BulldogTom

I think it is somewhere in the 6000 series of the code. I don't have the exact quote, but it goes something like - a taxpayer must maintain sufficient records to prove the deductions claimed on the return to the satisfaction of the Secretary. It is pretty overreaching. The check and balance to this is the right to appeal to the courts as to the sufficiency of the records to prove the deduction. So, if the Secretary says they must have a 1099 to prove the deduction to his satisfaction, then the only recourse is to go to court with your other proof. I am not at the office, so I can't look it up exactly, but I know it has a meaning like that. Tom Lodi, CA

I think it depends on if he has full, unfettered access to the funds, and if he would have to repay them if the deal fell through. Is the deal complete? I think you need a completed transaction before you recognize income. I think you are on the right track. Tom Lodi, cA

Yes, I know you would. And, it would probably be a point of view none of us would have thought of. Tom Lodi, CA

I take that jab while hanging my head in disgrace. Once again the Mighty Jainen shows his superior intellect over the humble mortals of this board. But the OP said it was a divorce decree. If it WAS a divorce decree, then they could not file MFJ, and the work would have been defective. So I am not totally incompetent, just not able to look through the internet to find the true facts before they are posted. Tom Lodi, CA

Got my letter yesterday. Dear valued customer. You think they would be able to at least put my name on it. I put it in the trash. You think they have been reading my commentary on this board and don't want me? Tom Lodi, CA

We are all getting where you are Silverbell. Frustration #1 Client that swears his mail box was vandalized, so he never got the HOH questionaire from CA. But he got the letter that they are disallowing filing status. No problem, get me you kids school records and the birth certificate and doctor records for your new baby. OH - well we used the girlfriend's address to get the daughter into a better school, and the baby is on government assistance, so I don't have doctor records showing she lives with me. What the heck am I supposed to do now? #2 Client is finalizing an audit. IRS agent has sent 3 closing letters because she keeps reviewing the workpapers and finding something else. The last one does not change the tax at all, but the agent wants another agreement. The client freaks out again, like I can make the IRS hire competent auditors. Yet, the client still has not signed the paperwork so we can wrap it up. #3 Client being audited for a early withdrawal penalty. Tax return indicated exception for being disabled. The letter comes, we submit the POA and attach the letter (already in the file) from the judge who determined client was permanantly disabled and send in the response. Client got the letter (I did not - I guess they don't like to send letters to the representative) and it is a Notice of Deficiency. No mention that they recieved our reply (yes I have the return reciept stamped by KC office), just a 90 day letter. Client thinks I screwed up because they did not just drop the case after my brilliant letter. #4 My most anal client - He brings in a 2" 3ring binder with tabs for each section and the completed tax return on top. Every item of income and expense is summarized with supporting documentation. You get the idea. I missed the penalty in CA for underpayment of estimated taxes. I did not click the box to use the short form and the amount did not transfer to his return. He owes an additional $27. He called and let me know that I messed up. I triple checked that return and still missed it. All this hits my desk on Monday. Welcome to the last week of tax season. Tom Lodi, CA

I would love to represent you at audit under that one. I could pick up a billing hour just watching the auditor laugh. Tom Lodi, CA

Wonder if they are putting that rifle in his casket. That is one of the best delivered lines in American politics. Wether you agree with him or not, the man had STYLE. Tom Lodi, CA

Is this the same attorney who wrote the divorce decree that specifies MFJ for divorced couple? I know lawyers think they are special, but now they are trying to raise the dead. Tom Lodi, CA

JB, You have the most "interesting" practice of any of us. Where do they come up with this stuff? Jennifer needs to call her attorney and let you explain the tax code to him. The attorney ought to fix the defect in HIS work for free. A divorce decree does not over rule tax law. Single at the end of the year means filing single (or HOH if qualified child). Tom Lodi, CA

Agreed, but JB doesn't know when the estate year ended. Safer to extend HIS client, the kid, and ask the questions of the attorney in about 8 days and 15 hours. Tom Lodi, CA

