BulldogTom

I went to one of Drake's sales seminars last year. The product seems solid, but the data entry is just not what we ATXers are used to. It seemed intuitive enough to work with. It was more like the ProSeries that I used for 5 years before switching to ATX. I could make it work if I had to, but I still prefer ATX entry to Drake. Had a sales call from another tax provider who just dropped into my office. They saw my name and location on this board and figured out which tax practice was mine. When I showed them what ATX does for me, they did not have the software to compete. They were basically selling a 1040 only package. It made me realize how much we actually get with MAX (even if CCH corporate sucks). Tom Lodi, CA

There are some new hire credits for targeted groups (veterans, delinquent youth) out there this year. That may be what they are talking about. Tom Lodi, CA

Bert, I am not familiar with PA returns. And I am not going to defend the software if it has a major flaw like that. However, I have found in the past that if you call ATX (right now the lines should not be very busy) and explain that it is not handling a state return correctly, they will look at it, and generally very quickly. Before you chuck the software, you should at least give them a call. Most of the time, if it is a valid state requirement as in your case, they will fix or find a workaround for you. At least they used to before they became CCH. I have not had an opportunity to test this since the sale to CCH. Tom Lodi, CA

Yep. Thats my story and I am stickin' to it. Fact, the vehicle is no longer in the possession of the seller. Fact, the vehicle is now in the possession of the buyer. Fact, the debt on the vehicle has been assumed by the buyer. Fact, the buyer now has responsibility for the registration, insurance, and maintenance on the vehicle. Fact, the seller no longer has the use or enjoyment of the vehicle. Still looks like a completed transaction between a willing seller and a willing buyer who are not related to me. Unless there are other facts that we are not aware of, the disposition of business property has taken place and the adjusted basis and selling price can be established. Tom Lodi, CA

I love it, but if I retold that in public out here in CA, I think I would be jailed. Tom Lodi, CA

The term "Fire Sale" comes to mind. If you need to sell something in a hurry, and you have a willing buyer, I would think it is reasonable to discount the value of the item for the "time is of the essence" value of completing the transaction. I would take it at face value. Sale of a business asset for the debt assumed by the buyer. Tom Lodi, CA

That was easy. I called the 866 number on the IRS website, did not wait on hold at all, they asked for my EFIN and updated it while I was on the line. 2 minutes total time. I can now e-file all forms. Sweeeeeet. Now I have to take back all those nasty thoughts I had about the IRS. Tom Lodi, CA

Back in early February, a potential new client calls me and wants to see if I would be a good fit for him to prepare his taxes. We talked a little and it turns out they have a small s-corp. We set up a meeting and he and his wife come in to interview me. OK, so far so good. They tell me the company books are in good shape and it is a small little business that she runs. CPA is charging them too much. He works, they have a sched A, nothing sounds like it is going to be too difficult. We set up an appointment for her to bring in her books and prior year tax returns the next week so I can get this going. She calls the day she is supposed to come in and says she has something to take care of for her business and won't be able to make it. No problem, just drop off your stuff and I will get started. She agrees to bring it in that week. Then nothing. A whole month passes and nothing. I figure they went back to the CPA. And last night I come into the office and here is a stack of papers from her. The S-Corp return is due on Monday. A sweet little note says she is so sorry this is late, but it should be no problem. The books are a mess. They show negative AR, there are notations that expenses were not really paid until Jan 2010. The equity section of the balance sheet is a mess with loans and draws (s-corp - draws). The company has lost money every year. Then I pull out last year's individual return. They are carrying forward NOL's, they have capital loss carryforwards and credit for AMT paid in prior years (from the Dot Com bust). He is using an office in the home for his work. They are depreciating travel trailers for his work on sch A, and they are pulling cash out of the retirement accounts to float the business. It looks like three loans on the home, but one may be on the S-corp books. Simple little return. Yeah - right. No, I am not going to tell them to go elsewhere. I am going to stay up every night and work through the weekend if I have to, but I will get this done. I need the clients. And yes, I will charge them less than the CPA so they come back. Thanks for letting me vent. Tom Lodi, CA

I should know this - but I don't. I have always paper filed my entities because I didn't do any when I first started, and I don't do many right now. But I am starting to get more and I think I need to start e-filing these returns as well. When I became an ERO, they did not even allow you to e-file partnerships, corps, and s-corps. I think they had a period of time where you needed to add those entities to your ERO number to file them, but I never updated my ERO application. Is that still the case? How do you do it? Any help is appreciated. Tom Lodi, CA

The decedent is not my client, and her husband is the executor and sole beneficiary of the decedents estate. He is located in Texas. I don't think he will be coming to me to file his gift tax returns. Thanks for your confirmation. Tom Lodi, CA

