OldJack

I don't see a big problem with the concept of the C-corp, however, the detail of the transactions could easily cause a problem if the transactions are not at arms length. It could easily be argued that he was controlling profit on the 1040 with transactions designed to limit or shift income for no other purpose other than avoiding taxes. I question the business purpose of the C-corp when it is only doing business with the single related shareholder. The only benefit I see in a C-corp of this activity is maybe tax-free benefits and shifting income to lower tax brackets or averaging the brackets between the corp and the 1040. That could be an obvious consideration for audit and reclassification of income. This would probably not be a question if it was a pass-through S-corp.

My post was deleted because, on a political post, I said illegal aliens should be hunted down and turned-in (or words to that effect). Then I got a warning email from Paul Roberts saying that was not appropriate. I emailed back and said although I was a guest he should not have deleted my post and that I would appreciate an apology. He then banned me from the website. Its alright as I have banned their WebCD and tax book which cost them money and freed my time to spend on this and other websites. :P

Jainen... will do..thanks. I deleted my cookies for that site the day I was banned. edit: Best I can tell.. there were 3 people banned. Also, it looks like most current posts only have 2 or 3 replies. Not much of a tax discussion going on now days on that site. I just renewed my QF handbooks and I will not be renewing their rag.

Send him back to the original tax preparer. Tell him your fee would be much larger (make it so) than the original tax preparer.

Thanks KC for the info on epostcard. I guess that will be something the organization can do online direct with the IRS without an efiler?

If your version does not work the way Gene says (having the A-Z down arrow on the toolbar), you can always select "sort" from the menu under "data" in the upper left corner of your screen.

I believe the amount is as you say $25,000. However, the 2006 Pension Act provides that for years beginning after 2006, an organization excepted from filing form 990 due to gross receipts of less than $25,000 is required to annually furnish electronically to the IRS information about the organization [2006 Small Business Quickfinder Handbook page E-1]. Exactly how and what information is to be transmitted electronically I don't know.

Obviously when you fill out form 4684, Part B, insurance reimbursement reduces the casualty loss deduction for 1040 Sch-C. In Chief Counsel Advice 199903030, the IRS said the cost of repairs to restore property for which a casualty loss was deducted could be expensed currently if the repairs only restored the property to its pre-casualty state. Only repairs that materially enhanced the value, use or life expectancy or such property beyond its pre-casualty state would be capitalized [Quickfinder 1040 Handbook, page 5-16].

What you ask is a complicated subject depending upon many factors. It would be best if you would review the tables and charts on the subject in the Small Business Quickfinder Handbook, tab K, employee benefit plans.

I think you are missing the point Pacun. Mother is not gifting anything as when she died the joint bank account is owned 100% by the 2 brothers that are then making a gift to the other brothers not on the bank account.

>>a real mess they are in.<< The mess is probably because the fact that they are a "not-for-profit" entity does not keep them from having a taxable profit from some activities that are taxable. The IRS has probably audited in the past and wants taxes on those taxable business activities. Unless you have a clear understanding on getting a fair pay for your services you should consider passing as this type tax return/bookkeeping can be a real time trap.

Had the taxpayer sold the software to the organization and then donated the money to the same organization he would have had a valid tax transaction. The taxpayer would have had Sch-C income and a qualified deductible contribution. He did not do that and as a result he has nothing for tax purposes since he had no cost for the contribution except his time and time is like volunteer labor.

I am glad you posted that address also. I don't expect to win anything but for the heck of it I am sending in my 3x5 card. I hope others will also and maybe CCH will see there are angry customers. :angry:

Sounds to me like your odds definitely got changed. Maybe, if we can get enough people together, we can file a class action lawsuit. Renewing early just to have a chance of winning a prize is quite a joke worthy of ATX management. :D

