JohnH

This is an interesting question. In the contracting business, it is normal for customers to require proof of workers comp and liabiity insurance from vendors as a condition of awarding a contract. But the main reason is to protect themselves against worker comp claims and also because litigation is common in that industry when liability issues arise. Applying that same logic in a client situation triggers the thought that the client is already thinking about assigning blame if something goes wrong. I might be inclined to make the decision based on the complexity of the return. If it has the potential to be unusual in any sense, then declining to take them on as a client might be the best route. So agreeing to provide proof of insurance would probably best be contingent on the outcome of the initial meeting.

Have you looked at the county assessor's web site to get a history of the property? I took a quick look at a VA county for example (Fairfax), and it was chock full of information. Once you identify the property and go to the property card, there is a menu at the top left quadrant with a complete history. It listed annual tax assessments and dates & amounts of sale, for example. Don't know if all VA counties are in the data base, but it would be a great source of supporting documentation. In my state (NC), I've gotten in the habit of checking the real estate lookup for missing info on a routine basis. I often use it to get missing property tax payment dates, amounts, etc rather than waiting for the client to provide it. Plus, when there's a purchase or sale of a rental property I routinely pull the property card and print out the info as supporting documentation for purchase/sale dates, calculating land value, etc.

Wondering if some contemporary worship leader has produced a mashup...

Part of the reason I suggest listing the total paid to the PEO and then backing out the Officer/SH wages is that it discloses the source of the Officer/SH wages. If the return were flagged for having reported wages without any 941's being filed, and if someone looked at it in a review, they would be able to see where the entry originated.

What about a line item on the “Other Expenses” Line 19 supporting sheet for “ PEO Outsourcing / Leased Employees” followed by a negative entry for “Officer/Shareholder Wages” on the next line? Then enter the “Officer/Shareholder Wages” on Line 7 of the 1120S.

That's one of the many benefits of using email/text communications as the primary means of communicating with clients. Avoids wasted time talking on the phone or sitting in your office After a many-years-long effort, I'm down to maybe a dozen clients who don't use email or text as their primary means of communication. To be honest, I'd get rid of them tomorrow if they weren't special cases (good friends, charitable cases, etc).

What software are you using?

I used to say that of all the hair stylists I've ever been to, none ever offered me tax advice but most would ask for it. Eventually I came to realize that most of them already knew the answer and they were probably just testing me to satisfy themselves that I really knew what I was talking about.

Can't you tell him you'll be happy to prepare the return for his sister if she wants to engage your services? People often ask open-ended questions about third party situations, but they usually understand if you tell them there are too many potential traps to discuss an isolated tax matter without knowing the whole picture. I know everybody works differently and I'm not saying everyone should do this, but I encourage my clients to text and/or email me at any hour. That's the great thing about email and texting - their question has been duly noted. Sometimes I go to bed late or other times I'm up early, and can fire off a quick answer right then if it's appropriate and if I choose to reply at an odd hour. But when I go to bed I turn off notifications so there aren't any sleep interruptions. The message will be there when I wake up, to deal with at my convenience. And absolutely zero time wasted on a phone call. Texting and email are your friends, provided you manage them instead of allowing them to manage you.

Sounds like my client several years ago who said her son who was a sole proprietor had formed an LLC so he could save on taxes. When I asked how, she said it Limits his Liability for taxes. All he had to do was fill out this form and send it in to the Secretary of State with a $100 check. My reply - "That's not how it works. That's not how any of this works !" Thank God she didn't say he wants me to take him on as a client since I'd have said absolutely not. Fortunately he was going to do his own tax filing, which was probably best all around.

That's why I posted the statement in its simplest form. Whenever an incorrect answer is posted, someone rings in with a correction. That happens on other forums as well, but the tone and tenor of the correction tends to be more civil over here. There have been a few times when the discussion went off the rails & got combative, but the general nature of the conversation here is collaborative and supportive.

The only thing I place absolute faith in is advice from the people on this forum

These rates are still a bargain for a taxpayer who can't pay. Even after adding the FTP penalty, they're getting a reasonable interest rate for what's essentially an unsecured loan.

He's wanting you to "massage" the numbers. I guess you told him that train has already left the station. (Or perhaps the cat is already out of the house). The possibilities for mangled idioms in the situation are truly mind-boggling.

Jack: You could tell that person who worries about an audit that you know a tax preparer who hasn't filed before Oct in over 30 years and has never been audited.

I filed my first extension on Jan 29 (my own). I'll begin filing client extensions on everything that comes in on March 19 or after, no exceptions except for very simple returns that can be completed on the first pass. Many extended returns will still be completed by Apr 16, but at least I don't have to circle back or even give it any thought. I like to makes Apr 16 just another day at the office.

Sometimes when I try to explain something in the tax code to a client they accuse me of speaking a foreign language.

I could use those in my office. Would make it easier for my clients to see their contributions and business mileage figures when I ask about them and the client looks up to the ceiling to read off the amounts.

After all the time I've spent staring at this return, I think a couple of pints are in order.

After sleeping on it, I went back and double checked everything this morning just to be sure I'm not missing anything. With a 6/17 sale date, my software (Drake), reports the pro-rata amount of current year points on the schedule E, but then reports the unamortized points on the 4797 with a zero selling price. I'm not sure it makes a difference on this return because the client has large suspended losses and also a large capital loss on the property (even after adjusting basis for depreciation). But if there were capital gains on the sale, it would matter whether the pints were on the Schedule E or the 4797.

Thanks. After giving it some more thought, I suppose the 4797 is the logical place for the unamortized points to go. I think I was expecting them to show up on the Schedule E for some reason. Probably because unamortized points on a home mortgage show up on the Schedule A (same form where the annual amortization deduction is taken). Anyhow, thanks to both of you for the replies. Makes me more confident in accepting how the software handled it.

I think you'll need to report the income for 11/1 - 12/31 on the NC return and also on a SC return, then attach a SC schedule TC to claim a credit for the tax paid to NC. The SC income allocations worksheet will walk you through it once you decide on the actual amounts to enter, and the TC will calculate the correct amount of the credit. NC tax rate is higher than SC, so you'll more than likely net out with no tax due to SC. Your approach is much cleaner, accomplishes the same thing, and might make it through. But don't be surprised if SC sends an inquiry a couple of years from now.

This seems odd to me, but maybe I'm just not thinking clearly. Client bought a rental property in 2010 and sold at a sizable loss in 2017. We had been amortizing 11K in points paid when the property was originally purchased, so the unamortized points on a 30-year loan were down to about 8K. My software shows the unamortized points on Form 4797, Part I. Part of me says "that's an odd place for them to show up", but the other part of me says "they have to go somewhere - may as well be there". Does anyone think I should handle the points differently?

I like to keep a link to a custom excel spreadsheet handy on the desktop. This one has long columns for addition & subtraction, plus a few for multiplication and division operations. They can be color coded for a quick visual reference. And if a tape backup is needed, I just hit the "print" button.

I was pleasantly surprised to learn that a paper return filed by a client on Feb 6 resulted in their refund being deposited to their bank account last week. Especially since I'm always hearing how paper filing creates SEVERE delays for refunds.