Terry D EA

If I'm understanding this correctly, your client who digs swimming pools paid an individual to deliver the dirt he dug to "his" (The pool digger) property? Sounds like this is a personal expense and not business related. Now if I missed it and during the normal course of pool digging, your client pays to have the dirt removed from the work site, and this is a normal expense that occurs during pool digging, then where it was delivered to is irrelevent and the private party provided a service who is a sub contractor, then he would put this income on line 7.

I hope posting this here is okay. I am not trying to push the TRX software and am just trying to give some information. I have used ATX/MAX for twelve years and toyed with the idea of changing in the past but I have been completely satisfied. I changed to TRX-PRO this year to save money. Usually, you get what you pay for. I knew there would be a learning curve but that curve has not been much. So far, no problems. I do have to admit the statements, reports,cover pages, etc are much better than ATX. I especially like the e-file transmission status report. This is a feature I have suggested to ATX for the last three years. TRX doesn't have a fixed asset manager either. That doesn't really bother me as I use a different fixed asset management program any way. Just thought some of you would like to know. Terry D.

Thanks KC for the reply. I have done exactly as you stated. I have inquired as to the nature of the grant and what it was for. Hopefully I will get that information tomorrow. If taxable then line 5 it is. Terry D.

Okay, found the answer for the fire and the 4684 is used and the loss or gain reported on form 4797. Still don't know what to do with the grant money. IMHO it is a separate account and not related to any normal operating activities. Terry D.

S-Corp client, recycler, reported in other income 9k grant from NC Dept of Environmental Services. This is a below the line item and is it reported on the 1120S? If so, where? There are expenses for items involving the grant. Same client had a loss due to a fire. All insurance deposits were entered in the other income account with expenses for the same were debited. Should the casulty thefts and loss form be filled out? If so, should the loss (if any) be reported with the line 19 items on the 1120S? Thanks for help with this. Terry D.

Eli, I like Old Jack's approach. However, there is another thing to consider. If he transfers the 1099 MISC to the Partnership, then you still have the problems of who gets what percentage when you complete the 1065. Pacun's reply is interesting but I would think the paper trail regarding the 1099 MISC is covered.

Thanks to all of you and I enjoyed reading each response. I do apologize that I did not get all of the correct information from the client. My client kept telling me that he loaned the company money but did not tell me where the money he loaned came from. Apparently, I over thought this whole situation. Member A took a home equity loan to start the company. The company is repaying the loan to the bank and not Member A. Member A basically did gift 50% to his son. As it turns out, neither invested any personal funds in the company and both are simply performing services for the company and all payments received are taxable, which as KC mentioned, may be offset by the loss that will pass thru this year. This company is a used car dealership. For the gift tax return comment. Under the new information, I don't see the need or possibility of a gift tax return requirement as nothing of any monetary value has been gifted. All assets have been purchased with company funds. Simply put, this is a two member LLC taxed as a partnership. Thanks! Terry D.

KC, Thanks for the reply. For Member A it is a loan and re-payment is expected. So, the repayments can be guaranteed payments and not taxable. Your reply on Member B is exactly what I thought. This is family but listed as an LLC with NC and not a family partnership. I am trying to find a good way to explain this to the client so it makes sense to them. Member A wants his son to be a 50% partner with him but he has made no investment. As we sure that the draws to this member would be subject to SE tax? Seems to me it would be which would make him the same as a W-2 employee. Does this help? Thanks, Terry D.

A two member LLC. Member A (50% member) loans the LLC 150,000.00. Member A takes monthly draws of 3K per month. This is not a guaranteed payment and the amount is flexible. Is member A taxed on the draws or is this a reduction in equity? Member B is (50% Member) and has not made a significant or any investment in the LLC per se. Draws taken by member B are taxed as a distribution of profit correct? I know the distribution of profits is not expensed on the LLC's books. Here is the question, the LLC is showing a loss and I assume the draws by member B are still taxable and not subject to employment tax and the loss that passes thru very well may offset any taxable income from the LLC. Am I correct here? I need to clear the mud from the water here. Any help is appreciated. Thanks, Terry D.

Thanks KC, this will be helpful information for me. I am one who paper files a few 1099 MISC because of clients who have employess with bogus SS numbers. Can't e-file them. Terry D.

Client is a used car dealer. When purchasing, receiving, or returning cars from an auction. Are the mileage or actual expenses deductible or are they added to the cost of the vehicle for sale. If so, would the mileage be added to the cost of the vehicle at the Federal rate? My thinking is actual expenses only. Car dealerships are new to me and any help is appreciated. Just to add, I don't know the entity structure at this time. Thanks, Terry D.

Can anyone lead me to some tax information for Bermuda? I have a couple that the husband has dual residency status with the US and Bermuda. Both want to live here and do currently own a home locally and a home in Bermuda as well. I need US tax requirements for income earned from renting the home in Bermuda. To complicate things a little further, the spouse owns the home in Bermuda and a small business as well. She would be a non US citizen and is applying for citizenship. I have told them this is not my area of expertise but they want me to try. Any help will be appreciated. Terry D.

