jklcpa

Yes, I realize that. I was only answering about how we could use a program that we might already own to track these assets if one chooses to do so, because someone made the comment about creating separate schedules.

This is from the MAX page (sorry can't get rid of the bold, stupid formatting) Expert Tax Research & Learning: CCH® U.S. Master Tax Guide® (print, online & mobile) Tax Prep Partner 1040 Lite (online & mobile), Includes detailed explanations from the experts at CCH, real-world examples, cautions, compliance tips and more And here is the brochure for the full version of the Tax Prep Partner research. Under Integration it runs on the IntelliConnect platform and that it is accessed from within the foundation product ProSystem Fx, but doesn't address the Lite version that is included with ATX MAX. If the Lite version is truly integrated within MAX also, wouldn't it be launched by clicking on the Research icon across the top of the MAX program? Whether or not it requires separate download or log in isn't specified.

That's a question for your state. You might check KY's website to see what it accepts by e-file. If it accepts more than ATX will transmit, then it's a software vendor issue, but if KY accepts only individuals and no business returns or only certain ones, then the issue is with the state. Currently my state of Delaware is currently accepting only C Corp returns on DE Form 1100, and our DOR's MeF isn't programmed yet to allow e-filing of of any other business returns. The C corp e-filing only came online 2 filing seasons ago, I believe it was starting with the 2013 returns.

If you have a good depreciation program for your accounting clients, it might allow setting up a separate category for those assets that are expensed under these rules. I use Thomson Reuter Fixed Assets CS that will allow me to set up a separate group on the main depreciation schedule, or set up assets for only "Other" method, and then I can customize the report to exclude the group entirely for tax or book purposes, or include it so that the property tax reports would be inclusive.

Peter, I've tried sending you a PM, but I think the comma in your username is creating a problem. I am receiving a message that I'm using an invalid user name. Please try sending me a private message so that I can respond to it, or please edit your username to remove the comma.

That is because of the Delaware DOR and its e-file system, not because of any vendor's software.

John, while all of that is true, Drake is far less intuitive and may not be the best choice for this new preparer. That brings up the issue again on placing too much reliance on the software as a crutch though, but it is up to him to choose what best suits his methods and needs.

It's investment interest expense subject to the usual limitations.

Well, Peter, if I may speak for everyone here, you insulted almost all of us in one way or another. First, you insulted EAs directly. Second, you insulted the ATX program that almost everyone here uses successfully and has done so for many years, and most here really enjoy the program and its features. Third, you insulted all of the CPAs saying we are all anal and thereby also insulting anyone else that isn't a CPA by implying that non-CPAs aren't sticklers for detail or that their professional designations were somehow easier to obtain. Then, you insulted me indirectly by not listening to my posts where I basically hand held you through the mechanics and some theory related to Delaware nonresident returns until I gave you some of my background. And now lastly, you've insulted all small firm owners as being "greedy" and making you "bend over backwards." After I gave you the first answers and a link to the instructions, you should have gone back and used that to learn about the form and where you were going wrong in your preparation, and not continued on in an argumentative tone about what should be included on the return. Also, I have to say that firm owners or supervisors in tax prep firms, whether they are CPA or EA firms, are not able to devote this level of hand holding to each individual member of staff, especially when things heat up and the season gets rolling. I know because I did the hiring for the firm I worked for, was the supervisor that had to keep work flowing and help the underlings, and did about 85% of the review of products before they were finalized. Our group here is comprised of mostly very knowledgeable and well-seasoned tax professionals that don't feel the need to put out all their credentials in their usernames or signatures, and we all give freely of our valuable time to help each other. I'd also venture to say that most of us are also the firm owners, a mix of solo preparers and those with employees.

Because we've hashed some of that out, the topic has now been derailed. Let's try to get this thread back on track by discussing the ATX handling of this return and its input. If anyone would like to start a separate topic on the merits of the various professional designations, that would be fine too, as long as it doesn't lead to personal attacks. Thanks.

