artp

The amounts I listed were the taxable amounts. Art

Elderly clients intended to exchange annuity contracts with Company A to Company B. They mistakenly had Company A send them a check which they cashed ($ 20,000) in March 2009 and then invested in the new annuity with Company B ($20,000 + additional cash =$ 25,000 total) also in March 2009 per discussion with their “financial advisor”. Company A issued 1099-R code 7. Clients said they never received the 1099-R and were unaware that they had a taxable event when the annuity was cashed. Nothing was reported on their 2009 return. IRS issued CP2000 in June 2010 for the taxes on 1099-R. Has anyone been successful in getting the IRS to grant 1035 treatment in a case like this? Advice on how to proceed ? Thanks, Art

ALERT CLARIFICATION The $ 229 price for the regular $ 699 package is only good through tomorrow per Morgan at TRX. Art

I did successfully down load the TaxExact Premium demo. I intend to test it out this summer as time permits. I was offered the special renewal price of $ 299 for the full package TRX Pro (reg $ 699). I was told by TRX rep that if I renewed by 05/31 I would have until Dec to make a final decision if I wanted to stay with the TRX package or go with the TaxEaxct Premium package. They will be offering on line training during the summer. I agree with Mike. I generally had only a few issues with the software this year--support was OK, but nothing to write home about. I too would like not to learn a new software, but these days we need to be flexible. Art

Anyone else getting e-mail meassages from TRX on this new product for next year ? I think it is their own in-house tax software ? Message makes it sound like I was requesting this. They had link to download a trial version. Never happend on my end. I wonder if they will be offering the $ 299 special deal on this too. Pushing for renwals in May. Art

Client age 23 graduated from college in June 2010 and accepted an elementary teaching position in China starting in Sept 2010 thru June 2011 as part on an international educational program. Her visa will expire in June 2011 so it appears she would not qualify for physical presence exclusion unless her employment contract is renewed. She did not receive a W-2 form. The only document she has received just lists the Chinese taxes deducted from her pay. This was written in Chinese and she had a TA translate it into English. Her gross income from teaching in 2010 is $ 5300 US$. There was $215 deducted for Chinese taxes. How does she report the income on her 1040? Wages line 7 with no W-2? Schedule C? Subject SE Tax? Can I e-file this return or paper only? The language in her employment contract with the Chinese school would (under US rules) seen to make her an employee since they control all aspects of her work, but I am not certain that this is controlling for a US citizen working abroad. I have not prepared a return like this before so I would really appreciate some guidance here from anyone who has experience with US citizens working abroad. Art

Jainen, Thanks for the quick reply. I was hoping we might find another solution. Client will have a 5K refund coming on this year's return and might be able to find a way to finance the rest. Art

Client (company manager) was injured in auto accident (company auto) in July 2010 which resulted in substantial time off due to his injuries. The other driver was at fault and is paying claim damages. He tried to perform what functions he could, but was unable to work and was placed on worker’s comp. His medical bills have been covered so far by the other driver’s insurance company and his medical policy with his employer. In Aug he borrowed money (40K)from his 401-K at the company to cover living expenses. He requested that his employer allow him to make payments on the loan while he was on workers comp (his wife has a job), but they refused. When he was released to go back to work in Dec 2010, his company terminated him immediately, claiming loss of business during the current economic downturn. He has only recently been able to find employment, Meanwhile, the administrator for the 401-K plan sent a letter in March 2011 threatening to treat the loan as delinquent which according to them would mean that it would be a deemed early distribution and be subject to 10% penalty since he does not meet any of the exceptions. So far he has not officially been notified that the loan is indeed in default. 1. Is this the correct treatment for a “defaulted” 401-k loan? 2. Can the company refuse to allow repayments on 401-K loans when an employee is on worker’s comp and is not receiving a pay check from the company? I suggested that my client contact the plan administrator to see if some payment arrangement could still be worked out to avoid a taxable distribution and the accompanying penalty. He is also pursuing legal action against his former employer. Has anyone come across a situation like this in their practice ? Any suggestions would be welcome. Thanks, Art