I believe you got your answer on www.thetaxbook.com but for others here the answer is code sec. 1043: Sec. 1043. Sale of property to comply with conflict-of-interest requirements -STATUTE- (a) Nonrecognition of gain If an eligible person sells any property pursuant to a certificate of divestiture, at the election of the taxpayer, gain from such sale shall be recognized only to the extent that the amount realized on such sale exceeds the cost (to the extent not previously taken into account under this subsection) of any permitted property purchased by the taxpayer during the 60-day period beginning on the date of such sale. (B ) Definitions For purposes of this section - (1) Eligible person The term "eligible person" means - (A) an officer or employee of the executive branch of the Federal Government, but does not mean a special Government employee as defined in section 202 of title 18, United States Code, and (B ) any spouse or minor or dependent child whose ownership of any property is attributable under any statute, regulation, rule, or executive order referred to in paragraph (2) to a person referred to in subparagraph (A). (2) Certificate of divestiture The term "certificate of divestiture" means any written determination - (A) that states that divestiture of specific property is reasonably necessary to comply with any Federal conflict of interest statute, regulation, rule, or executive order (including section 208 of title 18, United States Code), or requested by a congressional committee as a condition of confirmation, (B ) that has been issued by the President or the Director of the Office of Government Ethics, and that identifies the specific property to be divested. (3) Permitted property The term "permitted property" means any obligation of the United States or any diversified investment fund approved by regulations issued by the Office of Government Ethics. (4) Purchase The taxpayer shall be considered to have purchased any permitted property if, but for subsection ©, the unadjusted basis of such property would be its cost within the meaning of section 1012. (5) Special rule for trusts For purposes of this section, the trustee of a trust shall be treated as an eligible person with respect to property which is held in the trust if - (A) any person referred to in paragraph (1)(A) has a beneficial interest in the principal or income of the trust, or (B ) any person referred to in paragraph (1)(B ) has a beneficial interest in the principal or income of the trust and such interest is attributable under any statute, regulation, rule, or executive order referred to in paragraph (2) to a person referred to in paragraph (1)(A). Basis adjustments If gain from the sale of any property is not recognized by reason of subsection (a), such gain shall be applied to reduce (in the order acquired) the basis for determining gain or loss of any permitted property which is purchased by the taxpayer during the 60-day period described in subsection (a).

Note they were all lawyers except one. What more could Ernst & Young have expected with hiring lawyers. Ernst & Young said in its statement that the men, none of whom was among the firm's management, were part of a small group within the firm that partook in the transactions. The group was disbanded years ago, the company said. Sorry E&Y, that is not an acceptable excuse.

The estate use FMV at DOD plus selling fees/other costs after DOD. Depreciation is considered only for any allowed or allowable after DOD.

It probably does not apply to your client. You are most likely referring to code §1045 for rollover of gain from sale of small business stock. An election is available for tax-deferred rollover of gain from the sale of qualified small business stock held more than six months. The taxpayer must purchase new qualified small business stock within 60 days. The entire gain is deferred if the new stock costs at least as much as the amount realized from the sale of the old stock. Basis of the new stock is reduced by the amount of gain deferred. Qualified small business stock is C-corp stock with a total gross assets of $50 million or less before and immediately after the issue of stock. Exxon stock would not qualify as small business stock.

Is there a way for a previous poster to know that they have posted to a topic without opening and reading the topic? ie: such as the "hot topic" icon and "new" post icon. edit: Well... I think I figured out that the backwards "L" in the lower right corner of the envelope/folder icon means that you have posted in this thread.

2006 Publication 946, page 56: >>Listed property is any of the following. Computers and related peripheral equipment, unless used only at a regular business establishment and owned or leased by the person operating the estab lishment. A regular business establishment includes a portion of a dwelling unit that is used both regularly and exclusively for business as discussed in Publi cation 587.<<

>>Does it require a specific program? << You print the unsigned tax return from the tax program to Adobe Acrobat creating the pdf file. Then, after you have once scanned your signature to a .jpg image, you setup Acrobat signature feature to use the image when you use Acrobat to "sign" the pdf tax return in the tax form signature box area. I do have the full Acrobat Pro 7.0 program. I am not sure if Acrobat Reader has signing abilities but I believe it does. I am not sure if the image signature emails as I have used this only with "faxing" the tax returns, from the pdf file, for a couple of my clients.

Mike... Your practice is especially easy to paper file and it costs you nothing. You simply make an image of your signature and use it to sign the pdf tax return before you send it to the client. The client prints the pdf file on paper and U.S. mails his paper tax return. no big deal.

I agree.. Initial estate income tax return 1041 on calendar year 2006 reporting sale of stepped-up basis of shares of stock as long-term except for any sale of stock acquired after date of death. As the final determination of beneficiaries of the estate appear not to have been finalized with distribution, the estate should pay any income tax on estate income.

Why not just forget about "efile" and give your clients a paper return to file. The only savings with efile is paper since you take as much or more time playing with signature forms, acknowledgments, and efile errors than it takes to produce the paper return. The taxpayer's desire for quick money is not your problem unless you let it be.

>>But, you know, To use one of Jimmy Carter's recent assessments of The president, I believe this Congress is the worst in history. Tell me one productive thing they have accomplished. After all the rhetoric during the last election campaign that they would do this or that...they have done exactly ZERO.<< I had to read your quote twice as you must not be old enough to remember Jimmy Carter as President. He was pegged by society as the "Do Nothing President". It was not until after he began charity work that he was recognized as doing anything. With charity he has accomplished many things and deserves that credit, but as President.. he should be the last to point a finger at anyone. I agree totally with KC. Give'em hell KC.