Pacun

I think I am right because MargaretMort said she was a "young woman who is Russian and was in the US on a work visa". Margaret please provide more info.

I am not sure but a template, which is already, included in the ATX program will solved your problem. I am not sure how the template will work with rollover clients, but it will work with new clients. So you create the template with all the common forms you need, and when a new client comes in, you open the template and all the forms will pop up.

If the Russian worked for the International Monetary Fund or similar organization which does not have a FEIN and is not required to get one, file schedule C and SE with full amount shown on W-2 and 0 deductions. Any deduction should done on 2106 and schedule A. Based on your situation, only statutory workers can deduct expenses on sch C.

Keep in mind that as long as someone paid or is reponsible for any loans (no scholarships or grants), whoever claims the student's exemption is the one that gets the credit. Just having the 1098-T is not enough proof according to the IRS.

If the registration is under both names, whoever paid for the taxes should take the extra deduction.

If they have proof of payment and otherwise qualify, yes.

It seems that the IRS doesn't care what happened to the previous house, so I think he could qualify. Anyways, when the bank reposes a house it is considered a sale in the eyes of the IRS. I think the 1099-C reporting the cancelation of debt will be issued for tax year 2010.

It depends on the bank. Some banks accept the deposit and then they send the money back to the IRS. If this happens, you will get your refund after you verify with the IRS that the bank got your money, then you have to go to the bank and ask them to return it to the IRS. It could take an extra month or two. This happened to my brother last year. If the bank rejects the deposit when the IRS tries to deposit it, a paper check will be issued and mailed by the IRS the following Friday. This happens when users give you the wrong account number or the account is closed (it depends on the bank).

Yes, after the sale, the LLC was liquidated. What I feel is that the person with no money invested, no work performed for the LLC will get a loss. This person never had any investment at risk neither was liable for any debts of the LLC since the LLC did't owed anyone. This is the situation, LLC was created by the 3 members, everybody agreed 3 ways for losses and profits. When there was time to buy the first property, only 2 members had money to puchase the property. To even up, the other member was going to invest heavier on the next property that the LLC was going to purchase but since the real estate market came down, there was no second purchase. The rental property had 15K loss for the last 2 years, each member got 5K loss. The previous preparer claimed losses for the two members with basis on the ONE property, and carried the loss (didn't claim any loss whatsoever in 2007 and 2008) for the basisless member, hoping that the property was going to generate a profit when sold. To me, he would still qualified to take 3K passive losses since he had other passive income. When the property was sold in November 2009, there was a 12K loss and each member got 4K loss. Am I correct to assume that the basisless partner should use 3K passive losses for 2007, 2008, 2009, 2010 and 2K loss in 2011? AND the same is true for the other two members? As always, when I am going to amend a return prepared by another person, I always want opinions from this forum.

I don't have an answer but this is an excellent question. Since your client just closed the deal, ask him/her to go back to the realtor to have a copy of the HUD-1 that everybody signed. It wouldn't hurt to have it anyways.

Thank you KC. This is exactly what I needed. So, in order for Mark to qualify for EIC, the father had to make less than $15,800 and not claim Thomas. EVEN THOUGH HE PROVIDED 0 for Tomas' support. Of course, if they were born in Oct 1991 NOT 1990 as originally posted.

Common law marriage is accepted in DC. If you want a divorce, the first thing they ask you is your marriage certicate, though. In your case, let's say that the wife becomes disabled and the husband dies, do you think the Social Security Administration will give the wife any benefits because her common-law husband died? As you said before, she didn't work, so she would not qualify for SS benefits on her own. I used to work for a lawyer and she said that for a common law marriage to be valid, they have to bring it in front of a judge and the judge will determine if you are common-law married. She said: Let's say, for example, that a disabled person lived with someone for a long time as husband and wife. Then the abled person dies and there is an inheritance to be shared with other beneficiaries. The disabled wife would have to go in front of a judge to validate their marriage. She went on to say, of course the judge most likely will certify the marriage since no one wants to leave a disabled person with nothing. In the case of two people with equal opportunities, the judge might not even hear the case. I had a case today where the boyfriend supports 100% his girlfriend (who didn't have any income) and she lived with him the whole 2009, I told him to claim her as a dependent. Why will I suggest MFJ? (I know... because the tax rate will be lower and the standard deduction will be doubled). Let's say that the wife says, since I didn't work, I do not want to file any taxes, nor do I want to be responsible for his taxes. What will you do, file him as MFS?

This reminds me that I have to make a donation to this forum so that the electrical bill can be paid. I really appreciate this forum. I think Jainen and a couple of others should be exempted from donating since they give excellent answers, but if they insist, their donation will be welcomed. Disclaimer: I am not part the of the team that run this forum, but I appreciate their effort in maintaining a place for us to hang and help each other.

