JohnH

Chances are GA will want their pound of flesh as well. If so, NC will allow a credit against the NC tax liability, limited to th lesser of the GA tax or the proportional NC tax on the gain. You us schedule TC to do the math, and attach a copy of the GA return to the NC return to support the entries on the TC.

Terry - there are states which require mfs when one spouse is a resident ndthe other is a non-resident or a part year resident. Until a few years go, SC required this treatment by NC residents when one spouse worked in SC and the other did not. But as you say, NC has a fairly straightforward way of handling this situation.

Taxbilly: The NC return piggybacks off the Federal return. They will retain their MFJ status on the NC return. There's a place in the "Data" sheet of the NC FOdm D-400 to indicate residency status - that's where you tell them he's a part-year resident and she's a full-year resident. There's an income allocation worksheet you can click through to when the NC return is being fillet out (not a separate shedule - you bunny hop to it from Line 54 on the back of the NC Retur. Once you work through the allocations of income you'll see how it all fits together. If there happens to be any taxable SocSec income on the Federal, it will be wiped out on the NC return. Remember that NC exempts the first $2,000 of private retirement benfits (more for Federal retirememt benefits and certain other ones). I don't know if that allocates for a Part-Year resident or not.

If I were president, I'd change presidents. And although I'm not president, my answer is still the same. Hopefully that task will be accomplished in about 20 months. :)

Your sub-title also reminded me of one of my favorite quotes. Many years after Waterloo, the Duke of Wellington was attending a diiplomatic function in Vienna. As he entered the room, the French officers all turned their backs to him to express their contempt. The hostess offered an apology for their rude behavior, to which Wellington replied "I have seen their backs before, madam!"

True, but the paperwork for their designation should always contain wording to the effect that "This amount shall remain in effect for all future years until changed or altered." Lots of tax sins of omission can be covered by that little statement...

Agreed, provided the responsibilty to remove the piece was understood up front. I got the impression from the OP that the rules were arbitrarily changed by the university in the middle of the game. As I re-read it, this may have been an erroneous assumption on my part.

First time I'd seen the term used this way, but it makes a lot of sense.

Wonder how likely it will be that the university ever gets cooperation from another artist once word gets out about the shabby way they handled this situation.

I knew it all along, and now there's proof! Old Jack and Bees have been stringing us along for years, posting these outrageous personal attacks just to show everybody else how NOT to carry on a conversation on a professional forum. Now it's confirmed. So guys, it's time to 'fess up. Who's been playing Dan Ackroyd and which one has been imitating Jane Curtin all these years? http://www.youtube.com/watch?v=Y7S_XWuKpHc

I get a few inquiries about this, and I also tell them that if they simply must do this with their retirment funds, they should look for a custodian who specializes in this type of activity. The name is often a clue - the most honest name would be "Landmine Investment Advisors", or something to than effect.

Tell the client that the "red flag" bull has already left the barn. The 1120s with no officer salary and significant net prrofit is all the red flag they need. If he compounds the problem by taking no corrective action the red flag continues to wave. As others have wisely advised, by getting into compliance he will likely avoid any negative consequences of the existing red flag, but if he hunkers down and does nothing, the bull will eventually charge. And you both might get gored.

Good extension policy, but I like to take it a step further. I give them a rough estimate but I make sure they know it might be inaccurate for a number of reasons. Even if they pay when the extension is filed, that's no guarantee that they won't owe more when the return is completed. And I won't be responsible for any FTP penalty or interest on the unpaid amount. As long as that's understood up front, I will accept their info and file the extension. Over the years I've had one or two who griped when they owed more and had to pay some small P&I, but nobody ever asked me to cover it. (Wouldn't do them any good if they did ask anyhow). I also automatically file extensions on everything as it comes in after my cutoff date. That takes Apr 15 off the table completely and we don't have to do any looping back when Apr 15 begins to loom on the horizon. For me, making the extension decision up front makes it a lot easier to manage the workload as the filing date approaches. I think it enables me to complete more returns prior to Apr 15, but that may just be a self-serving statement. Hope you're OK, jainen.

Having a pretty smooth season here ( in spite of the fact I was in India the first two weeks of Feb) I came back with even more of an attitude that nothing much is going to bother me. We have it so good in this country that 90% of our problems and silly aggravations stem from our just having the luxury of too many options in life. So I started filing extensions on anything coming in after March 10 this year Surprised a couple of folks since I usually start extensions around the 20th, but so far nobody has chosen to take their stuff somewhere else. But if they do, then it's with my blessing.

Now I'm really confused. Every time I raise an objection to electronic filing and/or paying, I'm assured repeatedly on this forum and others that doing things electronically completely eliminates the probability of mistakes. As long as we do it right on our end, there won't be problems. Im SHOCKED at this turn of events...

But try taking 45 days to pay the tax due on your tax return and see how patient they are.

---->. That's the way the Republican Congress extended the Bush tax cuts. <------ Slight correction to the verbiage here, if I may. Aren't you referring to the "Bush/Obama Tax Cuts" ? I think its important to give proper credit where it's due, especially in the rare situation in which a Democrat actually agrees to a tax cut.

Well, if it only involves one client you could always take the dinosaur route and mail a paper one in by Certified Mail. That wouldn't prevent you from e-filing it later once the software catches up with your schedule. (I've filed duplicate paper 4868's for the same client many times for vairous reasons - never had a problem to result from the duplicate filings)

To find the latest date & time of a program update, go to the Download Center, then choose "2010 Program Updates" Then you will see this: ----> Last Tax Program Update On: Friday, March 11, 2011 12:41 PM <----

So since Monday is Pi day, does that mean we've come full circle with our wierd clients for this season?

Yes, the first $2,000 of distributions from private retirement plans is excludable from NC income. Anything that winds up on line 15b or 16b of the 1040 is eligible for this exclusion. The exclusion is per taxpayer, so in the case of a husband and wife, each can use up to the $2,000 exclusion if they have separate retirement distributions. But even if you check the proper boxes on the 1099R entry form in ATX, you still need to make the entry on page 2 of the NC D-400 in order to get the exclusion to calculate.

Good point. The more drama the better.

But that would spoil the drama, wouldn't it? With all the media, drama wins out over reporting accuracy every time.

Tom: Sounds like this could be an unequal distribution which could invalidate the S-corp election.

---> Love and money just don't make a nice cocktail. <---- Well, not always true. Sometimes they make a very effective Moltov Cocktail...