Pacun

No. You can amend any years but if they owe you a refund you cannot claim it if 3 years have passed. Do you think the IRS will reject the return if you amend your 2001 return and owe 6K?

You cannot amend a MFS to MFJ after the deadline. Is that correct or it is the other way around? If this person didn't file in time, MFS should be the best anyways. Remember that if they lived together at any point during the tax year and if the spouse itemized, he can use the standard decduction, nothing wrong with that, except that his/her standard decduction will be 0 (zero or nada).

Can we answer the core question, please? Does taxpayer qualify for the $6,500 credit or not?

You do not need to amend. You need to file 1040 as you normally do but you need to send it to a special address.

For sure, if they had moved to rent and NOT buying house number 2, they would have qualified for the credit. Also if they had converted house 1 to rental they would qualify for the credit. But I agree with those who say they qualify for the credit because there is no information to the contrary. My only concern is with the fact that within the last 3 years they have disposed of 2 houses and also bought two houses. This is a new credit and there is no background information. Also, the IRS is not clear on this type of situation and there are no examples on their website.

Let me put this on the table to see if there is another legal way out. Let's say that FMV of rent for this taxpayer was $1,400 per month, for which she only paid $400. The $12,000 was a yearly gift to her from her father. That's a because she didn't pay FMV for rent. Mother gifted her $5,000 in cash or food during the whole year (As a matter of fact, they don't even have to break the gifts between parents). All of this money is gifted to her and not taxable. With those gifts, she will not be living below the poverty level in Seatle. Maybe parents need to start documenting the gifts to her.

If you prepare the taxes for the individual and not for the non-profit, you should advise your client to really think about what he is about to do. After careful consideration, he should say NO to non profit organization. If he goes against your advice, option 2 will be the best because it will be cleaner on his end. You are wrong on option 1, he will report interest received from non-profit as interest NOT as ordinary income since he is not in the business of lending money.

They don't qualify because they have not lived in the same house for 5 years during the last 8 years.

I usually give advice after people have worked and come with papers to have their taxes prepared. If this sportman came to me with a 1099Misc form showing $6,000 nonemployee compensation, I would request an ITIN and file his taxes (at the same time) using schedule C and deducting his business expenses.

Maybe her tax liability for 2007 was = StimulusRefund-60.

If you prefer, you can think of the ITIN, as IRS Temporary Identification number. It is temporary until you get the real social security number. Qualifying for a real social security number has nothing to do with the ITIN, but rather with the immigration status.

She will use the social security number ever after. She needs to let the social security office that she filed her taxes with the ITIN so that the money contributed is transferred to her social security number

I just had an idea that might help you with the 401k dilemma, which you may want to discuss with your employer AND a tax advisor. You may want to find out if it would be possible for your employer to have you as a W-4 employee, instead of a W-2 employee. If that's possible, you should ask your tax advisor if this change would qualify you to make deductible IRA contributions and/or open your own SEP-IRA or owner-only 401k.

Nothing to back up my answer, but the answer is NO. He cannot claim his dependency.

Let's see if I get the reaction that I want... If you parent lives in the US, Canada or Mexico and you support him/her more than 50%, you can claim him/her as a dependent and you can file as head of household.

We are glad to have you too! Have a sit and relax.... we will be with you shortly (maybe after April 15).

I always tell my client... The IRS will catch it FOR SURE but the auditor will read your return, then he will decide if he needs to send you a letter. If the auditor feels that he will spend more on postage and handling, he will not send you anything. You do not tell your client, "maybe the IRS will not catch it". If you do that, the next time your client will leave out a 1099misc expecting that the IRS will not catch it. Last time, a TP came to my office with his previous 3 year returns and a letter from IRS. The IRS was questioning the Itemized deductions. On the return they made $53 and the itemized deductions were $35 in mortgage interest, RE taxes and 2106s. I checked all years I was surprised that every year they made about $100K. I asked them why they made so little that year and they said "we always make about the same amount of income". I checked W-2s carefully and a W-2 for $45K was left out. The IRS was asking for a $3K payment and I told this new client, if I amend, I will include the other income and I will not use any 2106s. The client agred and we added the additional W-2. I was surprised that the auditor didn't match their W-2s. At the end they owed 6K. Another one, a client told me that he left out $142.60 from dividends. I said... I will charge you $100 to amend or you wait for the IRS to send you a letter next year and you will owe them about $55. He said, I am going to wait. Next year the IRS send him a letter demanding more than $3K because he left out $14260 (fourteen hundred two hundred sixty). So, I guess you should amend.

Any Notary Public.

File jointly and problem solved.

If they realize they are wrong, they will correct their mistake with another letter. If the boss is wrong, he commands again, we say in Spanish. They will want part of the refund back and they will try to get interest.

Ask your client to give them his/her correct address.

If both were sold together and to the same person, you only add the cost of land to the basis and you handle the sale of the house only. You only make a distinction for depreciation.

Yes, everything goes to Austin: W-7, 1040, notarized copy of passport or original passport, and payment. Use husband's social security on payment. One month later you get the passport, a week after that, the number, and 3 weeks after that, the return is proccess and refund issued if any. After you get the number, you send the state return. When both are applying for ITIN or a single person, I do not ask my people to send payment with the return. I ask them to send payment when the number is assigned. Why? Because when they receive the payment, they assign a temp number to the payment and later they assign a different ITIN to the person and then they proccess the return without any payment. It takes a couple of letters to match the payment made with the temp number and the return with the other permanent ITIN.

The exception for the penalty is to purchase your first home. In this case, they have to pay the penalty.

File MFJ missing her SS# and attach W-7 invoking the 183 day rule and send it to Austin, TX with her passport.