I must say that regardless of what the letters say and or what we feel will or should happen is only an assumption at best. I had another client that received a CP2000 followed by an assessment with assurance from an IRS rep that the refund would indeed be snatched. You guessed it, the client got the full refund. I do agree with Jainen on both issues but the experience that I have with the IRS tells me to always CYA, notes of phone coversations, etc as the situation will get handled any number of ways. My step son's refund was adjusted by the IRS and they claimed the EIC was calculated incorrectly. It was not and I have come to believe the IRS has different programing in their calcualtors than mine have. No matter what, you can't trust them and always get an extension of time to prepare. Terry D.

The easiest way is to just override the cells and remove your information. Terry D.

Hey Eli, good to hear from you. All went well this year and I am glad it is over. There is still plently to do though. As I see it, if TRX is selling the same ATX Max product minus the books, at a substantial savings, then why not? Support is an issue for some but I only called them once this year with a minor problem that was irritating but did not affect program operation. I have only contacted them a few times within the last 4 years. So, same product at seriouly lower prices, I'll probably change. I'll call you when I get a call from them. Have a great day! Terry D.

I have read most of the posts regarding TRX. I would like to know more about this but no one has called me. I have used ATX for 10 years now and certainly don't mind saving some money. Actually, I wish I would have known about this sooner. TRX call me (919) 304-6981 Terry D.

Thanks Margaret. I did get through the returns just fine. I guess the manipulation of the information to get it onto the forms wasn't too bad. Although, I would like to see some changes. Terry D.

Just off the cuff, but it would appear your client would have a tax due once the sale is reported. With that said, the IRS can collect a tax liability back to seven years prior to the return filing date. I think the main question here is would the IRS accept the installment sale. You are right that this would be alot of work when you are uncertain of the outcome. For what ever it is worth, a phone call to the IRS to try to speak with someone who would be able to give you a good answer might be in order. Problem is, finding that person. Maybe Ibbwest or Jainen will chime in as they maybe able to give you the best insight. Terry D.

I like the idea of adding a column and did experiment with this and will use it if all else fails. The only problem I see is it still requires a manual entry from me that could get overlooked. A link between the e-file manager and return manager would still be preferred. I am glad to see that I am not the only one who overlooks things. The older I get the more it happens. :-) Terry D.

I have been using ATX since 1998. While the program has made major changes over the years, there is one area that I would like to see an impovement or or a feature added. Each year we check the return manager against the e-file manager weekly to ensure the returns have all been transmitted or mailed. Most of my mailings are either corp, payroll forms; etc and not usually individual returns. We always find one or two returns that slipped by without being e-filed. While this has not become a major issue with my clients, it is an issue with me. I am a one man show any my wife handles the receiptionist and some administrative duties. We are not networked, but that maybe an idea for her to check behind me. I would like to see a feature that would flag a return if it has not been either e-filed or mailed that would get your attention. Even if you could run a report that would be helpful. I know you can run the e-file report but to my knowledge there is nothing within the program to alert you that the return has not been filed. We did have a return this year where the client's bank information disappeared om the 1040Efile form. I distinctly remember entering the information, shredding the paper the numbers were written on and creating the e-file. This return never got transmitted and when we re-opened the return to re-create the efile, the information vanished. If any of you have any other sytems of checks and balances that helps with this, please post them here as I would like to see the procedures others use. Have a restful off season Terry D.

The only value in filing an extension with out a payment would be the elimination of the failure to file penalty. The interest still continues and the tax is due on the 15th. Terry D.

Welcome back! Terry D.

John, Have a wonderful dinner and some quality time with your wife. I am DONE!!!, no extensions (yet), and am off to do the same. Take care! Terry D.

Boy isn't that the truth. Today, the radio is full of last minute advice not only from tax pros but from the radio DJ's as well. I like the turbo tax and IRS free prep & e-file. You have exactly 12 hours to file your return "FREE" and cause yourself 2 to 3 years of hell if you make a mistake. But then, there is JK Harris to get em out of the hole. Either way, YOU'RE broke if you mess up. Seen this happen too many times this year. Client came back after screwing up thier return three years ago. They said, "we thought we could handle this" with a pile of letters, "but we would like you to handle this from now on if you don't mind". I again apply the song from Joel Glib's post. 'I'm Billing Time" Terry D.

Margaret, I finished my CRUT return early this morning with some frustrating difficulties from ATX. This CRUT only required the 5227 form. With that said, form 5227 apparently is not a major return form that global information flows to. As you said, if you delete the 1041 all information about the trust name, EIN, etc disappears and does not get put on the K-1 either. Tax preparer information will not flow nor can you add a client letter w/o the 1041. I corrected this simply by unprotecting the forms, typed in the information and created a client letter from MS Word. I don't know if it will do any good but I am going to report this to ATX to see if these problems can get worked out for next year. Just thought you would like to know. Terry D.