BulldogTom

You do need to be skeptical. That being said, 8K is not a lot for a bike, seeing as an entry level Harley will run at least 12-15K. IF the tp was only going to take it to shows where he was generating business and leaving it in the showroom of his business as a display, I MIGHT do some extra research to find out if there is a case or ruling that supports the deduction. IF it turns out that this could be a legitimate business expense, I would document every single dollar of revenue that the display (never call it a motorcycle again) generated, and I would definately never ever ever see a single personal mile on the bike. Be very skeptical. Tom Lodi, CA

A leasehold improvement can be fully amortized in the year the company no longer holds the lease to which the improvement relates. Tom Lodi, CA

Please double check my thinking on this. PS (farming) forms with three partners about 15 years ago. Partner 1 holds the PS interest as communitity property. He dies and wife now has partnership interest. The only asset of the ps is land which has not been farmed since partner 1 died about 5 years ago. The land was never deeded to the ps after it was purchased. It is still titled in each partner's name. It was always the intent of the partners to treat the land as an asset of the ps, and it has been included on the 1065 balance sheet every year. Can the sale of the land be treated as sold by the ps? I am pretty certain that the land does not get step up basis, but the PS interest does. However, since the land is the only asset and there are no liabilities or other encombrances, the value of the ps interest is 1/3 of the value of the land at partner 1 dod? Your thoughts are appreciated. Tom Lodi, CA

That means tomorrow is the big 60. Only 5 years to retirement, provided your 401K did not have Fannie or Freddie or Lehman or AIG or Bear Stearns or WAMU or Indymac in it. Happy Birthday. Tom Lodi, CA

NO - I refuse to get old. I am just hoping to get smart. I have a ways to go. Tom Lodi, CA

Thanks Jainen. You are bringing back memories from my partnership classes. I always hated those classes, because it was always about property transactions that were designed to avoid taxes. It is something I don't use very much, and I need some reminders about the rules. Someday I am going to grow up to be just like you!!!!! Tom Lodi, CA

Right - because he does not own the land, just an interest in the partnership. And partnership interests cannot be exchanged. BUT - Could the partnership distribute 1/3 of the property to him in liquidation and then he take his third and exchange it for other investment property? You can beat me with a bigger stick now. Tom Lodi, CA

Here is the situation. General partnership with farm land as the only asset. 3 equal partners. They are selling the farm land and then closing the partnership down. One partner wants to structure his portion as a 1031 exchange (sounds like I need Jainen). The others want to sell and take the profits. Can this partner do this? I am not touching this with a ten foot pole. It is way over my head, but I would like to know if it can be done, and if so, how? You may flog me in public now. Tom Lodi, CA

Just a shot in the dark - I am not sure this will work. Couldn't you contact the BK attorney and work for him? He could pay you, as he needs this done for his client to complete the BK, and I think the BK attorney bill will not get discharged. If the BK attorney adds your fee to his and he pays you, wouldn't that work out for everyone? Again, I have not run into this, so I am just throwing this out for discussion. And depositing your fee into your account is prohibited by Cir. 230 as mentioned above. Tom Lodi, CA

I am with Julie on this one. I think 15 year amortization. Tom Lodi, CA

Mel - the commercial has a guy with a beard, shorts and a floral shirt who works out of an open air bamboo hut with a grass roof on a deserted beach. He sees some footprints on the beach that are not his, and calls CDW to get an upgrade on his security package for his computer equipment. It is kinda funny. Tom Lodi, CA

Every time I see that CDW commercial with the guy who has his office on the beach, I think of Mel in Hawaii. I have no idea what Mel looks like, but I just picture him something like that. Tom Lodi, CA

Absolutely. I prepare the schedule every year and book the interest. We use the rate of interest on the Corp's line of credit as the interest rate. Tom Lodi, CA

Yes, they are an ATX partner and their software is integrated. All forms and transmissions and check printing right from ATX. No issues for us last year, but then again, we do very low RAL/RAC business. Tom Lodi, CA