That is true. But the way I see this, my client recieved a gift of 150K (no taxable income, no gift return on that transaction). She then gave more than the 13K excludable amount to others, hense she is now the donor and has a gift tax return filing requirement. Tom Lodi, CA

I have done the class tracking in QB to separate divisions of the income statement that need to be reported separately to outside entities. It is not real easy to manage the reporting on it, but it can be done. I don't know how you would divide the Balance sheet using classes? That would take some time to figure out. They need a bookkeeper. A good one. That costs money. Keep raising your fee. Maybe you can get them high enought that they see the value of a bookkeeper. Tom Lodi, CA

Client's sister was dying and wanted to give some cash to her 6 sisters. Did not believe her husband would carry out her wishes, so before she died she gave my client a check for 150K and asked her to distribute evenly between siblings (25K each). Notation on the check was to distribute to my sisters. Client cashed the check before her sister passed (believing her B-I-L might stop payment on the check). A few weeks later the sister passed and my client distributed 25K each to each of her 5 sisters. I believe my client (single, darn it) has to file a gift tax return because she accepted the gift in full from her sister and then distributed it. Anyone disagree. I would love for this to be a conduit type transaction where I could say it was a gift of 25K each from the deceedent straight to each sister and my client was merely acting as a conduit. I don't think that would fly. Any opinions? Thanks Tom Lodi, CA

Well, yes you can if it is a revokable living trust. In effect, the trust does not really exist until it becomes irrevokable. So, I could put all my assets into a revokable living trust, and all the income would still go on my 1040. NO 1041, NO K-1. Tom Lodi, CA

I just did one exactly like that last night. Took me 20 minutes to figure out what I was doing wrong. Both 8889's were checked for filer. That little box is hidden in plain sight pretty well. Tom Lodi, CA

That is what I think should happen, but with banks just popping out 1099C's to everyone, I thought I would just wait and see what comes seeing as the deadline for 1099C's is Feb 28th. The client needs a few other pieces of information to complete the return, so it won't hurt to wait a little while. Thanks Jainen. Tom Lodi, CA

This has been a really good thread. I appreciate getting to "talk around the virtual water cooler" with all of you on a topic like this. When everyone adds a little bit of what we know (or don't know) it leads to some great discussions. Tom Lodi, CA

Thanks Eli.

Sorry if this sounds basic. Don't do many of these. TP is married to an illegal immigrant who has ITIN. 4 kids. I know they can elect to file MFJ, but they would lose the EIC. Can he file HOH, and claim 5 dependents (4 children and spouse)? Spouse does not work. Thanks Tom Lodi, CA

That ribeye wouldn't happen to be from a cow that is a casualty of the border wars, would it? Hope you are safe down there. Tom Lodi, CA

Taxpayers lost their home to the bank in Sept of 2009. 1099A issued. Non-recourse debt. Basis in home is 420K and loan is 330K. No 1099C issued yet. We are waiting a few weeks to see if the 1099C will come in this year before filing the return. How are you showing this on the return? I know that we have a sale or other disposition of a personal residence and the loss is not deductible. But I want to show it on the return. I used the Sale of Principal Residence worksheet on the D, but it does not flow to the D. So I put it in the input tab as a personal sale and it shows on the D as a non-deductble loss. I think I want it to look this way to prevent inquiry in the future. How are the rest of you handling the 1099A when it produces a loss? Are you just not showing it on the return or are you forcing it to the D like I did? Thanks for your opinions. Tom Lodi, CA

Pacun, I like your thinking. Not sure if it will fly because I have not researched it. The only caution I would give is - we don't know what the tax rates are going to be in the next two years. This administration and congress has been so wrapped up in the HC debate that tax law has been pushed to the side. The administration has indicated new tax increases, but has not made any firm proposals to congress. By this strategy, you are sending your clients into an unknown. I still like the idea of taking a tax deduction this year and paying it over the next two. Tom Lodi, CA

Just add that to the new fee for having a homeowners insurance policy. That one came from our wonderful governator.

No conformity yet. The only way to escape COD is bankruptcy or insolvency in CA. Perhaps we will get some conformity for 2010. Tom Lodi, CA

Crank, the code three would be used if the company that the employee worked for put him on Disability. I have seen this before. When an employee is hurt on the job and becomes totally disabled and the company grants them a disability pension. In that case, the company would be telling the IRS that they know that this employee is totally disabled under their plan and the penalty does not apply. Your situation is a standard tax transaction and appears to be reported properly, and the form is there to eliminate the penalty. I would have the documentation to support the disability claim if the IRS inquires, but it should be a pretty standard inquiry. Tom Lodi, CA