BulldogTom

Something does not add up here. Who is handling the estate? Final return of the decedent? I think your answers will come from that person. Tom Newark, CA

The market is hot in the Bay Area. My neighbor (Facebook computer geek) was transferred out of state. Sold his 1150 square foot 3/2 for 620K. Sold in a week. There were people showing up at 8PM to look at the house. It is crazy here. Tom Newark, CA

I think you are on the correct track. I would attack it from the insolvency direction. There is a reason for the forgiveness. It is not just from the goodness of the bank shareholders heart that they modified the loan. Did you check to make sure that the loan balance on the 1099C is not inflated with a bunch of accrued "penalty rate interest"? Could it be that the loan balance before penalty interest and fees was much smaller? If they are cancelling the debt, but that debt is inflated by interest, you might have a mortgage interest deduction for a big chunk of that cancelled debt. Get your clients loan docs and see what the real purchase price of the home was and what the real balance of the loan was. And of course, do a quick look at the assets of the client and see if you can get it all written off under insolvency, or at least a part of it. Tom Newark, CA

Can you imagine a combination of Rita and Catherine....Rita's passion and desire to "cause harm" with Catherine's deadly accuracy? There isn't enough pasture in Texas to keep all the bodies. Tom Newark, CA

What is the non-resident state? What is the date they married? Is all of that 2015 income from the time they were married? I think you have to file the same status for CA as you did for Fed. I know there is an exception for non-resident who was not in the state all year, but I think that depends on whether or not that state is Community Property State or not. If they were married all year, and both states are CP, I think that income will be split 50/50 and it will be subject to CA taxation for the non-resident portion that is deemed to be 50% of the resident's income. I think the pre-nup will only apply to the property that they brought into the marriage, not the income earned by the couple during the marriage. I think the CP laws of the state overrule the pre-nup. In any case, you will be filing the 540NR and the adjustments will be made on the 540 CA NR to get the correct taxable income. I have never done one quite like this. It would take me some time to figure it out. Tom Newark, CA

There is (or maybe there used to be) a e-file helpdesk line that one could call to find out the status of an efile. Back in the early days of efile - when William Tasker used to work at ATX, we could call that number and find out if ATX sent the return, and if not, William would "re-hang" the client file for re-submission to the IRS. Have not done this in at least 10 years, but it used to be common to call the efile help desk. This reminds me, I never used my companion ticket from ATX when the efile system blew up on them. That is a trip down memory lane. Tom Newark, CA

I don't think they meet the requirements - owned and lived in as personal residence for 2 of the last 5 years. They did not own it, the buyer did. They only owned the mortgage paper. When they repossessed, they owned it again, but it was not their personal residence. You need to figure the basis and report the gain. Tom Newark, cA

My original post was the last of a series of back and forth emails to the client, where we explained to her that she could not move the home off of the return without a disposition of some sort. We explained that it could be a gift with a gift return or a sale, but there needed to be a disposition of some kind. The client tried to do this same thing with another rental 3 years earlier, so there is a pattern. So I get an email this morning that says she "forgot" that the rental was on her return and she is sorry for the mis-understanding. Bovine Excrement! Still not doing the return. I don't have the patience for this crap at this time of the year. I have a full slate of appointments today and I just don't need the aggravation. And it is baseball season and the Giants are 2-0 against the Dodgers. That is more important to me than working with a retired teacher who wants to drag me into her redneck probate schemes so she can continue to get her PTC on her Obamacare plan. Tom Newark, CA

Let's see, your rental house is supposed to disappear from your tax return, with no trace, and magically show up on your adult son's tax return? We told you we can't do that. The email she sent back said the wrong thing "as I said, my son will be claiming the rental house this year on his taxes". My response..."We will not play those games and we will not be preparing your taxes. If your new preparer needs anything, like the basis of the rental home that was on your tax return last year, we would be happy to provide it. Best of luck to you." It makes me feel a little bad that she only has a couple of days to find a new preparer and put her story together in a way that they will buy it. Tom Newark, CA