Like I said, this is coming from the client, and I am not sure what the attorney actually said to them. I am just trying to be ready for when my client drops an impossible situation on me about April 1, 2009. I smell a big retainer and tax prep fee. Of course they will need the tax return in a hurry to get the BK or foreclosures done. Extra speed equals extra fees, and if they are going to consider BK, it means up front payment. Tom Lodi, CA

The issue is they are possibly going to try and keep some of the properties and make another go at the business. So the bankruptcy may not cover all assets. That is where the COD might take place in a workout on some properties and BK on others. It is a mess, and I am trying to figure out what their options are. They are meeting with the BK attorney next week. Like all clients, they don't put the whole team together (attorney, bookkeeper, tax preparer) and go through a complete plan, they talk to one and tell the others, or not. The money from the re-fi's went into the business mostly. Re-fi one to keep up the payments on the rest. They don't live a lavish lifestyle from what I have seen. We will see what they come up with. Thanks for your input Tom Lodi, CA

When you get the representative on the line, if they don't have it in the CAF file, ask if you can fax it to them while they are on the line. It has worked for me. Tom Lodi, CA

Does anyone else find this case troubling? It seems to me that the IRS has gone too far. I understand that many taxpayers have taken advantage of the charitable contribution rules in the past and congress wanted to tighten up enforcement, but when a judge says "I believe you made these contributions and they are for charitable purposes", shouldn't that be enough to justify the deduction? We are not talking about a transaction that can be cast in various forms to produce different tax results (ie like kind exchanges, installment sales). We are talking about a factual situation. Did the taxpayer give cash to a valid charity? It seems to me that if the taxpayer can prove that point, the deduction should stand, regardless of the wording on a letter. I am having a hard time with the logic on this one. I also understand that it is not precedent for other cases, but if the IRS is going to enforce this rule in this manner, and the court is going to uphold the rule, there are going to be alot of unhappy clients in the future. An auditor would be silly not to look for the documentation on that deduction immediately if there are any other issues on the return. Tom Lodi, CA

Gomez_Case.pdf Trying this out. Sorry for the duplicate post of the document. Thanks Eric Tom Lodi, CA

How did you do that? Tom Lodi, CA

This case has to do with charitable contributions and substantiation. Looks like the IRS is truly going to get tough. I wish I knew how to post an acrobat attachment. What really has me interested is the tax court said they believed the taxpayer, believed the charity, and the taxpayer had all the cancelled checks. But because the receipt letter from the church was not provided prior to the taxpayer filing the return, and the letter did not have the required language concerning no goods or services provided in exchange for the donation, the tax court sided with the IRS and the taxpayer lost 6K in charitable deductions. I am planning to highlight this case to all my clients this year in my annual letter. Tom Lodi, CA

I think I heard they were getting out of tax refund loans. I use Santa Barbra Bank & Trust and got my letter the other day that I am accepted for next year. They are a good bank and I like working with them. But I think I only did about 7 transactions in total last year. Tom Lodi, CA

That is a classic. Bravo.

Why are you firing the client? Is it because they don't respond, they bring boxes of reciepts and don't sort them, they complain about the bill? Each reason has a different wording. Here is something general you can use: "Due to re-organization of my office staff and the changes to your tax situation, I do not have the resources at this time to provide you with the services your account requires. I would not feel comfortable with providing you less than exceptional service. Unfortunately, because of caseload and staffing levels, I cannot guarantee your account will get the exceptional service that I require to be provided to all my clients. I will be happy to forward copies of your records to your new accountant for a small adminstrative fee. Please feel free to call me to make these arrangements." Tom Lodi, CA

Hi all, I will be looking this up later today but thought I would pass it by you all for some comments before I start researching. My client owns several properties in his Sch. C business (he kept saying he was going to form a corp). The homes are used as group homes/halfway houses for individuals placed by the county. Mortgaged and refinanced several times. Same story for his personal residence. Long story short - bankruptcy and foreclosure on all properties including his personal residence. The client does have a significant retirement fund in IRA's and spouse has a state retirement and an IRA. When looking at insolvency to escape cancellation of debt income, how do you value the retirement accounts? Like I said, I will be researching this weekend, but was just looking for some guidance before I get started. Thanks in advance. Tom Lodi, CA