Pacun

Remember, if they lived apart the whole tax year, it doesn't matter if the other spouse itemizes. The problem is when they lived together at some point during the tax year.

Thanks for restating what I said. I knew I was right.

The fact that they are still married overrules any separation agreement for 1040.

Married people who lived apart the whole year without any children have two choices: MFJ and MFS. Since MFJ is not an option, your only choice is MFS. Since they lived apart the whole year, if one itemizes, the other can use the standard deduction or itemize also.

A friend called and said that last year he paid a babysitter $20K and reported schedule H using Turbo Tax. He withheld Fed Taxes for babysitter but he is not sure if Turbo tax asked him for that money. I have not seen he 2008 return yet. If he didn't send the Federal Witholding, does he owe a big penalty?

I was thinking from a different angle, but I agree with most of your points. Do you know how much money the IRS will collect in 2010, 2011 and 2012 just from those conversions?

I thought you could only deduct RE taxes on schedule A for the primary and secondary home.

Thank you.

I had a client from NY and I fired her this season because I didn't want to pay $100. Now, that you said that you have to prepare more than 10, I will call her. How long does the registration process take for NY?

As long as there is enough income on schedule C, I am able to enter 2 8829 forms. One gets labeled as home 01 and the other as home 02. I was also tempted to use 2 schedules C since you have two different addresses, but I know you should use one schedule C for same or similar activities. Since your client lost his first home, don't you think it will not make any difference if you don't claim Business Use of your Home since you will have to recarapterized it as ordinary income? Another point I want to make, he is now renting. Remember the exclusively and regularly rules, unless it is a daycare or you have inventory at home.

Send the return without claiming the credit and then you will have a lot of time to find the correct answer and amend.

Determine the amount that it is taxable and overwrite it.

I think the cap for SEP is 40% of income, NOT $15K.

I think you should be OK, because at some point one was accepted. Just call ATX to verify.

Thank you both for responding and helping me sort out this situation. A couple more questions and clarification: Judge ordered in November 2008. I guess there is no materially principle when it comes to the IRS. So, on joint return, Condo income should be reported for January and December. Feb-Nov should be reported on 1041. 1041 will report a loss, which will be transferred to the wife on the same year. This loss will be reported on Sch K1 and not on schedule E as originally filed. How do I depreciate the condo for January and December on joint 1040 using ATX? Do I need to get a FEIN for estate? Should I amend 2008 joint return? I agree that the mortgage company didn't know that the new owner was the wife after November 2008 and therefore 1098 was issued to the estate.

Do you think I should amend 2008 joint return and report condo rental income on 1041 from January 30th (when husband died) to December when judge validated will? With depreciation, there was a loss from the rental condo.

Husband died on January 30, 2008. Taxes were prepared jointly and rental income was reported on 1040. Client never mentioned that she was not on the condo's title, but in December 2008, client (wife) took the will to probate court and judge didn't object. The will stipulated that the condo was going to wife. Client talked to an attorney and told her that because the will stated that she was the owner of the condo, she didn't have to do anything else. The problem is that the mortgage company sent 1098 for 2009 with a title "to the estate of XXXX" I asked client why they didn't put her name on the 1098 and she said that the mortgage company could only make the change if she refinanced. I believe I will have to prepare a 1041 for 2008 and maybe for 2009. Do I need a FEIN for the decedent's estate?

The person is dead. The condo is part of his estate and reported on 1041. Based on what you said, whoever inherits it will use the step up basis but not the estate. Correct?

Rental condominium reported on 1041. Do I use step up basis for depreciation as soon as the person dies if the executor wants to use appraisal at the time of death?

She has a choice to amend 2009 or wait to claim it in her 2010 filing.

If TP doesn't find papers for 2006, you will not be able to receive a refund because by the time you get W2s from the IRS, the statue of limitations for 2006 will kick in (April 15, 2010). There is a $30 refundable telephone credit for that year. 2007 You are good but no special credits for that year. 2008 There is $600 refundable credit if TP qualifies. In this case, it has nothing to do with 2007 return or income. You claim the credit on line 70. 2009 As you know there is $400 refundable make work credit.

MOM can claim HOH and Father single or MFS with one dependent.

I agree that the matching is on Social Security Number and first 4 letters of LAST name.

This sounds good but make sure that he is not behind with his child support and/or alimony payments.

Prepare both the federal and state. Create the efile file for both. Make a change and save it. That will stamp both efile files as rejected. Then go back and create the efile file for the state only. Remember you will ALWAYS need the federal EFILE form even if you are only efiling the state.