

Sorry, he is also the personal representative. If the trust has a bank account, can I just send the refund electronically into the account? Tom Lodi, CA

Taxpayer had a revokable living trust. He passed in Oct. Brother is successor trustee for the trust. Final return has a refund. Shouldn't the refund be made out to the trust? Form 1310 does not seem to have this option. Should I have the check sent in the name of the brother under his social security number? That doesn't seem right when the trust has a tax id#. The trust will also have to file a return based on income earned by the assets of the trust reported on the trusts Tax ID #. Thanks Tom Lodi, CA

Welcome to our nightmare Sam. The Republic of Kalifornia appreciates your input. Tom Lodi, CA

Wow, I missed that part of the bill. Job Security. Tom Lodi, CA

Now that the ANNOINTED ONE has ensured that no American will die from lack of health care, it only seems logical that he should move on to saving the rest of the world. I understand that in 2012 he will be running for President, UN Secretary General, and head of the European Union all at the same time. Tom Lodi, CA

Dear Client, In response to you inquiry on why you must pay this year, I would like to point out that your spouse's business she started the year before made over 25K in profits this year. She did very well, and I am sure that extra money helped out. I would also like to remind you of the conversation we had last year about checking in with me at mid year to see if there might be a need for estimated tax payments. I still have not recieved that call, but you will notice I have included the vouchers for your estimated tax payments for the upcoming year, the first of which is due on April 15th. In response to your second inquiry of whether I could just ignore the 6,800 that you included on your organizer but did not recieve a 1099 Misc for, I am sorry, the IRS does not look kindly upon tax preparers who assist their clients in committing fraud. My license is too valuable to me to risk it on a client who's check for my services bounced last year. As to your third inquiry about offers in compromise, I would appreciate the opportunity to assist you in filing the required documents, however, I will need a retainer of $2,000 up front, payable in cash if you please. Please note that my services in this area will not guarantee any settlement from the IRS, I will merely present your case for you. You will need to list all of your assets, including the value of the Mercedes you pulled up in for your appointment, and the jewlery you were so proud of that your wife was wearing. How much did you say that rock on her finger cost? As a final word of advice, before you begin the offer in compromise process, you should check with your employer, the State of California Franchise Tax Board, about any possible negative impacts to your employment if you proceed with this course of action. Thank you.

I would have deducted them on his Schedule C. Tom Lodi, CA

Taxpayer has COD income. The COD came from the forclosure on real estate used in his business. He has PP Loan Fees on the balance sheet from the financing of the property in 2003. Now the loan is gone. Normally, you would take the remaining balance of the PP Loan Fees in the year the loan goes away. Do I have to reduce the basis in this asset before disposing of it? I think so, but my research is not giving me a clear answer. It says to reduce the basis in depreciable assets. This asset is amortizable. Am I splitting hairs? It is about 5K that I can use on his Sch. C if I can write them off without reducing their basis. Thanks Tom Lodi, CA

The 1099A will tell you. Look for the box that is checked for "borrower is personally liable for this loan" or "borrower is not personally liable for this loan". Tom Lodi, CA

Linda, Client won't get a 1099C. There is no COD income on the foreclosure of a non-recourse loan. Tom Lodi, CA

All Debts included in Bankruptcy. I guess my real question is do I reduce the basis in the assets by the amount of cancelled debt prior to "selling" them on the 4797? I know what the final answer is, I just don't know for certain how to get to it on the tax return. The lack of 1099C's is throwing me for a little loop. The taxpayer qualifies under 2 separate rules for exclusion (business property & bankruptcy) and I don't know the order to apply them. So I don't know for sure if I should reduce basis and then sell or not reduce basis, sell, and exclude debt. I do know that cancelled debt is to flow to the activity that generated it. So all the business debt cancelled should go on the C. Do I show it, and then cancel it on the same form with an explanation refering to the 982 form? I keep coming up with too many ways to do this and not enough certainty on if I am on the right track. Thanks. Tom Lodi, CA

Here is how I am thinking of proceeding: All 6 properties on business balance sheet "sold" back to bank as of date of BK (same as foreclosure date). Recourse loans "sold" for FMV listed on the 1099A, non recourse "sold" for outstanding loan amount listed on 1099A. Cancelled debt included on Sch. C. Gain or loss on 4797. Cancelled debt excluded under BK exception less amount of tax attributes decreased (small NOL) included on Sch. C. Explanation of each calculation attached to return. Personal residence listed on Sch. D. Does this treatment sound correct? Tom Lodi, CA

Thanks KEA Tom Lodi, Ca

Sorry - Having a brain cramp. Does surviving spouse have to sign for deceased spouse? Thanks Tom Lodi, CA

Sam, Do I need to sign up to efile in GA? Thanks Tom Lodi, CA

Yes. The client will love you. They probably need the money if they lost that much. Tom Lodi, CA

New client. Travels with film crews. Worked in GA for less than 2 weeks total over 3 trips to the state. Has just over 1K in w2 wages from GA source. I pulled up the GA 500. Is she a PY resident? Non-Resident? Any things that I should watch for? How does ATX handle GA returns? Thanks in Advance. Tom Lodi, CA

Client is in the business of providing half way home care. Provides half way houses for individuals coming out of various government programs. Had 6 homes in the business. All were purchased under varialble loans with low interest only teasers. All were foreclosed on. Client declared BK and lost his home as well. Here is the twist - the business is still operating in leased properties. The IRS instructions say that the COD income must go to the activity that generated it. But I think exclusion under the BK exception can be elected and that trumps any other election. But wait - there is more. 4 of the loans are recourse and three are non recourse. I just need some clarity on how to proceed. There are not and will not be any 1099C's coming from the lenders. I know KC prefers to wait, but the banks are not following the reporting rules. If the banks are not going to produce the 1099C's, what are you supposed to do? Thanks for letting me vent. Tom Lodi, CA

Why don't you run for congress so we can have reasoned debates like this? And with your tax experience, perhaps you can work on a tax re-write at the same time. I can accept what you just said. I don't think most americans would disagree with helping out the working poor with subsidies for their insurance. How about a tax credit for providing your own health Insurance. Sliding scale like EIC? Or how about allowing a larger deduction for out of pocket health care rather than the 7.5% haircut. These two items would probably bring as many people into the system as what they are doing now. BTW, I omitted my favorite piece of the new law, a dispute resolution proceedure for fighting with your health insurer. That is way overdue. Right now, your only choice is to sue and then go to arbitration. It will be nice to have a single place to go to get some intervention (yes, I am saying I will appreciate this government board). Tom Lodi, CA

KC - you know better. Equating energy star with healthcare is a big stretch. We know the govt screws everything up, but even I can't make that leap, as much as I dispise govt beaurocracy. Tom Lodi, CA

Thanks for posting. I know it must be a busy time for you. Good luck on this. Tom Lodi, CA