Maribeth

Tom, Without looking anything up, I believe you will have to allocate some of your basis to the cash you received. In other words, if the .6 share was worth $7.50 and the cash was $2.50, your client received $10 for each share he held in the old bank. Therefore 1/4th of the basis would be allocated to the cash and the remaining basis flows to the shares in the new bank. Maribeth

But I believe that the liquidating dividends on the 1099-div is just the same for reporting purposes as if they were on a 1099-B. In other words, it is not a dividend, but a sale transaction, in liquidation of the corporation. Put the proper amounts on Schedule D and it should be fine. Maribeth

Have you tried entering the liquidation proceeds in Box 8 on the 1099-Div. I don't believe it goes anywhere, that it is an informational reporting only. Try it and see if that works. Maribeth

Is the .ASC file the correct one to send? What is the .ZIP file for? I am curious if that is the file I am supposed to send. When I ran accuwage tests on the .ZIP files, I received errors that don't make sense. Is my thinking correct that since I received a confirmation from BSO that my files were received, that I successfully filed the W-2s? Thanks for your help.

Enter it on the Schedule D input screen. It is a long term capital gain. I usually list " ABC Corp - excess distributions". Maribeth

Jimmer, I am not aware of any Scorp basis schedule in the Form 1040 or that one is required to be filed with Form 1040. I maintain shareholder basis information on a spreadsheet for each client and that is held in my tax workpapers. I have never used a 6198 for an S corporation. My understanding of that form is that it is used for partnerships or entities that have issues with the at-risk limitations, not basis limitations. I cannot think of an instance where an Scorporation would have an at-risk issue. Maribeth

1. Health insurance premiums are included in Box 1, subject to federal income tax. They are not subject to ss/mc tax. On my W-2's we put the notation s/h med and the amount in Box 14. If the wages are more than the health insurance premiums, then the total of the health insurance premiums are deducted on Page 1 of the 1040. 2. SIMPLE plan -- just the opposite. Subject to ss/mc tax, NOT subject to federal income tax. The SIMPLE deduction is taken on the 1120S, not on the 1040. If the payroll company did not due the W-2's correctly, then they need to redo the W-2's correctly. And they probably did not do the 941's correctly either. They will need to correct their mistakes. Maribeth

Thank you, Taxbilly.

There are basically 3 different levels of living in a retirement community. If your client lives in her own apartment, has access to a dining hall, yet takes care of her own daily personal needs, a small portion of the rent she pays to the facility is considered a medical expense and can be deductible. The medical expense is because of the availability of the nursing staff if your client has a medical problem. If your client is in an assisted living program, where she can be living in her own apartment, has access to a dining hall, yet she cannot take care of her own daily personal needs, then all of the rent she pays to the facility is considered a medical expense and can be deductible. There is a 3 out of 5 test for whether your client can take care of her personal needs such as can she bath herself, can she dress herself, can she be responsible for her meds. The 3rd level is at the nursing home level, and of course, those expenses are all deductible. The facility itself should be providing an annual letter to your client advising your client what portion of her monthly rent is deductible. Maribeth

Yes, it happened to me yesterday. Opened up a corporate return, that I had accessed before, and all of the fixed assets were gone. I don't know what happened or why, but I rollover the tax return again, the assets were there and I just reentered the information I had entered before. It was a shock to open that return & see no assets, that's for sure! Maribeth

Yes, we have a new program update. And for the SECOND time this year, they have changed the .exe name so if you cannot access your ATX, right click on the icon, go to properties, then find target, and then double click on ATXTax2008.exe. That will fix it. Maribeth

I don't believe that we have any proof other than the acceptance of our efile transmission. I attach the copy of the 7004 to the return but it has no confirming information on it. Maribeth

Mike, using the rollover function will retain each quarter as a separate file. For instance, if the first file is Quarter 1, when you roll over to Quarter 2, ATX will create another file. We rename that file to Q2, and then for Q3, we will rollover the Q2 file. That way you are keeping all quarters. Maribeth

No deduction for monies paid back. The restituion was a penalty and not deductible. Maribeth

Mike, we create the first return and then we use the rollover function to create the succeeding returns. On the rollover manager, look for the tab that says "last month/quarter". The return will be there ready to be rolled over. We then rename the return, using Q1, Q2, etc. Maribeth

We did all of our extensions on Tuesday, the 10th. They went through just fine, no problems, and have already been accepted. I am puzzled as to why ATX would need you to update your 2007 files. That is an issue I haven't seen before. Maribeth

Karen, the only warning message that I have received is that the NOL worksheet cannot be paper filed. I have had two nol's so far this year, adjusted the NOL worksheet, and efiled with no problem. Maribeth

Yes, 1099's can be processed through ATX and unlike the W-2's, which are transmitted separately to the SSA, the 1099's are just transmitted to IRS using ATX efile. Maribeth

You did have a sale in 2008; it was the sale of the inventory to your shareholder. Your journal entry s/b a credit to sales, debit to distribution, credit to inventory, debit to COGS. If your state imposes a sales tax, that would have been due at the time of the sale to the shareholder. Maribeth

Mike, I played around with a final estate of mine. I could not get the final year deductions in place if I put the NOL on line 8 of Page 1 -- which for a carryforward is probably where I would have put it. However, placing the carryforward amount on the Schedule C brought the correct final year amount to the K-1. See if this will work for you. Maribeth

Create another 1099 file, or duplicate the file you sent. Correct the 1099 and mark the box at the top that says "corrected". Efile the corrected file. Much simpler than correcting W-2's! Maribet

Wow, we transmit the .asc file and have not had any problems. We don't have state income tax so we don't have to file a state W-2. Would that be the difference? Maribeth

Especially in these times, you need to know two figures: the basis in the hands of the aunt AND the fair market value of the stock on the day it was gifted. For gain purposes, you would use the aunt's basis. For loss purposes, you use the lesser of the aunt's basis or the FMV at time of gift. Maribeth

Okay, I think I have it: 2008 purchase, 7500, recapture; 2009 purchase, 8000, no capture; election to treat 2009 purchase as 12/31/08 without eliminating 8000 and no recapture. Jainen, in your opinion, do you believe that the 2008 law will be revised to eliminate the 15 year payback? Maribeth