JohnH

Speaking of NY and taxes, I have a question. An acquaintance derives his entire income from SocSec and investment income. Presently he lives in FL part of the year and NC the other part. His permanent residence is in FL, so he pays no state tax on the investment income. He is thinking of continuing the living arrangement, but the non-FL months will be spent in NY. Is NY likely to try to tax his investment income for the months he resides in NY, provided he continues to maintain the FL residence?

That's what I'm doing - tell them about the link and let them handle it. There's no way I'm getting anywhere near actually filing the FinCen 114.

Bingo Rita. And I find that the opposite is often true. People who give generously will frequently understate the value of their non-cash contributions. I'm thinking there's an element of perspective there that a stingy giver lacks. I'd like to see the deduction for non- cash contributions somehow capped based on a percentage of cash contributions.

I don't mind charging the client in this situation. I followed the rules by not mentioning it when the original return was prepared, and I'm following the rules when I handle the response if a CP2000 comes. Personally, I've never seen but a couple of CP2000's in this type of situation. Both were a bit unusual and understandable in hindsight. (But maybe I'd handle it differently if I lived in a different state.)

For amounts this large, they should invest in "It's Deductible" or another of the charitable contributions calculators. It will help them follow some discipline in valuing their donated items. For the most part, a $100 shirt and an $25 shirt will have roughly the same price on them when they get sold at Goodwill. People don't like to hear this, but it's true.

I tell them they need to take things up with Congress, AND that they remember their tax returns every time they go to the polls in November.

The banks shouldn't have any sort of preference, other than a preference for the facts. If they spent $27K related to their jobs, the bank should certainly want to know about that. But $27K related to one's job would not be itemized deductions - it would be business expenses. Any banker who doesn't want to know about that is a sorry excuse for a banker. (But I also think we may be combining bankers and loan brokers in the same conversation - they are different animals. The one thing they have in common is they generally know very little about taxes).

Will the banker tell them you are a good preparer, or will the banker tell them their preparer is preventing them from getting the loan? :)

I'd ignore the email, or else just reply that we will let him know when the return is ready. I wouldn't even acknowledge the reference to the lender. If he asks about it later, I'd just tell him he is my client, not the lender, and that I don't have conversations with lenders. There is some sort of worksheet the client can look at. It's called the tax return. The client does have the option to review the return before you e-fling it. But if he comes up with any "adjustments" I'd tell him there will be an additional charge for the changes (that is, assuming the "adjustments" are valid). If there were any questions in my mind about the adjustments, I'd do what jasdlm did.

Also see The Tax Book, Page 13-9. (I'm sure QuickFinder has a similar page reference)

Yes, she can open/establish the traditional IRA and contribute to it in the current year and deduct on the 2013 return, provided she does it by Apr 15.

Surely the state has a way for the client to obtain the username and reset the password. Maybe you should consider getting paid up front before doing anything to help him, though.

When people have to pay more tax because their investments performed well, I always tell them they should be happy. Every now and then it actually works.

Thanks, but this has nothing to do with suspension of the charter and reinstatement, or anything to do with the state. I'm asking about IRS rules. A testamentary trust can only remain a shareholder in an S-corp for 2 years. I'm just trying to figure out when the 2-years actually ends, since the trust did not dispose of the shares to eligible shareholders within the allotted time. I'd like to use a clean calendar year end just to save some extra work, but I think they are stuck with two part-year returns.

I don't call them "Dear John" letters. Just sayin'...

Taxpayer died on July 8, 2011 and all of taxpayer's assets went into a testamentary trust. Among the assets was some stock in an "S" Corporation. Heirs failed to get the stock out of the "S" Corporation, so now the election is terminated. Not really a big deal since the corp is small, marginally profitable, and has not assets or BIG to speak of. So here is the question: Does the S-corp election terminate on Jan 1, 2013 or July 9, 2013, or Dec 31, 2013? I think the date is July 9, 2013, which will necessitate the filing of two tax returns for the year. But I'd like to hear if anyone has a different opinion.

If any client tries to choke me, they're getting a "goodbye" letter from me next tax season.

Yes, xtranormal discontinued their service. Some of their videos are still on you tube but I haven't been able to find the ones I want. I'm glad you like " I'm billing time". If is my favorite as well. The bar and grill singers also have some other ones that are pretty good.

Yes, that's it Rita. ...xtranormal videos... I can't find the ones I was most interested in, but these are also pretty entertaining. You live up to the name...

So, JB. Are you practicing what you're going to say to her if he bolts after the IRS gets hot on his trail?

Child age 16 at EOY. This is one of those situations where an email to the client is a very good idea. I usually just tell them that if the exact same return were filed the next year, their refund would be $1,000 lower. Then if they forget my warning and start complaining next year, I show them the email (or re-send them a copy).

There may be plenty of reasons why she wouldn't want to file MFJ with him, irrespective of what he wishes to do. . If there are W-2's or 1099's floating around with his SocSec#, then there may also be SFR's out there. Maybe the system hasn't been able to catch up with him due to address changes, non-filing etc. So when a return goes in with his SocSec#, the computer is going to pounce. If it's a MFJ return, then the refund will be seized or reduced If it's a MFS return, the system will now have a current address for him and maybe some ugly notices will follow. But not to worry - love conquers all.

I file lots of extensions, but only once or twice have I filed one without first speaking with the client and obtaining info on any taxes withheld. An all-zero extension is invalid because it obviously isn't based on having made a reasonable estimate of the tax liability, which is the one reason IRS can retroactively deny the extension. It will fly if there is no audit, so it's better than nothing. But I would not represent it to a client as a valid extension. Some of my regular extenders forget how this works, and they will call, text, or email me and say "I want to just file an extension" . I always tell them I will need their w-2's, 1099-R's, SSA-1099, and anything else which might show any significant withholding tax before I can complete the extension. In over 30 years, I have only seen one extension invalidated. The extension showed all zeros, the return was filed prior to Oct 15, the return was audited a couple of years later, and the auditor assessed a 25% FTF penalty because the extension was not based on a reasonable estimate. (I was not involved in the original extension, return, or audit - I was just asked to review the results)

The 1099-R should have an account number at the bottom. If an account number is also showing on the check transmittals, that should close the loop for you.

If the K1 reports UBTI, and if the amount for all K-1's happens to exceed $1,000, then the IRA might have some Form 990 reporting to do.