BulldogTom

I agree with CBSLEE. If the reimbursement is taxable, it will most likely be included in the student's W2. If it is under a tax free plan, the benefit has been received in the current year and the reimbursement would become taxable in the year received. I would treat it just like a scholarship payment in excess of the cost of the educations in that year. No different than a high school senior who gets more scholarship money than they need for the first semester of school. Even though they save that money to pay for future years, they have to take into income the excess over the cost of education in that first year, and then they get to take the education credits in the subsequent year. Tom Newark, CA

Cash basis taxpayer. Calendar year accounting. You can't forecast that there will be a reimbursement. Take the credit. When the reimbursement comes in, treat it just like a scholarship that covers more than the cost of the education in the year it is received. Tom Newark, CA

Deb is real smart. I agree with her. Tom Newark, CA

Wouldn't it be easier for everyone if the remaining partner purchased the leaving partner's interest for 2K? Then, because the partnership has terminated, the remaining partner, as the only person remaining, will be able to work with the bank, and collect all the receivables, keep the client list, etc. I am going way back in my memory bank here, but I think a dissolved partnership that dissolved only because of the withdrawal of a partner, can keep the EIN's for the business. Something about a tax free transfer from one business to another with all the basis remaining the same. I am stretching my memory here, but I seem to remember that there is a code section that allows the tax free transfer of business assets if the partnership is no longer a partnership but is still an ongoing business. Please correct me if I am wrong. It would make it much cleaner to do it that way. Tom Newark, CA

I felt like they may not have had enough information from the poster to give the answers they were giving. That being said, they seem to have made a conscious effort to be up on the ACA as it relates to the tax return. I saw something that they were planning to include the affordability worksheets in the software in the next update this week because it is so hard to do this outside the software on the worksheets in the instructions. Crossing my fingers that this is true because the affordability exception seems to be causing the most headaches for preparers on that board. Tom Newark, CA

I peeked over there this weekend and I was reading the ACA board. I was shocked at the answers that ATX was giving on the ACA. Much of it was related to the entry in the software, but there was some that resembled telling people what the ACA law says and how to apply it in the tax return. Interesting. Tom Newark, CA

This is one of the strange things about the ACA. It does not look at affordability on a month by month basis. It looks at your entire household income for the year and compares it to the cost of the Bronze Level plan for a year to determine if you meet the hardship exceptions. You could have $800 of total income for 11 months, and hit the lottery in December, and have to pay the penalty tax because you had the money to pay for coverage. I know, this is a very extreme example, but it is not far off from the post above. Linda, you are going to have to go through the worksheet to get the right numbers for affordability. It is not fair, but it is the law. You will get the 60 day short term exemption. Tom Newark, CA

This comes from my Spidell update seminar. Notice 2014-7, the IRS says that In Home Supportive Service Payments (also known as Medicaid Waver Payments) made to a related individual are treated as qualified foster care payments excludable under IRC§131. The way I understand this, if an individual needs care that would require the state to pay for their care, and that care is provided by a relative who is compensated by the county for providing that care, the amount received by the relative is now excludable from income. Applying this to the OP, if the individual "spends down" their assets, and requires care that would be covered by Medicaid, and a relative provides that care in home and is compensated under a Medicade Waiver Payment, the payments to the relative would be tax free. Tom Newark, CA

This does not seem right. It smells to me. Tom Newark, CA

I have to admit, I am not as up on the new regs as I should be, and of course it just bit me in the butt. Please comment on the below scenario. TP owns a commercial building that he rents to his Corp for office space. He had a close call with the lighting wiring that nearly started a fire. The fire department came out and identified the problem in the lighting fixtures. The building is a little older and the lighting needs to be updated. Electrical contractor to do the work and all the materials will total about 20K. Since this is a safety issue, and the building cannot be used unless this work is done to it, can it be expensed? Or must it be capitalized? Under the old rules, I would have expensed because of the safety issues that require this to be done. What do you think? Tom Newark, CA

Since this is your last year, you could tell your clients what you really think of them? What would it hurt, they just won't come back next year? Think about it, have some chocolate, and enjoy the possibilities. Tom Newark, CA

Also, there is a new rule this year regarding In Home Health Services provided by a family member. I just ran across it at my update seminar and I don't have all the details in front of me. The way I understand it, those payments will not be made on a 1099 or W2 anymore from the counties. I will post more when I get back to my tax office if any of you are interested. Tom Newark, CA

