Don in Upstate NY

New York may be the only state that requires registration of all paid preparers who prepare state tax returns for that state. A preparer who lives in NY but prepares only federal returns would not have to register with NY, but a FL based preparer who prepares NY state returns would. [Exceptions for attorneys, EAs, CPAs; no fee for less than ten returns; $100 for 10 or over; qualifications to be determined at some point in the future; RAL facilitators must register in any case; etc.]

First answer is 'c'. [basis of house before fire was 90K (lower of cost or FMV). After fire house has no value, so loss is 90K. Insurance pays 85K, so net loss is 5K]. On the second question, it isn't clear if his actual costs exceeded his reimbursement or not. If he was over-reimbursed he must return the overage under the rules for an accountable plan. If not, he files 2106 to claim the excess expenses. If this were the real test in the olden days, they would eventually give credit for either 'a' or 'b'. With computer scoring, I'd go with 'a' and cross my fingers.

Your client was referring to a "qualified charitable distribution". You can read about them in Pub 590, page 58. Basic points are: Direct transfer from an IRA to a qualified charity, limited to $100,000 per year. Taxpayer must be over 70-1/2 on date of contribution. Distribution is non-taxable, appears on line 15a but not 15b of the 1040. Mark line as QCD. Counts toward MRD. This provision of the law expired on December 31, 2009. So all this is academic unless and until congress extends the deduction.

This will be NY's second season to regulate tax preparers. The ONLY requirement is the ability to come up with the $100 fee. At least on the federal level there is a tentative schedule for testing.

Let's pause there. He is claiming them as dependents who are "qualified relatives" - in this case non-related individuals who have lived with him the whole 12 months of the year. This does not allow him to claim head of household.

From Pub 590 (What's new for 2010)

And attach a 8275 disclosing how the amounts were determined.

The original "suggestion" was ... which seems to be a reasonable request, given that this board has a discussion area on the other vendors page specifically devoted to TRX. Nevertheless, certain of the items posted could be of a more general interest. One of the TRX websites was tagged as potentially infected by Google. This is the same thing that happened to TheTaxBook.com about a month ago. This is a precautionary note to users of the site. It is not a signal that all of the vendor systems are infected, nor that the vendor has done something wrong. IIRC it took TaxBook about three days to find and remove the infected files, and have Google verify and remove the tag. Clients of TRX who used TaxWise for the prior two years and do not have the opportunity to do so again this year, have been given notice of an alternate source for the software at less than MSRP. The CPAs and MBAs among us can ponder the business plan of a company that can offer to resell software below MSRP to a very limited market. Or even give it away, apparently relying on fee rebates on bank products. Not a business for the faint of heart!

Thank you.

The TaxBook website (www.thetaxbook.com) was also tagged with the same warning about a month ago. Could be that the bad guys have identified tax preparers' computers as potentially good targets, as they may contain valuable financial data. Using an encrypted logical disk for your data is practically painless, and is also free. www.truecrypt.org

From Pub 463, page 25 Does using the standard mileage rate reduce the basis of your car? What's the standard mileage rate for a fully depreciated car?

Depreciation conversion is a weak spot in many conversion packages. The TaxWise to TRX conversion also doesn't assign the assets to any activity - you have to do that manually. Did you see the conversion report that gets written when you do a batch conversion? It lists the clients and details the items that were not converted correctly. [Wish I could tell you where the report is, but I deleted mine after finishing the conversions.]

Where does it say he used the standard mileage rate? Maybe he used actual expenses. It takes six years to fully depreciate an auto with a five year life using the mid-year convention -- longer if he hits the limits on luxury car depreciation. (OK, with a $20K car that probably doesn't affect him - somebody look it up). How do we address the depreciation he couldn't take because of the 2% subtraction?

I re-read his post. He doesn't sign the returns he prepares for free (i.e. in cases where he is not a paid preparer.) I guess technically none of us should fill in the paid preparer block on our own returns or those of non-paying friends or relatives. The only cases I know of where the paid preparer block should by used by a non-paid preparer are returns prepared by volunteers in the IRS TCE or VITA programs. The preparers do not sign, but a site location number (looks like a PTIN number with a S instead of a P) is entered into the PTIN box.