We let them decide. "Do you want to file? You will probably get a letter that I have to respond to and charge for writing the response." They chose. I charge if they file, I give them their documents back if they don't. Sometimes, things change and they come back. Like this year. Client did not have a filing requirement for the last 3 years. Got married and brought her spouse in. Karma. Tom Newark, CA

Yeah, have not heard from Betty Sue in a long time. I think she got hooked on warm corona and ran off with Chaz. Tom Newark, CA

I wonder how my lack of an accent would play in TN? Or if they would think I have an accent? Do they say "Y'all" in TN or is that just a Texas thing? Tom Newark, CA

When the kids are done with college, we are thinking about leaving California. All of my family has left (AZ, OH, VA and CO), and the kids are probably not going to stay in this area after they graduate (oldest is interviewing for a job in the DC area). I don't really like the political and social scene in California anymore. I would like to go somewhere that has a little more "common sense" and has a government treats people with a little more respect. The one time I went to Nashville for some training, I fell in love with the place. I just drove around looking at all the water, green grass, nice large lots, and cheap housing prices. I think I could do that as I grow old. When my mom moved to Richmond, she could not believe how polite and nice the people were. Nothing eminent, but I did see that job and it got me thinking about what it would be like to live in the south. Tom Newark, CA

I was looking at a job board yesterday, and a job in Cleveland TN popped up. How far is that from you and what is that area like? Tom Newark, CA

Easy on that. I have a high income couple with a 20K refund this year. I have not heard it is in examination, but I expect it to be (probably not, this is the IRS we are talking about). Here is why the large refund. Income over 200K every year for the last 7 or 8 years. 6 years ago, when the babies were old enough to go to school, they moved to another school district in the same area. Rented out their home because it was so under water from the Recession. With their high income, the passive losses on their rental were suspended every year. This year they sold. Not only a loss on the property, but also all those suspended passive losses released. Dropped their income down to a level where they actually got their child tax credits as well. That is how you generate a 20K refund in 1 year. And I am damn glad for them as well. They have been my clients since I started my practice 17 years ago. I remember when they got married, right after she graduated from college and started teaching. They worked hard, do everything right, get great jobs, and get screwed out of credits and deductions because they are successful. They could have walked from their mortgage when the recession hit, but they did not. Solid people doing the right thing. When I sent them the return, I got a 1 word reply "WOW". This is when I love my job. Tom Newark, CA

She can't pay me more than $80 to prepare the return much less any fee to deal with the bloody aftermath. This does not add up? She can afford to pay with that fat eitc check. Tom Newark, CA

Nice. Very well done. Gave the refund and billed at the same time. Very well done. Tom Newark, CA

That is the Rita I know and love. I know you are not kidding. Tom Newark, CA

Here is the email I just got. Had I not noticed the email address, I might have clicked on this one. Well, I guess I can't post a snip of the email...ubt ti comes from IRS.gov and says my e-services will be suspended if I don't verify my PTIN by clicking the link. Beware out there. The scams just keep coming. Tom Newark, CA

OP went quiet? I would like to know the whole story. Tom Newark, CA

It happens all the time. The tax benefits go to the parents in the higher tax bracket, and the income goes to the kid in the lower tax bracket. Situation normal. How does the school know that the kid meets the filing threshold? Why are the parents amending if they took the ed benefits correctly in the first place? Tom Newark, CA

Client read your earlier post....they are stalking you on this board. Man, you people in TN are weird...and that is saying something coming from the land of fruits and nuts. Tom Newark, CA

Can't help with One Note. I had the same situation this year and ATX made it pretty easy. Sorry, not ignoring you, just don't have an answer. Tom Newark, CA

You did not say what you answered when he asked that question? Or should we just leave that be? Tom Newark, CA

$25 for any child listed as dependent on the parents return. I started this when I was using Pay Per Return, and it was just to get my cost for the return and the paper and ink back, not to make a profit. It just never went away and all my clients know what the price is and they don't balk. Tom Newark, CA