BulldogTom

This was mentioned at one of my update seminars. The auditors realize that they can go back to all prior years and look at the bookkeeping for inconsistencies in the accounting because QB keeps all years in the file. Limit the information you give them to the years at audit. Make up any story to not let them have the full file. Tom Newark, CA

The new owners probably want the faster depreciation on the fixtures. And just to be argumentative, in a restaurant, those stainless steel tables, commercial refrigeration, and commercial ovens and stoves retain their value. And they are all installed and ready to use. Personally, I would not sweat it based on the valuations they are using. It passes the smell test, especially when you add in all the stuff that was not on the balance sheet that is going in to the sale (think knives, slicers, pans, pots, dishes, eating utensils, all commercial grade and built to last a lifetime). Also, you have all the glassware for the bar. It passes my smell test from 3000 miles away. But I will not be signing the tax return. Tom Newark, CA

I will give this a shot at the risk of showing my ignorance. 1. Individuals selling their covenant not to compete seems to be ordinary income to the shareholders. They have no basis in a promise. That is not part of the sales price for the C Corp because it is not selling its promise, the individuals are. That should be a separate sale, with separate documentation executed as a condition of the corporate sale of assets. 2. Inventory has to be addressed. It is a hot asset and needs to be classified as such. Anything about AR? Contracts in progress? 3. Identify the goodwill. Is it a customer list? Name? Process of some kind? Reputation? Website address? All of the above. 4. I assume that as smart as you are, you have not confused book value with Fair Market Value of the hard assets. Just mentioning...because it is something that I need to always remind myself of. I think if you pull the covenant out of the sale, your numbers might make more sense in regards to if the sales price exceeds the FMV of the assets. If it still does, you need to bring that up to the seller. But since FMV is the price at which a willing buyer and a willing seller agree upon, you might be OK if it is not too extreme. I hope this does not sound to basic. I just did not want your post to sit out there thinking no one read your post. Tom Newark, CA

I think I could get behind that. The cautious approach would be to call it start up costs and amortize under §195 after taking the allowed deduction. But the 3 year route works for me as well. Flip a coin, I think I could be talked into either one, depending on the client and the dollars involved in setting up the website. Tom Newark, CA

I kinda disagree with that statement. The way a video blogger makes money is to test out products and blog about them. It is for the purpose of promoting those products so the viewers will go out and buy them after seeing them on the blog. The blogger can get paid by the company whose products are sold. So, in a way, the blogger is trying to drive sales. Tom Newark, CA

This is really cool. Never knew it was there either. I guess I am one of the few, the proud, the uninformed.... Tom Newark, CA

Are you talkin' 'bout Jerome, Peggy Sue the hairdresser's husband from Tennessee? Tom Newark, CA

I found the box on the 1040 to force the Standard Deduction, but I can't find it on the CA return. Any help appreciated. Thanks Tom Newark, CA

Yeah, I forgot about the 1310. There would be a little bit more in there for the 1310. Tom Newark, CA

$130-140. Might cut them a discount because the CGD would be the only entry on the D. Tom Newark, CA

Thanks Debbie. I was wondering how long it would take before the penalty letters started. This will be a cluster as well. Tom Newark, CA

A guy can hope, right? Thanks Judy Tom Newark, CA

TP has SE Health Insurance, but because of the losses in the business, none of it is on the front of the 1040, it is all on the Sch A. Is SE Health Insurance now a non-business deduction because it is on the A? It seems to me that it is a business expense and should retain that character even though it cannot be deducted on the front of the 1040. It is a pretty big deal, as the TP paid over 17K in premiums, and if I can determine that they are a business deduction, I can get a nice refund from carrying this back. Thanks Tom Newark, CA

I am looking to speak with someone in the Fresno CA area about referring a couple of clients. You can PM me if you are an ATX user. I will give you the details. Not looking for any $ from the referrals, just a good home for a couple of clients. Tom Newark, CA

Client is covered at work, carries his spouse on the coverage. Client's kids were on state program for insurance. I have no idea how they got it, because they have 6 figure income for the last three years, but they were on a state program. In Oct, they got kicked off by the state. The 1095 comes in from the state showing the kids were covered for 10 months Jan - Oct. Clients employer 1095 shows Hubby & Wife covered Jan-Dec. So I ask if he got the kids on the work insurance and the husband says they would not pick his kids up until open enrollment in the spring. But wife says they got on sooner. She thought they were covered last year. But his 1095 from his employer does not say that. So, I calculated the penalty because I think they did not have a short coverage gap. Did I make a mistake? Can you not be covered the last 2 months of the year and ignore what is going to happen (or what you think is going to happen) in the next year? Should I have marked the short coverage gap exemption? Tom Newark, CA

Did the client owe last year? I have a couple of these with my clients, but they all owed. I thought it was a good thing. IRS telling them what I have been telling them for years...you need to withhold more. Tom Newark, CA

You have been pm'd. Tom Newark, CA

Yeah, I held onto XP for as long as I could as well. It worked out for me. By the time I moved to 7 it was pretty much bug free. Tom Newark, CA

And there lies the rub. I doubt if any one of us breaks out the portion of the home that is the roof. 10 or so years later, we need to replace the roof and we are looking for a deduction on the old roof for the un-depreciated portion. Most of the time, you are lucky to get a good valuation breakout for the land and the house. Me - how much did you pay for the house. Client - I think about 480K Me - how much do you think the land it sits on is worth? Client - Why? Me - because we can't depreciate the land. Client - the land is worth nothing without the home on it. Sheesh. Everyone knows that.