Jack is correct in his statement that ATX is a quality product in the right preparer's hands. Each of the programs the OP mentioned would be able to do this return in question, but each tax preparer must still know the rules and proper reporting of the items on the returns, and should never rely solely on any piece of software to produce a result without knowing when inclusion or exclusion of an item is proper. Relying on any software without knowing what's right or wrong is a crutch to be avoided and will only lead to errors on returns. Knowledge and experience are equally or more important than the amount of professional credentials or letters one can list after his name. Still, we all were newbies at one point and had to start from there. I don't care if it's EA, CPA, RTRP, or whatever...I've seen the good, the bad, the ugly, the unethical, and the incompetent preparers in each of those designations. Over the years I've also seen some bad professionals that must have been good at test-taking, but they surely couldn't apply what they learned. I've also seen CPAs with MSTs that were excellent and specialized only in the tax area, and other CPAs that worked in audit that couldn't even do the most basic of returns. I don't think we should make blanket statements about what CPAs can or cannot do, or EAs for that matter, because I've seen the work of some unethical EAs too, so I think we should look at what experience each person brings to the table and go from there. Thanks, off my soapbox now.

The ATX NJ Sch A/B/C input form should have tabs across the bottom. One of those should be for the Sch A info to tell the program how much income and how much tax was paid to each out of state jurisdiction.

You might have to override the filing status on the DE to put an "X" in the box for MFS. If ATX is still like it was in 2011, I always had to override directly on the form by overriding MFJ to be blank and overriding to check the other box. I'm not sure if ATX has added a new way to accomplish this in the last 3 years, but I seriously doubt it since it seems that DE doesn't get much attention from the programmers.

ATX should be able to handle that return pretty well. Input everything and make sure the Federal is correct. Make sure to designate the W-2 income by state as reported on the W-2s. On the DE input, you should find a place to select the filing status of MFS for yourself. The DE 200-02 should be produced with only your items of income, although the front of the return will still show your wife's name and SSN. DE uses that to know that she hasn't had any reportable income for DE purposes. If you have children or other dependents, you are allowed to give all of those to yourself, but do not include your wife in the number of exemptions on your DE return if filing MFS. ATX does not fill in the # of exemptions automatically on the DE MFS returns for this reason, because the TP and SP may choose to split them in any manner they choose, except that you can't claim your wife if you are filing MFS because each of you claim yourselves. The program should be able to produce a DE return for only you, and it should put only your DE wages from the W-2 input in col 2 if you've done the input correctly. On the NJ 1004 input, you'll have to enter the 2-digit abbrev for DE (I believe the DE abbrev should be "08") to tell the program that you've paid taxes to the State of DE. The program should add the NJ Sch A for the credit for taxes paid to other jurisdictions. I'm not sure if it will pick up the DE AGI and DE taxes or if you'll have to enter those on the NJ input, but that should get you on to the correct path with this.

I reread your posts. If your wife has no DE income then she doesn't have to file a DE return at all, and if you are the only one with any DE income, you are the only one required to file a DE return. You have the option of filing a joint return for DE or one with only your income on an MFS basis. If MFS for you alone, col 1 must include all of the income that would be reported on your Federal return AS IF you filed it MFS also. That is where the AGI worksheet is helpful, as a review technique to make sure that all income is accounted for.

ATX produces a schedule of the Federal AGI with a total column for Federal and will show the breakdown by TP and SP. If only you work in DE and your wife has no DE income, then only the person with DE income needs to file a DE return, but the DE return, page 2, col 1 must income ALL of that one person's Federal income. Col 2 will report the DE-source income that will be used to calc the proration % on page 1. I can tell you almost with certainty that if the person has worked all year in DE with decent income, then it will almost always be beneficial to file the DE return on a MFS basis because of the graduated rates. Even for residents, this is true, and the only returns I have where it is not beneficial is where one of the person's in the couple has low enough income that the gross tax for that individual is less than the exemptions and other credits where some of that tax benefit of the exemptions is lost by filing MFS. In those cases, the joint calcs must be run to see if the loss of tax benes still outweighs not subjecting the taxpayers to the higher rates in the higher brackets that might result from choosing to file joint.

Congrats on becoming a CPA. Again, I can't say why Pro-fx did that, but I'm surprised the partner said it was OK or that DE didn't send a notice. If both you and your wife have DE income, the col 1 of the 2 returns should definitely add up and agree with the Federal income. Perhaps you got lucky and it fell under the radar, but I wouldn't be comfortable filing the return as you described and you may yet receive a notice. BTW, I've worked solely in public accounting since 1981 and have been a DE CPA for over 30 years, if that means anything to you. One cannot rely SOLELY on any program for proper reporting. If the input isn't exactly correct, any program could spew out incorrect reporting. The preparer still has to know that the resulting output is correct. You'll have to read the instructions I linked to and decide how the income should have been reported.

