Maribeth

We use AME Software -- also accurate, inexpensive and well supported. Maribeth

We just went through a similar process, migrating all the ATX data and application to an actual file server. A young man in Georgia by the name of Herrick assisted us through the process. He was awesome, knew exactly what he was doing and on what application, spoke with a Southern accent, and walked with us throughout the entire process. I miss the people in Maine but it appears that the people in Georgia are getting up to speed. Maribeth

One of all my all time favorite Twilight Zone episodes. Thanks for bringing it into the 21st century. Maribeth

If the loan was issued to the corporation, is in the corporation's name, and the shareholders are only personally guaranteeing the loan through the use of their home equity, then the shareholders have NO BASIS in the corporation. A personal quarantee cannot increase basis. What should have happened: the shareholders took out the loan personally and loaned/contributed the proceeds to the corporation. They might be able to restructure the transaction if it is not too late. Maribeth

I do not use the ATX NOL worksheet for intervening year calculations. I only use it to calculate the current year NOL and the worksheet itself is very limiting, you have to know your NOLs in order to use that worksheet properly. As to intervening years, the modifications you make to taxable income apply only to the amount of NOL used up. The social security calculation is NOT one of the modifications you make. The adjustment for medical expenses IS one of the adjustments you make. For example, your AGI for the carryback year was 20,000 and the standard deduction was used. If there were no additions to modified taxable income (add back capital losses, §1202 exclusion or production deducton), then the amount of NOL that would be used up for the year would be $20,000. Now you put that on line 21 of the return and your social security gets redetermined. But the amount that was used of the NOL is still $20,000. It is like regular tax and AMT. Two different calculations going on. You have to split it apart and look at each separately. I am so sorry that I am not explaining this clearly. If you wish to send me a message with the details, I would be happy to review your calculations for you. Maribeth

I also dropped back to MAX from TTO. Have you decided on what, if any, tax research you will use for next year? I am still pondering that aspect, which way to go. Maribeth

If you are asking about getting your updates from QB, you can click or unclick the updates you don't wish. I believe the only one that you have to download is the maintenace update. Maribeth

Well, the sales team is working today. Just talked with a delightful gentleman in Georgia named Richard. He assures me 100% that ATX will be around next year and that the technical team is working on the product even as we speak. So I nenewed. Figured the early discount would pay for the shipping charge . . . . . Maribeth PS: Elrod, what's for dinner?

You're very welcome, Maribeth

It appears to me that any tax that should have been paid for 2006 has now been paid. The shareholder paid income tax and SE tax on his 2006 return. The State of Texas received a franchise tax for 2006 for the non-active corporation. If it were my client, I would document all of this information and make sure that the memo went into the permanent file. I would document how the client received bad advice from their prior professionals, that all the tax has been paid, and all income/expense has been reported, albeit on an incorrect form. I would review this information with the client, discuss with the client what could happen in the future regarding the mis-filings, and then I would put it all to bed. I would then get my client into compliance for 2007, file the correct returns and move on. This is what I would do. Maribeth

Okay . . . . if they were advised to continue on as a sole prorietorship for 2006 and they reported any income/expenses for 2006 on their Schedule C, then I would probably file an 1120 now for 2006, showing NO ACTIVITY on the face of page 1. Then start your books for 2007, showing the assets that are transferred in from the incorporators and recording your common stock. Your beginning balance sheet would be blank; your ending balance sheet would have your end of the year numbers. Now, if they did issue stock for some consideration in 2006, then you would have those numbers on your beginning balance sheet. Maribeth

The balances carryover from the C to the S. Remember that the balance sheet is based on accounting principles, not on tax principles. The only thing you have changed is the method of taxation for the corporation. Maribeth

John, thank you so much for the offer. I probably will renew with ATX, it will be my 10th year with them, but for $100, I'll wait until December. You know, I might have some airfare discount tickets in a file somewhere, are you interested in them? Maribeth

Mel, right now we all have money. Come November, it might be a little short. If you need seed money now, please, please let us know. Maribeth

At least you all are being contacted. I renewed last May & got the early discount. Also changed my email address in May of 2007. As of today, I have not received one email about renewal -- not one. Nor have I received any phone call. Not a one. Nor did I receive the email from ATX about the community being started up again. I have had the same phone number for 21 years now, that did not change. No emails, no phone calls. Now, I have at least 4 times called and talked with someone in Georgia to get my infomration in their system. They assure me they have my correct information. Still, no emails, no phone calls. This would never have happened with William at the helm. The only thing I have received is the blanket mailing that was sent out to see if I wishted to change to their product. Maribeth

I have used The Tax Book for several years now. This year they offered an online edition of the book. I looked at their demo but "old dog, new tricks" did not go with it. You might want to look at that option also. Maribeth

But Kleinrock & CCH can keep their "research materials". I'll go back to TheTaxBook and utilitze NATP more. Chris B

John, I have copied your posting and put it in my task list for follow up. I will institute this next season. What a fantastic idea. Thank you so much. Maribeth

What should have happened on the tax return in the year that the bond was purchased, is that the accrued interest paid was subtracted from the actual interest received. When you buy a bond between interest dates you usually have to reimburse the seller for the amount of interest that they had earned but had not yet received. So you buy a bond for 10,000 with accrued interest of 200 for a total of $10,200. A couple of months later you receive the interest payment and it is for $400. On your tax return for that year you would report $400 interest received, less interest paid of $200 for a net amount on Schedule B of $200. hth, Maribeth

That's correct. Nothing to report, tuition is greater than the distribution, no credit to the parents. You have some great clients out there on Long Island, Mike. Maribeth

The treasury notes are not savings bonds. They are issued at face value and the interest is paid to taxpayer every six months. This is what I believe your basis is: Note A - bought 2003 $10,142 - accrued interest of 62 = 10080 Note B - bought 2005 $49,705 - accrued interest of 348 = 49,357 Note C - bought 2005 $34,895 - accrued interest of 179 = 34,716 Maribeth

A simple example. Distribution from 529 plan is $5,000, 4750 basis & 250 earnings. Tuition is $5,000. Parents take the $5000 on their return for the Lifetime or Hope credit. The student has 250 of taxable income. Usually won't have any tax associated with the income and the parents will get a definite tax break. Maribeth

Mike, the 1099-Q doesn't go anywhere. You compare the tuition paid with the amount out of the 529 plan. As long as the tuition is equal to or more than the total distribution from the 529 plan, then nothing needs to be reported. However, I always look at taking the income on the child's return and the education credit on the parent's return. In my experience, that is always the most beneficial way to go. Maribeth

If the partnership income is partnership ordinary income or rentals, you will have to file the return for the child. It cannot be included on a return filed by the parents. The child will get a standard deduction of $850 and no personal exemption. That will leave about $1500 in taxable income. Without working through the return, I would guess that will come out to about 10% on the lot. hth, Maribeth

That is correct. The standard mileage rate includes a depreciation factor. You can take a % of the interest and taxes along with the standard mileage rate. Maribeth