Maribeth

I am a bit confused. The CCH tax briefing on the bill says that the $8000 credit is avalable for first-time homebuyers whose homes are purchased after December 31, 2008 and through November 30, 2009 (not 7/1/09). Therefore, the $8000 credit would apply only to 2009 returns. If you elect to treat a home purchase from 1/1/09 through 7/1/09 on the 2008 return, would not it fall under the "old" rules, $7500 and recapture? Maribeth

The income from the S-corp that is distriubted to your client off of a K-1 is not earned income. Only the W-2 wages from the S-corp would qualify. Maribeth

The income from the installment sale is income in respect of a decedent. It did not get a stepped-up basis at the time of death. Your client, in effect, stepped into the shoes of his father and continued on with the installment sale. Your client should have been reporting the installment sale just like his father would have reported it if the father were still alive. There would be the interest portion of every payment, the return of basis portion of every payment, and the taxable gain portion of every payment. You will need to find out what the father had been reporting on his 6252. Then, look at the gain that should have been reported in 2006 and 2007. If the amount is minor, you might just report all gain this year, instead of amending the tax returns. Maribeth

"My problem is, I have no idea what the original Gross Profit percentage was. " You should be able to determine your gross profit % based on the numbers on your 6252. If total principal payments received for a year are 1000 and the gain recognized is 200, then you have a 20% gross profit. You CANNOT determine the basis in the repossessed property without determining this number. Maribeth

The basis in the property is the unrecovered basis in the installment obligation, plus any gain recognized on the repossession, plus any repossession costs. So, if you GP% on the original sale was 20%, your unrecoverd basis is .80*50057 = 40,046. To that number you add any repossession costs AND the gain on the repossession. Your gain on the repossession is the amount of the principal payments that were recovered basis. So using the 20% again: of the $2943 in principal payments received, you had previously reported .20*2943 = 589 as gain. This year you have to report the remainder of 2943-589 = $2354 as gain. Why? Because you received the money and then got the property back. Without any repo gains, I would calculate your new basis as 40046 + 2354 = 42,400. HTH, Maribeth

Well, it was probably my fault. This is the first time I have tried to do anything "fancy" and I guess it did not work. The file is only a pdf file so if I can find out how to do it right, I will try again. So sorry . . . .

The law changed as of 1/1/09 and you will now need to file a 941-x. CORRECTING_EMPLOYMENT_TAXES.doc The attachment is a copy of the IRS telephone forum information. Sorry for the huge text before. I now know how to make an attachment! Maribeth

Yes you have to fill this information in. If you try and create the efile, you will get the dreaded red warning that it cannot be efiled without that information. I ente the corporate officer I work with, the telephone number and the date I finished the return. Maribeth

The donation would go to Schedule A IF and only IF the taxpayer has a basis in the equipment. If the equipment has been fully depreciated or §179'ed, then no deduction. Maribeth

Old Jack, you touched my heart today. So true, so sad.

Or the same programmer who continues to leave in the print function, that darn little box that warns me that ATX's pdf printer is better than mine. That little box causes me one more click for every return. Has anyone figured out how to get rid of that little box? Maribeth

Way older than dirt . . . . Mom would call the operator on our party line out in the country and the opreator would call the next morning to wake us up. It had to be a holiday or a birthday or some special day when the milkman would leave a bottle of orange juice. Yummy, yummy. Remember driving home from the lake or swimming pool with all the swim suits hung around the antennae? I still miss the bright light switch on the floor of the car. Maribeth

One of those things is I cannot update from a workstation. I have to update from the server. However, out of our 3 workstations, we can all rollover returns without a problem. Go figure . . . . . Maribeth

Kyle, Your Jo-Anne did a great job for me, fixed my problem and I am off and running. I had another problem this week with ATX, tried their technical support line and was on hold for 25 miniutes, hung up, called your number, it was answered on the second ring by a real live human being, problem fixed. You are worth every penny, and more, that I have spent. Maribeth

Tom, that kitty is Teddy, a big, gentle ball of fluff and hair and purrs. He was 19 when he passed away on 1/2/2005. I miss him still . . . . . . .

The process is the same as for 1099's except for submitting directly to SSA. I have never seen any instructions that require a signature authorization. Our cover letter to the client does indicate that we will submit the W-2's to the SSA on their behalf and we do have a blanket authorization signed by the client that directs us to electronically file tax returns and informational reporting to the respective agencies as requested by the client. We generate the W-2 submission file but we do not submit to the SSA until sometime in February. Just in case there is an address wrong or an amount or a social security number. Maribeth

"Is there an easier way to get set up to e-file 941s without having to get each client to apply for a PIN?" If you discover an easier way, please let me know. We have been trying for two years now to get everyone signed up for electronic filing on their 941's and 940's. We have been successful with just a handful of clients. We tried to get 8 clients signed up during the month of November. We submitted the Pin request, it was acknowledged, and not one, NOT ONE, client receved the confirming letter and pin number from the IRS. Trying to efile the 941's and 940's is worse then efiling a 1040. It is just plain ridiculous. And, I was not aware of the requirement for the manual signature this year until I read your post. I believe that if I can use a computer generated signature on a 1040, then I can damn well use a computer generated signature on a 941. I have customzied the master form to do so. If you have any luck in your quest, please let me know. Maribeth

I checked with ATX support after the 10/15/08 deadline and asked about efiling our 941's and corporate fiscal year returns. Their response was that all the business returns efiling would be supported through the end of the year. Our 941's went through okay; I have only one 1120 and I intend to efile that one this week. Maribeth

Our IT guy says to stay with XP, to never upgrade to Vista and to wait until the next version of the operating system. I have used Vista at a client's and did not care for it --- too much micromanaging. FWIW, Maribeth

I believe the answer to that is yes. No one else uses my computer so it is not an issue in my office. But, yes, I believe that since I am controlling my computer, no one else can. What I liked absolutely best about it, is that I did not have to buy any more software. Did not have to increase my number of licenses or anything. It really is a great tool. Maribeth

We use Log Me In. I have a computer at home that has nothing on it except the operating system and internet access. Using log me in, I log in to my computer at the office. I am working on my desktop just as it is in the office. There's no need to install any software on the computer at home, unless you want to. Maribeth

I got all 20 . . . . sure must have watched a lot of television when I was young. The Joe Namath commercial: he is shaving and the blonde is saying "take it off, take it all off". Was that Gillette? Was that just one commerical or have I blended two in my memory. Anybody remember? Maribeth

Because the activity of building, flipping and selling homes is the taxpayer's trade or business, the taxpayer cannot use the installment method of accounting for the sales. The taxpayer must report all of the gain (or loss) in the year of sale. See §453. That income will go on the taxpayer's Schedule C. If the taxpayer is very profitable, you might want to incorporate him and take the S election. It could save some SE tax. Also, I would not report the interest on Schedule B. I believe that it should be reported on the other income line of his Schedule C as it is interest related to his notes & accounts receivable. Maribeth

Burke, you need to look at the journal entry that the CPA made on the books of the corporation to record the salary. The entry should reflect a debit to salary expense, with a credit to taxes payable and the remaining credit to distributions. That way the shareholder has paid in their share of FICA tax and, possibly, income tax. No adjustment would be needed in 2008. Maribeth