Preparing DE returns with ATX has always been fiddly, especially when multiple states are involved. It never handled the credits easily and often times required overrides. I can tell you that Drake handles it easier, once you are used to the input, but it is not for everyone. I have much less forcing of the numbers to get the out-of-state credits to calculate properly with Drake than I ever did with ATX, and I used ATX almost since the beginning up through 2011. For out of staters needing a nonresident DE return, Drake allows for calculating the joint or split return, but the split is calc'd for only one DE return. In other words, Drake can only prepare one DE return and the preparer still has to create a second return if the spouse also needs a DE return where MFS is more beneficial than joint.

Here are the instructions. Note on page 4 in red where it says that Col 1 should include all items of income reported on the Federal return as if the taxpayer is a full-year resident of Delaware. Where it says "except for filing status 3" says that because the preparer would be splitting all the Federal items between TP and SP, but still requires that ALL items attributable to that person be included in Col 1 on the DE return. http://revenue.delaware.gov/services/current_pit/TY09_200-02Instructs.pdf

Peter, the Delaware 200-02, page 2, col 1 (the left-hand col) should report ALL income shown on the federal return for that individual if MFS, or all Federal income for both people if filing DE on a joint basis. Column 2 on page 2 is where the DE sourced income is shown. Delaware changed this years ago to include all of the income and all of the deduction and exemptions on a total basis based on the Federal income in col 1. From there the DE tax is calculated on the total of all income, no matter what state it is from. Only then is the proration calculated for the DE sourced income reported in col 2 as a % compared to the total, and that % is then applied to the tax. In that way, the income has the potential to be taxed at a higher rate because of the graduated brackets that DE uses. I can't answer why Pro-System handled it differently, but you should look at the instructions for 200-02 to see that the correct handling is as I've described above. I am a Delaware CPA.

Since I don't know what you know of DE please forgive me if this is too basic, but the DE 200-02 for nonresidents starts on page 2, col 1 that picks up all of the income from the joint federal return. Column 2 is for the DE sourced income, and you will have to fill in those numbers in ATX manually. Last time I used ATX was in 2011 but this is how I'd have to prepare each client's returns for those that were residents of PA, NJ, or MD and had nonresident DE wages or a PY return. You shouldn't have too much trouble if the DE return is joint, but you should test it both joint and MFS if both parties have DE source income because DE has a graduated tax rate. In those cases was filing MFS for DE is beneficial, ATX has always been very fiddly with this because the ATX program can't automatically produce the second return and requires either creating a second return for only the second taxpayer for DE purposes, or like the last time I used ATX was by overriding the second return for everything including names, SSNs, and all of the figures on the split return. If all of the items are coded properly for J, T, or S, you should be able to use the Federal AGI schedule that the program produces and use that for the split amounts. You have to also go to the DE 200-02 return and actually manually input the filing status to change it away from joint. Also, I think that unless you are filing the DE on a joint basis, the program may have incorrect figures for the NJ credit with the MFS DE returns unless it will allow you to enter the taxes paid to DE for each of the separate returns on the NJ resident return. Sorry I can't be more specific as I haven't used the program in several years.

Happy Thanksgiving to everyone here. I'm very thankful to know each and every one of you and to be a part of this wonderful group.

https://www.cchsfs.com/research/default.aspx#tpp On this linked page, scroll down to the "Lite" version. Lite appears to refer to the fact that it is for the 1040 series only. The lite version is included in the price of the MAX package. " Includes detailed explanations from the experts at CCH, real-world examples, cautions, compliance tips and more"

You know that doesn't go on the 4797, right? (because you keep saying "gain"). Remember I said not to get hung up in the fact that this is a sale of the entire group of assets, that you should report the individual items as you would if sold individually. What I meant by that is to use the proper forms and places on the return where those items sold would ordinarily be properly reported. The SP of the inventory will be included in gross revenues, and the decrease in the inventory down to -0- at year end will effectively include the $20K of the inventory cost in the COS section of the tax return. The $46K of ordinary income from the sale of inventory will be included as part of the gross profit on the corporate tax return.