Terry D EA

KC, I like the two by four explanation. Some of them take a bigger board. I have a single S-corp shareholder that recently was smacked with the two by four for not filing his TY 2006 individual tax return. You guessed it, hasn't called me yet and even better, I have completed the S-corp return each year after filing extensions cause he is never timely, now they want the individual returns as I am assuming they have the withholding records (worked for another company in 06), the K-1 and whatever else they have and probably are claiming he owes them. It will probably take the four by four on the forehead to get his attention.

The question is, was/is your client insolvent? I handled one of these a few years back. It would be in your client's best interest to obtain all of the bankruptcy documents from the court. That will show the discharge of this debt even though the box isn't checked on the 1099C. IF it is included in the documents, then file it as non-taxable based on the bankruptcy filing. Your client might get a notice and have to produce proof. My client got a notice plus a proposed adjustment to his tax liability of that year. We presented the court docs and it was resolved and to my surprise, it was done very timely by the IRS

I am a little confused here. Why is the rental condiminium reported on form 1041? Is this part of the deceased's estate? Your question seems to suggest the person hasn't died yet. The step up in basis would occur to the one who inherits this property at the time the inheritance takes place. Also, the basis at that time would be the FMV and an apprasial would definitely be in order as that should reflect the FMV and is used to validate the step-up in basis. Now for the other part, if the one who inherits the property continues it as rental, then the depreciation would begin again at the time of the inheritance with the FMV as the starting point for determining the depreciable basis.

I think you need to refer back to KC's response. Even though the land has increased in value, the balance sheet amounts don't change again until there is a disposition of the asset. The step-up in basis occurs at the time of the inheritance.

Yep, a Sub-S corp can be in a partnership along with an individual.

Agree totally, education expenses follow the exemption.

Yeah, I thought about that after I made the post and realized that I goofed. Under normal circumstances (whatever normal may be), claiming a credit in a year that the event that triggered the credit took place in another year wasn't possible. Thanks for keeping me straight on this.

Maybe I am missing something here but why wouldn't the credit just be taken on the client's 2010 tax return? We are filing for the 2009 tax year and the home wasn't purchased in 2009 but in 2010. Why would you amend something that hasn't occurred yet? Or better yet, how can you claim a credit for something in one year when the event that triggers the credit doesn't occur until the following year? :wacko:

Usually the last day to e-file is October 31 of the tax year in question.

I think I would do a correct W-2 with an explanation of the changes. This not only affects the gross income but all of the withholdings as well.

:bday:

I think filing the return electronically is fine. I would attach a copy of the POA to the 8879 for my records. Remember the 8879 is the digital signature form that via the PIN states the client has signed the return. Kinda a hard for the IRS to tell who actually signed the return. But again, be sure to keep a copy of the POA on file and advise your client to do the same.

Yep she will be 17 on Nov 2010. Easy mistake to make though but good that you are cautious

>>>a boiler-plate confidentiality agreement<<< Exactly what is this agreement? You can e-mail me a copy of it to [email protected]. Thanks so much for your input.

Just to add, wouldn't the partnership be required to have an accountable plan for reimbursements as well? If so, then I think the employee reimbursement method is all you have as Jainen has given you a good answer.

My computer that I use for all of my tax and accounting business decided to go out to lunch on me the other day. Yes, I have a couple different methods of backup. I took the computer to the local computer store and the guy was great! However, here are my concerns: 1. All of the data on the hard drive was recovered and placed on a computer in his shop. This was done to be able to clone a new hard drive if we needed one. 2. The exisiting hard drive was able to be repaired somehow and all of the data was intact. Don't ask how cause I am clueless to how. 3. Now that everthing is back to normal, the computer is working better than ever andthe computer guy told me he would keep my data for a short time to be sure all is well. Now that doesn't help when working forward for a month if it craps again. I did ask him about privacy issues and he stated the data was encryptyed (for his eyes only)and he would permanently delete it once we determined we do not need it. I think my computer guy is 100% honest and is a person of integrity, should I take any additional steps to protect my clients and if so, what are they? Would you go to the computer shop and tell the guy to delete the information and watch him to be sure it is done? Fortunately, I have never been in this situation before so I am not sure as to any extra steps for privacy that should be done. Thanks for your help during this busy time. :)

old Jack hit this one right on the head. Find out who was the Fiduciary for the Estate.

It will all depend on how the estate was settled. You need to find out if the rental property legally transfered to the Spouse or if the Spouse was the beneficiary or if the rental property was jointly owned. Also, was the joint return filed as the final return of the deceased? I think you need to get alot more information here. Depending on the state the spouse may not just take over and there very well may have been a requirement for an estate return.

The SOL if the tax payers owe money is (7) years and (3) years to collect a refund and I do beleive that Catherine is correct the SOL clock begins when the returns are filed. Good luck with this mess and charge accordingly with a little extra aggrevation fee.

No, I think you are referring to points paid that are rolled into the loan.

The only thing I can add is if there is a refund due the deceased, be sure to fill out form 1310 to claim the refund.

I am renewing as I write this reply. The software is by red gear or Tax Works. Other CPA's in my area are using it as well. This is an unbelieveable deal. It really doesn't take that much to get use to using imputs instead of working directly on the forms. I had the same concerns as others when it came to switching but I took the plunge and am glad I did.

WOW! that is ugly. I am glad NC is still in the dark ages.

Why not compare the three you have left, Tuition and Fees, Life Time Learning and the AOC and see which one returns the best result. Just a thought

In TRX, there is a bank account verification form which can be used for the same thing. Didn't think about having them sign or initial anything but that is an exceptional idea. Thanks