Don, Thanks for reply. I will give it a try. Art

How do I get the DCN for an e-filed return processed thru TRX ? The Federal E-file confirmantion has a Submission ID #, but that does fit the DCN input for Form 8453 which I need to file to transmitt a Form 4852. I tried several times to get an answer from TRx, but they could not assist me. Has anyone done this with TRX ? Your assistance is appreciated. Art

Thanks again for your help. Winding down to the 30 returns, hopefully. Art

Thanks Mike, I missed it. BTY I assume you can still e-file if you use this form. Does it slow down the refund process ?

Client has been unable to get W-2 from employer. We have final 2010 wage and w/h info. Instructions say to enter on W-2 input and also complete Form 4852. Do not see this available in TRX package-not on forms list. Help

So if in my original example there was an annuity within the insurance contract with the same amounts as state from the insurance company there would be a deductible loss ? Art

I did look at the ruling you cited, but it appears to only deal with gain situations, not losses. Is there something I am not aware of here ? Art

How do you handle this situation ? Facts: Total cash value $17,913.26 Surrender Value $ 16,294.86 Premiums Paid $ 25,431.28 Cost Basis $ 27,673.00 The above info was sent by the insurance company to my client. There were no loans on the policy and no interest credited. Would the $ 11,378.14 (cost basis less surrender value) be a deductible loss for tax puposes ? Where to take on the return ? I thought I had seen some discussion that there are two possible ways this might be handled. First, the more conservative approach was to put in on Sch A subject to 2% limit. A more aggressive approach was to take it as a ordinary loss. I would appreciate feedback from this Board. Need to get this resolved to file his return. Thanks, Art

Thanks. I missed seeing it. Art

What is the status of availablity on this worksheet ? I have a clergy return that I am trying to get completed. Last year (2009) TRX program had this worksheet available, but I can not find it for 2010. I have sent an email to support, but no response. Art

I posted this on the web site you suggested, but I did not see a specifice forum for TRX on that site so I am repeating it here. What is the status of the TRX 2009 conversion of ATX 990 ? We have a 990 that we need to get out early this year. It was prepared on ATX in 2009. We need the files converted before we can up date to the TRX 2010 program. Thanks, Art

Looking thru the IL 2220 instructions I do not see a prior year's tax exception for corporations like there is for federal 2220. Is this correct ? I have a small corporate client that generally has less the $ 400 tax liablity in IL, but expects next year to be much higher. How can we protect against underpayment penalities if there is no prior year tax exception and our estimates for 2011 turn out to be understated ? I know you can use annualization, but short of that is there anything else we can do ? Art

For those clients that have extensive fixed assets I have always printed a "next year Depreciation" sheet to give them a starting point for next year planning. ATX has had that feature for many years. I contacted tech at TRX and they said it is not available. Has anyone else run into this issue ? I would like to suggest that this feature be included in the future. If Ryan is on this board, could you please reply ? Thanks, Art

Thanks for the timely responses and confirming my initial thoughts. Looks like this was missed on the 2009 return as well...so will need to amend. Nice to have this forum to assist each other !

Ryan. Sorry, but that is only for SE calculation. It has nothing to do with the 1040 return qualifying for special farm return treatment that I discussed above. Art

Is W-2 income from serving as a National Guard Reservist deductible on Sch M as qualifying "Military Pay" ? The income is being reported on Fed 1040. From the instructions for the Sch M it appears to qualify. I would appreciate feedback from IL preparers. Thanks, Art

Has anyone prepare a farmer's 1040 on TRX this year? I have tried to find an input screen to mark the return as a farm return (more then 2/3 of the taxpayers income is from farming). This type of return needs to be filed by March 1st and estimate taxes are not required so it is an important distinction. In ATX there is a box to check in the general information screens, but I can not find a similar input in TRX. I have called tech support twice and only got some rookie who didn't have a clue what I was taling about. I have also send an email to tech support-no reply. I would appreciate some guidance. Thanks, Art