Three LLC member-managers own collectively one residential rental property (and this constitutes the entire ownership interest of the LLC) that has for the last two years produced passive activity losses. Only two of the members have reported these losses, the third awaiting hoped-for capital gain on the sale of the property (since he has no other passive activity income with which to match this). The sale of the property then generates a loss. May the non-basis member declare any losses, including those of the last two years? If no, how do the two basis-holding members report the losses now permanently disallowed by the third, if any?

Very good question and maybe I am doing it wrong too. Since the bank didn't know the taxable amount when they issued the 1099-R, they didn't entered anything in box 2. Since I know that the whole thing is taxable, I enter it and no problem. Of course we all know that TP has to pay taxes and penalty if not over 59.5. So, I don't see any problems with my system.

For previous years, I charge 33% more than what I charge regularly.

I am not sure if $1,000 is actual amount paid or the amount paid in 2009 towards the loan. When you get a loan, you can deduct the full amount of the loan for classes in the year in question and the next 5 months of the following year. I believe I am correct.

You are right I messed up the dates. I thought Thomas was 18. I meant to say that Mark and Thomas were born in October 1991. I was on the telephone conference with the IRS and they said that the related taxpayer should make more money than ANY of the parents. Maybe more than both parents if parents are married. Now, mother is a citizen of mexico and crossed the border in 2008 and mother will apply for ITIN. Will that satisfy your head of house requirement? Will that change if she stayed in a nursing home in Mexico?

Jainen said: "An elderly parent in a nursing home in Florida with no Social Security or Medicaid is a common scenario for an illegal alien" Gues what, even is she entered the US crossing the border by foot in December 2008 and went to the nursing home at the end of december, the son can apply for an ITIN and claim her. But let's assume for the sake of the exercise that all persons involved here are U.S Citizens. "Let's see, Mark the son is 20 yet you believe his mother is "elderly"? That would make me at 65 super elderly! taxbilly" Why we are deviating from the original question. I don't see anywhere in the tax code to say that a mother cannot have a child if she is 80 years old or even 100. "His sister is 20 years older than him. Sounds like the taxpayer was an "oops". ;o) Having children 20 years apart will make you "elderly" in a hurry. Tom Lodi, CA" Again, why we are not addressing the questions? This is not a real situation, but Mark qualifies as head of household because he supported his mother 100% and she is in the US... AND he qualifies for EIC because he had a qualifying child living with him in 2009. He cannot claim the exemption for Thomas but he will be treated as his qualifying child because: Mark is 2 days older than Thomas (TP must be older than qualifying child) Mark had more income than one of the parents (Mother made only 0 and Mark made $14,000 plus $1,800. Thomas is not his dependent because Mark provided 0 for his support but Thomas is his qualifying child because he lived with him all year, Mark is older than Thomas and Thomas is a decendent of his sister. Based on what I have said, can we constructely discuss this situation? Thank you.

Tax payer had $200K savings at the beginning of 2009 and at the end of 2009, he had only $20K (this if for Jainen, mainly). No loans or gifts were involved in 2009 for any of the people mentioned here. No other source of income, only the W-2s mentioned. All the people I am going to mention here are single and lived in the same place the whole year. Tax payer (Mark) lived all 2009 with his sister (Rose), her boyfriend (Rob) and their son (Thomas). Tax payer (Mark) was born Oct 23, 1990 Sister (Rose) was born Jan 5, 1970. Boyfriend of sister (Rob) was born March 15, 1970 Rose's and Rob's son (Thomas) was born October 25, 1990. Rob supported 100% his girlfriend (Rose) and he also supported their child and his income from his only job was $150,000.00 (one hundred fifty thousand) Mark supported his mother 100% in 2009. She was in a nursing home in FL the whole year and Mark paid everything for the nursing home... everything. Mother had 0 savings at the beginning of the year and 0 savings at the end of the year. Again no gifts, loans, inheritance or found a bag full of money. Mother didn't have any social security or retirement income. Mark's W-2 shows that he made $14K and his money made $1,800.00 in interest. No other income. Rose and Thomas didn't work and didn't have any income, gifts, loans, or inheritances. Can Mark file as head of household and get earn income credit? Is he entitled to EIC under IRS laws? Can he enforce the law if the other members of the house where he lives don't want to cooperate?

The credit is $400 for each tax payer who is not a dependent. Forget about the W-2 and what happened at work with the withholding table.

I always appreciate Jainen comments. As I said before, I read every reply from him.

KEN, Based on what you said, I made an assumption AND based on what you said, Jainen made an assumption too. Please tell us who assumed the correct scenario. I assumed that if any of the adults were married, you would had mentioned it since you are not just a tax payer but a tax preparer. Am I correct in my assumption?

I assume you want to file his federal taxes. The answer is: if child is his son/daughter, he will file as Head of House and will claim child as his son or daughter and mother as dependent using other as the relationship.

At least you are not affraid to ask and I appreciate that because that gives us a chance to relearn and to remember every detail when we are talking to our customers. I bet you that there are many preparers reading this post with low level questions but they don't ask because they don't want to expose their level of knowledge. This is what I tell them... the most experienced person on this forum was at your the level at some point in the pass and they learned a lot because they asked questions.