On this same topic, but a little different. My trusted 4 year old laptop is starting to tell me it is time to upgrade. It is notifying me that the cooling fan is about to go, and it runs a little slower than I would like. I want to get a new laptop, but I really want a Win7 Pro operating system. I know it, it works, and all my software and printers work with it. I will probably need to upgrade my main office computer as well. I don't want to go to Win 10 but I think I need new computers next year. Anyone have a source for really robust laptops that I can get with Win7 Pro? Eric....I will push the donate button for a good reply? (I will push the donate button anyway, but it sounds good). Tom Newark, CA

I have had these issues over the years, and I have found that AMEX is the best at taking care of me. I will not carry a Capital One card anymore after the way they treated me when that card was hacked 8 or 9 years ago. It took forever and they would not talk to me. I cancelled the card after that experience. About 5 years ago, I had to make a quick trip down to LA for business. Last minute deal. Booked my flight the night before and headed for the airport in the morning. Did not have a lot of cash in my wallet because I don't carry a lot of cash normally. Took a cab from LAX to Santa Monica where the meeting was held. Paid for the cab with my AMEX. Did the meeting and flew back home. Two days later, I get a call from AMEX. My card was used in Greece. It was a 5 minute call at most. It was obvious that the only places I used the card was for my flights and for the cab. The charges were reversed and a new card was overnighted to me at no cost. That is what I call customer service. I only use my AMEX when I travel now. I am not a paid spokesperson for AMEX, but I love their customer service. Tom Newark, CA

You need to go through the NOL Worksheet to verify your numbers. Make sure all your deductions are correct for Business versus personal. Only then can you verify that the carryforward to 2016 is correct. In 2014, you should have either elected to carry the loss to 2015, or filed a 1045 to carry the losses back to 2012 and then 2013. If you did not make the election to carry forward, you should prepare the 1045 and see if all of the losses are absorbed in 2012 and 2013. Tom Newark, CA

One of our clients is a "Peggy Sue" hairdresser. She has been with us for several years. We used to do her bookkeeping, but a few years ago she wanted to do it herself. It is always last minute now, and in 2013, she never got back to us with the figures for her tax return. In 2014, we did 2013 and 2014 for her. There was a question about the mileage during those 2 returns, which eventually got squared away. This year, she gets to us on April 10th. As usual, no income statement, just emails with the amounts that she says she earned from the business. There is some back and forth. We get to the last item on Saturday - mileage. Send her a text asking How many miles? We are on our way to have dinner with another client when she calls back. Her answer "what did we do last year?" We have to look. The file is not in the car with us, but now the whole issue from last year gets brought up again. She is upset, we are at dinner with another client, she is texting and calling. When we take the call, she tells us she is not going to come back, just get her this year's return, and she expects us to amend last 2 years for free as well. That is when I needed a "Rita Hug" for her. So after dinner, I try to call back. Get her voicemail. Leave a very polite message that we will not be completing her 2015 return, and we will file the extension which will give her plenty of time to find a new preparer. We will be happy to provide any information from prior year returns to her new preparer, and we will look at 2013 & 2014 and if they need amendments, we will take care of them if we made an error. Get back to the office and check the returns and they are fine. File the extension. Next day, we are at a clients home doing a tax return, and she sends a text wanting to know when she is getting her 2015 return. I text back to listen to her VM. She calls back, pissed off like no one's business. I calmly explain that we will not prepare the 2015 return for someone who is unhappy with our service, that we appreciate the years she has been with us, but based on our analysis, there is no reason for her to be upset, except that we did not have her files in front of us when she called. I got an earful about how we were unprofessional, and how many thousands of dollars she has spent with us. Blah blah blah blah blah..... I really needed a "Rita Hug" for her at this point. On our way home after completing our other client's return, the texts just keep coming. "I want a signed receipt for my prior year returns". Your check is your receipt, along with the detailed invoice we provide. "That is very unprofessional". "I am telling all my family to stop coming to you". Ignored. "I want my proof of extension e-mailed to me" We are mailing it to you certified. "You are unprofessional". I am sick and tired of this tax season. I am ready to be done. Catherine, can you hit a target in California from your front yard? Please say yes...... Tom Newark, CA

I PM'd her but I have not gotten a response. Seems like she has not been on the board lately. Is she on vacation? Tom Newark, CA

Sure there are. That is a specific uniform (to give him that "perfect" look), he had to travel to and from there so the entire cost of his vehicle and all the expenses of the vehicle are deductible because he only uses it for his hugs business, his gym membership to keep him looking like that, his haircuts and all the food he eats that is good for his body and looks. And don't forget the medicinal use of cannabis for stress relief after a long day of work. //s Tom Newark, CA