Note that a whole slew of draft forms are available in this folder

I would have paid more if it were in color, but a black and white .pdf ...

I could envision a scenario where a strike would cause the employer to suspend operations and lay-off some exempt and/or non-union employees. It would seem that they would be eligible for unemployment.

Considering it was announced on June 17, it's a big yawn so far. Link

I disagree with your conclusion. If form 4684 were allowed, the deductible bad debt would be a maximum of $6,900 (answer B ) which is the $7,000 reduced by the $100 minimum on form 4684.

I actually got a call from TRX telling me that the conversion had just been released. Of course they knew I had used TaxWise last year because I bought it through them.

I converted all my 2009 TaxWise returns to TRX TaxWorks using the conversion utility released last week. Unlike most conversions, this one also brings the numbers to the TRX return so you can see that the calculations match. I'm now reviewing every return. So far the conversion works smoothly except ... Schedule C-EZ is not converted Form 8863 is not converted SEP data are not converted Minor edits are required ... Depreciation assets must be "attached" to the correct form W2s must be "attached" to the correct taxpayer Unemployment must be "attached" to the 1040 Zip codes must be re-entered to get automatic county lookup (if required for your state) Only found one actual bug in the software ... AMT depreciation adjustments are applied to assets attached to a 2106. So far it's going much better than I expected. When I get done reviewing my converted returns I'll tackle the custom client letter (a dog in ATX but quite good in TaxWise). The print packages look good as-is with the return and the worksheets nicely separated. More later. :)

That's an interesting word. TRX TaxWorks is certainly the most powerful program I've used, but it does have its quirks. I tried to attach a Preparer Note to a return (ctrl-N) and got a "program must shut down" error. Customer support was of no help - he was reading from a script and basically had me reinstall the program. No help there. Then my 2008 version starting having problems on startup with a similar "must shut down" error. Finally found the TaxWorks knowledge base and found out that neither TW08 or TW09 complies with the Microsoft DEP (Data Execution Prevention) protocols. I put the programs on the exclusion list and all is well. I've just recovered from a major problem which I think was database related. I was using the 2009 program to initiate a 2009 return from a 2008 file, when I apparently tried to open the same 2008 file with the 2008 program. I lost all functionality in the 2008 program and all the prior year data path connections in the 2009 program. TaxWorks is based on the Microsoft SQL engine, which is fairly intolerant of errors. Removing the 2008 program using the uninstall process leaves over a hundred unresolved registry entries, not all of which are overwritten when the program is reinstalled. After numerous re-installs I'm finally back to where I was two days ago, but I'm not sure that I would know what to do I it happened again. {Being fair - customer support doesn't work weekends off-season.] TaxWorks is one of the few programs that handles NY SDI correctly, and has a method to actually see what's in the e-file! Summary - the jury is still out.

Several items of concern ... Since the estate has been open for over three years, several 1041 returns should have already been filed. Since you say that the estate has finally been settled, have you received any previous distributions or K-1s from the executor? Was the Chrysler stock the only (or major) asset? It is also the job of the executor to distribute the proceeds of the estate. Why are you getting a check for the other heirs? Are they your minor children? Why has the estate apparently held the stock so long before selling it? It's not like Chrysler was a closely held family business with no liquidity in early 2007. I respectfully disagree.

E-mailed my problem to support last night and got a call back today from Paul. Problem was on my end (big surprise). Downloaded and installed on a different computer without incident. Then talked to Jeff to get the magic activation numbers and all seems to be working. Thanks guys!

Is anyone else having a problem installing the 2009 version of TRX-PRO from the web? I've used the TaxWise version for the past two years and am trying to get up to speed on the TaxWorks version for 2010. The install process seems to hang up when it tries to actually download the code - thirty minutes attempting to download fourteen modules, only six of which actually made it. Don