JB, On a simple 1065, don't overthink it. You still have the same revenues, cost of sales, and expenses to get to net profit. The 1065 just asks a lot more questions about the partners and their business. Then it gets different when you have to put in the balance sheet (do it even if not required) and the partnership percentages to get the K-1's to spit out. ATX is not real friendly in that area, but once you go through it, it is not bad. Take your time and ask questions here about where to find things in the software. From what you posted, this is a nice introduction to the 1065 and well within your ability. Tom Newark, CA

For next year, employers will be giving their employees a 1095. This is when enforcement will start. Right now, only the purchases off the exchange can be verified for PTC. Tom Newark, CA

Back to the point of the OP, the price TT charged for that return is in line with what my fee would be on a similar return, including fee collect. Tom Newark, CA

Catherine, I would issue the 1099's, especially since you know the cash was received by the client. If you want to true up the cash account, you could Debit Cash and credit a liability account for future cash clearing, but I would not do that. The books are correct. The cash went out when the check was cut, the check is valid and used for a business purpose. As stated above, the issue is not with the vendors, it is with the bank. Tom Newark, CA

Eric, I am going to confess in front of everybody. I do my taxes early, but I keep a drawer of receipts that I hand to my wife to organize at the end of the year. Then I put them and all the other pieces of paper in an expandable file and hand it to my wife. She is good at this stuff. You should have seen her go through 10 years of records for a non filer client we had. I would have no problem giving her your paperwork and getting it all organized for your tax return. My offer, probably the worst one you could pick, will always stand. It is all I have to offer. Tom Newark, CA

We have offered to do his return for free. I would do it, but I don't have the state expertise for where Eric lives. But I would learn his state rules if he asked me to. I think I am not the only one on the board that has made the FREE offer to Eric, and it is a standing offer. Tom Newark, CA

That is a variation on my thought. I would make every law be resubmitted if less than 50% of the congress who voted for it were still in office. That way, when we throw the bums out who make bad laws, the law goes with them. Right now, we throw them out when they get too aggressive, but they still leave their legacy behind. Any law that passes three times under this rule would be deemed acceptable and no longer need to be re-voted. Tom Newark, CA

Yes it is. Sorry to confuse. When we decided to go with square, we needed new phones because our cell phones were not smart. Just plain old phones with voice and text. So we went to Metro PCS and got a new phone plan with data. We told them we needed the cheapest phone we could get that supported square readers. They did all the work for us, and we are happy as can be. The phone was $79. I just turn on data on my phone when I am at a client location and I can swipe the card. When I am at the office it runs off my wifi connection to my internet so I don't use much data on my plan. The new phones are addictive though. When you can talk to them and they tell you all kinds of stuff you want to know right now. Tom Newark, CA

On the Square website they have a list of supported devices. We bought new LG phones and the wireless provider who sold them to us called square and confirmed they would work with the reader. Our phone was not on their list, but it works on our phones. Tom Newark, CA

Back to the OP. I am thinking about SSD drives as well. My question is: Do I upgrade my 2 year old HP laptop and 3 year old HP desktop that are working fine (but could be faster), or do I go out and buy new with SSD in them? Any opinions out there? Tom Newark, CA

I am not buying it. Show us proof that you are a real tax professional! Snap a picture dated today with stacks of files everywhere and then I will believe you. Tom Newark, CA

Rich, I appreciate what you are saying, and the only reason I posted this is because I thought there was a chance, knowing the TP as well as I do. The real challenge is finding a business discussion that will happen on the cruise. Like I told the TP, if they brought a couple of contracts and negotiated them while on the cruise, if they did something substantial that could be considered a business purpose, then we could follow the documentation rules and try to beat an audit. So I printed out an article that told him exactly what he would need to document and his response was "I would spend the whole 10 days writing everything down." This TP is "documentation challenged" to the max. Decided he would just pay for it and call it a vacation. The client he is taking has done a significant amount of work with the TP business over the years, and as often happens, they became close friends and they vacation together occasionally. It is too much for him to risk an audit. Again, I appreciate what you are saying, and I take your advice seriously. Thanks Tom Newark, CA

Someone please send a truckload of chocolate to TN in a hurry. There is a storm brewing out there that might do real damage if there is not an intervention. Tom Newark, CA