Pacun

Pull down the menu and select personal and the loss will become personal and it will not be transferred and carried over.

Yes, you need to file gift tax return for and report the gain on schedule D (but I think you basis will be brought up if you file 709). Your client will not pay taxes because of the credit. Why do you want to postpone the filing of gift tax return if you have a huge long term gain on the dispossal of real state?

Hold down both keys then press the down arrow key.

All of you, go to your partners computer and press and hold down Alternate and control then press the down arrow key. Become a hero by fixing it when you press and hold down Alternate and control then press the up arrow key. I guess some one has been playing that joke on Deb since it is not the first time that happened.

press and hold down Alternate and control then press the up arrow key.

Thank you for your reply. Someone said on this board that if you rent part of your house, rental losses are not allowed on line 17.

Taxbilly is correct and I would like to add that next year, you have to manually enter the amounts for the extra refunds since ATX will only pick up the previous year. Also you need to make calculations if itemized deductions are barely higher than federal standard deduction for the delayed year.

Client owns a house and rents out the basement. Rent income is less than expenses and depreciation and it becomes a loss. Client also has a K-1 from a partnership where she woks. Prior preparer (CPA) did not file sch SE because rent losses were $4,000 and K-1 showed $4,200 on guaranteed payments for worked done as partnership member. Should I amend? This year guaranteed payments are $5,000 and rent losses are $6,000, I understand that I should not report $1,000 in losses because he lives in the house. Do I override 1040 to avoid the losses being transferred or is there a check mark that I can do on Sch E or somewhere? This is not a Real Estate partnership as stated by mistake on the title.

I am not replying directly but I would like to share this with you since it is related. I do a lot of returns for VA, DC, and MD. In April 2005, my friend who lived and worked in VA came to have his 2004 taxes prepared. He said he was moving in a week and he didn't want to have his refund mailed to his address, so he asked me to use his friend's address in MD. Last summer he got a letter from MD stating that he owed more than 2K in taxes for 2004. On the MD tax bill it was stated that he filed Federal taxes using a MD address and he didn't file MD taxes. Since MD and VA have reciprocal agreements, we only sent a VA certified return to MD and they were happy. Sometimes, you file MFJ on Federal and MFS on the states based on where each spouse resided during the tax year.

Client owns a house and rents out the basement. Rent income is less than expenses and depreciation and it becomes a loss. Client also has a K-1 from a partnership where she woks. Prior preparer (CPA) did not file sch SE because rent losses were $4,000 and K-1 showed $4,200 on guaranteed payments for worked done as partnership member. Should I amend? This year guaranteed payments are $5,000 and rent losses are $6,000, I understand that I should not report $1,000 in losses because he lives in the house. Do I override 1040 to avoid the losses being transferred or is there a check mark that I can do on Sch E or somewhere? This is not a Real Estate partnership as stated by mistake on the title.

Cathy, I saw your answer. If someone makes only 5K, would that make more sense to do a Roth IRA? Going back to the original question... 20% doesn't seem to be the percentage, I think it is something like 44% up to a maximum of $220K income.

You need to find the basis for the house, report any losses (long or short term) on Sch D and debt cancellation on line 21.

If the entry is on box 2, you do not need to send W-2-G to IRS.

ANOTHER (sometimes ignored) catch is that you are considered "covered by a retirement plan at work". So be careful if your client makes a bunch of money. That's also true for you Cathy.

Can you check the paper copies and see if in fact you reported it? If the IRS claims you didn't, then a 1040X will solve your problem and since it will match what the IRS is saying, no extra tax will be owed.

Let's be honest. Big chain preparers at the front line are people that just "graduated". In July 2007, they had no idea about taxes, they took a course and passed, then they get hire in January. Perception is very important and that's why they are in business.

Well, those $20K are actually deductible because he is getting a loan for that. Maybe other transactions like that are deductible. Let's say I have a house and I need to pay $20K on mortgage interest and I go and get cash advances from my credit cards, I still deduct the mortgage interest. I think it is the same.

Nice conclusion but I still didn't understand. Cientax... It is my understanding that as long as both TPs have valid social security, file 1040, etc., they will get the stimulus refund and they also will get $300 per head on the dependents that qualify. In this case, it is my understanding that TPs will get $600-$1200 for themselves and they will get $900 for the 3 children if they were under 17 on DECEMBER 31, 2007. Am I correct?

Good point.... BUT why do you want to deviate from reality??? The truth is that she doesn't pay rent. I would go with intent and reality (both are the same since parents did not intent to collect rent from daughter).

Depreciate 75% of the structure, 0 for the land and take 3/4 of utilities, taxes, mortgage interest, insurance, etc. The other 25% will be considered personal use of the owners, which might fit on schedule A (taxes and mortgage interest).

It must be new.

Thank you Linda. I am reviewing the information and hope some one else replies to my question.

I have a W-2 from the Postal office with entries on box 32. TP is a rural mail man and purchased a jeep and moved the direction wheel to the right. TP is getting his last pay check stub and I will check if what he got reimbursed for miles, is added back to box 1. In any event, can any one tell me how the postal office does its calculation? Can I depreciate his jeep? Any information about this will be appreciated.

Good suggestions. Also, other employees might not be affected by this if they made less than $87K from this employer or made more than $89K from all employers including any Sch SE in 2006. Of course medicare doesn't have a ceiling.

You should mention how much he made so we can suggest you the best course of action. If he made $6K, there is no need to even mention the ITIN on the thread. If he made $20K, maybe. If he made $30 and paid more than $15K on mortgage interest, there is no need to mention the mother. As you can see, I am assuming a lot of things here, since the question came from a TAX PROFESSIONAL, it also bothers me the fact that you do not put all related matters on the table. You file as HH (based on the information you have tea-spooned out from the barrel). He is living with his child and he is providing more than 50% of his/her support. Again, if he made less than $10, it does not matter if he files HH or single with one dependent. Also, if he made $20K and paid $12K on mortgage interest and $2K on real estate taxes, it doesn't matter if he files HH or single with one dependent.