Pacun

That's why 100% compliance barely exists. I always said: People are as honest as the scrutiny they go through. When someone is appointed to a government position, I really feel their pain because they go through a lot of scrutiny. A lot of people would not pass that type of scrunity. I wonder if the IRS would decide to audit their taxes for the last 10 years. Would they pass?

I thought everybody knew that money found is taxable because it is not excluded by the code. Reimbursements only happens from your employer. Payment for taking someone to the airport is "payment for services". I have not seen "reimbursement for services" in the code. Maybe in an employer-employee relationship something similar happens.

It seems that he contributed $10,000 and he lost money on the stock market. No income to report but maybe a loss, regardless of what he did with the money. Since that money was invested after taxes, he shouldn't have to pay taxes again.

Excellent point. 100% in agreement with you. The ones that participate heavily on this forum are knowledgeable and ethical preparers. Even here, where the level of knowledge is similar, we have issues coming to a consensus. I remember what an IRS revenue agent told me: In most cases, there is not such a thing as 100% compliance but acceptable compliance. I said, now that you mention it, 7 years ago, I forgot to declare $30 that my friend gave me when I drove him to the airport and I also found a 20 bill a couple years ago in the parking lot. I thought I was in compliance 100% but I guees not. Do you think, the IRS prefers 100% compliance and I should amend my return for those $20? Or do you think materiality is considered by the IRS? How about if I forgot to report $40, $100, $300, $1000?

There is another posting about dissolution that was not approved by NY, and they filed a final return. To me, they should amend the old return and file this year. Going back to your question... I am assuming that we are talking about a calendar year corporation. If someone comes to you and tells you... I decided to get divorced on December 31, 2010 and I submitted the divorce papers that day, will you file as single? The answer is no. Why will you file a final return when the corporation existed on January 1, 2011? Assets are not a big deal since they are so little. I wouldn't worry much about it.

Can I efile when I am using form 4852?

No ITIN for dependents in any other country than Mexico, US, Canada.

Don't complicate yourself too much. 1 and 2 could have a qualifying relative and earned income. With a qualifying person, age doesn't matter except that your qualifying relative needs to be younger than you.

This could be a perfect question for the EA exam: Who cannot get EIC under any circumstance: 1.- Someone who is 15 year old. 2.- someone who is 66 year old 3.- Someone who files MFS 4.- Someone who files HH and claims no dependents because is divorce and non custodial parent is claiming the children. If you are going to take the EA exam, remember this. Answer 3.

Attach a nice letter explaining that he qualifies for the 8K to the 1040X and HUD-1 and contract (if applicable). Include deployment letters and any documentation that proves he was deployed and proof that he is living in the house.

If he comes back from extended duty... it might be a good idea to request the 8K when he gets back. Remember that he has until April 15, 2014 to claim the credit by amending 2010.

You need a 1040X as the main form. The IRS already has the 1040 which is used when you originally file a return. If you need to amend, you fill out a 1040X which replaces and 1040X on your shipment. Following your logic.... What do you do, when you amend a 1040 before April 15 (filing deadline), which can be done with a regular 1040? You send two 1040s with two set of schedules? That will make three 1040 sets in the hands of the IRS. Let's say that your client forgot a W-2. Your client is single and reported originally 20K. The new W-2 is for 4K and he asks you to amend. You send a new 1040X with explanation for the lines that changed on the 1040X and attach ONLY the new W-2. Another client whose AMT will quick in with the new W-2, needs to send 1040X, W-2 and AMT form. Another client whose EIC will be killed with the new W-2 form needs to send 1040X, W-2 and a check. Why will you send the EIC form with the 1040X just to show the IRS that that form was changed from 3K to 0, if technically you should have not used it on the first place? Maybe sending the original form has passed from generation to generation. I imagine that in the 60s or 70s, when the IRS was not using computers, having the originally filed 1040 was handy for the person at the IRS making the calculations. Now the IRS is using a more robust and BETTER software than ATX.

When you amend a return you send form 1040X with explanation and you must sign that one. You include schedules and attachements that are new or that changed as a result of your amendment. That's all you need.

The client signs 1040 and if 1040 is not going to change, I don't see any problem. How many times has the client forgotten to verify if they have income interest? What do you do, you make them go home to verify and then come back to sign? I am adding this: I finished everything, except that I mentioned the Debt forgiveness on line 21 and a deduction on the same line. I told him the end result is the same but I wasn't sure where I was going to report that he qualified for "not paying taxes on debt forgiveness because it was primary residence" (Condo where he lived for 4 years). Client gave back the condo because he is retired and cannot afford it anymore. He never refinance and he lives far away from my office and uses a walking cane. In any event, I told him, "if your refund changes", I will need you to sign again. I will call you when ready to efile.

Report two sales with its basis. You might have a profit on one and a loss on the other depending on your basis. If you have a gain, you have to recapture depreciation and it will become ordinary income.

This happened to me and it is scary. In 2008, client had two dependents. In 2009, I rolled over client and the child on the first line was no longer a dependent. I deleted everything every entry on the first line and then I type the second line on the first line. Then I deleted the second line. When it was time to print, the name of the second child (the only dependent) appeared correctly and everything looked good. After carefully reviewing the information, we realized that the social security number was not changed. Another problem that I have realized, is that if you don't move the cursor to another field, the information saved is the old one. For example, if you change the account number, and then save and efile, the old account number will be sent because you didn't move the cursor away.

MFS is even harder on TP. The ony time to go this route is when the spouse doesn't trust the supporter and doesn't want to sign a joint return.

Do you have to use a full year or you can use a short year in the year of death so you go with calendar year?

I just sent one yesterday for 2007. I like to use the year amended because it is so easy to amend. For a minute I thought I sent the wrong form but now I feel more confortable.

You ask for the basis for the FMV of the house and you add the cancellation of debt. That will give you amount of what the client owed which is normally presented on the 1099-A. Remember that the IRS is more interested on the 1099-C than the 1099-A.

Thank you. I have commented before about 1099-C and I now remember the form 982. When I had the client in front of me, I didn't remember any of this. I told him that he was not going to pay any taxes on the 1099-C. I told him to sign the efile form and that I was going to call him when ready to efile.

If they are legally married they have only two choices: MFJ or MFS. If they lived apart for the last 6 months of the year and a child live with the husband and that home was the main home for the child in the U.S., he can qualify for HH. You can only claim your girlfriend as your dependent if you support her more than 50% and she lived with you all year.

I checked line 21 but I have to deduct somewhere else.

Where do I enter 1099-C cancellation of debt in ATX? Primary residence so no taxes paid.

It would be nice if you could efile.