I think they are comparing it to the equivalent of the 1040 package only in ATX. Before I upgraded to Max, I think I was paying 350-400 for the 1040 package at ATX. Tom Lodi, CA

Oh My, Get your bibles out because the world is coming to and end. Jainen agreed with me! Either I am getting smart (not likely) or he is getting soft (not likely) or the world is ending (only choice left). LOL. Tom Lodi, CA

I would go with the C. It is an expense directly related to the operation of a trade or business actively engaged in for profit. Just because it was late does not mean it was not directly related. My 2 cents. Tom Lodi, CA

two choices - extend or amend You can assume that the 1041 is not required and his return will be correct as prepared. File it and wait to see if you need to amend. You can assume that there will be a 1041 and a K-1 for him, extend the return and file it when the K-1 arrives. You know what happens when we ASSUME. I would personally extend, because it seems there will be some type of reporting coming from the estate. This is just a suspicion without all the fact. When a lawyer is involved in the closing of an estate, I worry about the taxes. Not all lawyers are tax law challenged (is that the PC way to say it?), but many are. I would wait and do it right once. Good luck. Tom Lodi, CA

Before the worksheet did it for us, we used to put a second line on the D to show the §121 exemption in the amount of the gain. I would think that method would still work, as the worksheet does the same thing if you tell it to show the gain and exclusion. Never did a Casualty Gain before, but I think this is how I would do it. Tom Lodi, CA

ROFLMAO - I want to be like Mike!!!!!!!!!!!!!!!!!!! Tom Lodi, CA

I thought about that (it was the first thing that I tried) but I don't believe that is the way to go. I think I want the 4797 tracking because those losses become deductible to the sister if she ever sells for a gain. Right now she is planning to use as a personal residence (which on sale makes the whole point moot), but if she turns it back to a rental and sells for a gain down the road, those losses can offset the gain. If I mess with the basis or make the loss personal and don't have a paper trail of the amount, 10 years from now it might matter. Who knows, one of you might be her tax preparer and want to save her some tax $$$. Thanks for the idea. Tom Lodi, CA

You have to manually enter them. This has been an issue ever since I started using ATX (2002). I never understood why they did not populate those numbers from the previous year. It seems like a no brainer. Tom Lodi, CA

I have a couple of larger Sch C clients that I make a book/tax comparison with explanations from the book numbers and check figures. I do it every year and just put it in the client folder next to the .pdf of the return. I print it out and put it on top of the clients financials in the file (cir 230 protection). But I don't think it is something that could be shared, as I have a hard time reusing the one from the previous year. Tom Lodi, CA

On schedule d there is a sale of residence tab that gives you a good place to put the numbers to get the recapture. The total depreciation is in the Asset Entry like indyscott said. Tom Lodi, CA

I did not think about adjusting the basis. What I did was to add another line to the 4797 for a gain equal to the amount of the loss and described it as related party loss. I like your idea. I am hesitant to play with the basis though. When I read the master tax guide, the losses can offset a gain in the future for the purchasing party. But they calculate their gain, and then offset it to the amount of the disallowed losses. That does not sound like a basis adjustment to me. I am just talking out loud because I don't know for sure. Thanks for your thoughts. Tom Lodi, CA

Taxpayer sold rental home to sister. Has a small loss. I know the loss is not allowed. Where in the program do I put this? I thought it had to be the 4797, but I don't see a place. Do any of you know how to do this in ATX? Thanks Tom Lodi, CA

Not Martini, Margaritas. I am in a Tequilla kinda mood. With some carne asada tacos. Eli, lets do lunch. Tom Lodi, CA

<<That is true, but EVERY customer knows about the other site and I see it as a VERY big plus that the other site actually has links to this site, which should bring the member count for this site up a good bit. >> But this is your post from another thread. How would you know that there are links to this site if you were not there? And how do you know that EVERY customer knows about the other site. You can insult me all you want, but it don't make you less of a CCH puke. It just makes you a lying CCH puke. Tom Lodi, CA