Terry D EA

The attached copy had a couple of typos in it that I have corrected. I will remove all information regarding this repair so it will be a blank document and have attached it to this reply. Blank Computer Repair Nondisclosure Agreement.docx

Yesterday, and right in the client's face, the computer I was using tossed up a warning the hard disk was about fail. What better time for this to happen just two days before the filing season starts. Anyway, took the computer to the computer repair store to have a new drive installed and cloned from the one that is about to fail. I found and modified a Computer Repair Nondisclosure Agreement that I gave to the computer store. At first they were a little apprehensive, but I told them they had to sign it or I would be forced to go elsewhere. Whoever did this originally must have had it put together buy a lawyer. If folks here would like to have a copy, I'll make one. I have attached the one I used yesterday. Nothing private on it at all. Computer Repair Nondisclosure Agreement.docx

Thanks and I am trying to get this information from the client(s). This is a partnership where both are involved and I am not sure which one keeps track of the paperwork. I have asked for the closing documents and such that you have mentioned. Up this minute, I have not received anything other than the bank is working on it. I have enough to do already and putting this on the back burner this early is something I don't want to have to do.

Roberts would you be willing to share this spreadsheet? I do use excel quite a bit but do not have the experience to create this. Sounds like a better way to solve my problem.

All I can add is I am using Drake on Windows 10Pro. New computer, good processor, 8G memory and everything is working better than ever. But, I am keeping older returns on a Win 7 machine.

Exactly, this is one of those situations where the client did not contact me nor ask me anything about this. I learned of this when reviewing the books and allocating expenses to each property. I am now waiting for the information to attempt to allocate the interest to each property for tax purposes only. I will also inform the client there will be additional charges for having to create mortgage amortization schedules for (7) properties.

This is exactly what I have been concerned about. Allocating to the properties based on the previous loan values may be the only option that I have. Loan balance will not come into play when determining gain or loss on the sale of one of the properties but... under the consolidation, I am wondering how the bank will determine what is still owed on one of the properties that are part of the group lumped together. Hmmmm.

Rental client is a partnership with 13 rental properties. During 2016, their bank consolidated several properties into one loan and the insurance company lumped all of the properties into one policy. I can see dividing the insurance bill and allocating the amount to each property. Would there be any problem with doing the same with the mortgage interest but only dividing equally between the properties that were consolidated?

It sounds to me like our client needs to be informed of the need to timely respond to any IRS notice. You should advise her that the IRS can take the position they have taken due to non-response. Not sure about any tactics by the IRS, but she definitely needs to provide the IRS with the documents they are asking for like yesterday. I would be willing to bet that each of those letters has a respond by date. Not your problem if the client doesn't do their part. You didn't say whether you prepared the original return or not. I would be ready to supply the due diligence should the IRS ask for it. If you didn't prepare the return then no worries.

As I think this thru, the structure that is setup is the best way to setup a real estate agent. Your client works for the LLC (hence the reasonable wage) and all commissions are paid to the LLC as you say. Because of the S-Corp treatment, all of the commissions are not subject to the SE tax regardless of whether she earned all of them or not. Again, she is working for the LLC and the LLC is a real estate business. This is one of the benefits of the S-Corp structure. Yes, the total earnings of the S-Corp pass thru to her and not subject SE tax. However, she does not have to take all of the income/earnings at one time thus negating the total amount as subject to the SE tax. The S-Corp should have an AAA and an A&E account setup so the shareholder can take a distribution at a later time tax free which is also known as a distribution of basis. The tax was paid on the S-Corp earnings when it passed through. Again, the only amounts subject to the SE tax are the wages. >>>>>Since she is the one that is making the commission, the LLC is really not providing a service<<<<< The LLC does not provide a service but is a business which the shareholder is the employee (who should be to avoid problems with the IRS) who is providing the service. As far as determining a reasonable wage, the article below will shed some light on this. It is a conundrum at best trying to determine a reasonable wage and explain it to your client how you arrived at it as well. http://www.thetaxadviser.com/issues/2011/aug/nitti-aug2011.html I hope I haven't added too much confusion to this.

My response will probably be no help at all. However, I do remember being able to create a set of default forms. If my memory serves correctly, you could choose common forms to open. Like you, I can't remember how to do so. For you, I hope that feature is still there. This may have been back as far as Sabre.

I received an add for this because I am using Drake. However, nothing was mentioned about security so I refused to look into it any further. Fees were kind of expensive as well.

Other than being alert and diligent, what else can be done to protect yourself?? I am just curious as I have not received any of these e-mails yet. I have had client's compromised so I guess you just never know. One practice I have is to never open e-mail attachments. My clients do not and I repeat do not send me any of their information via e-mail. Took everyone's suggestion and purchased a PO box for that.

What kind or type of trust are you speaking of? Don't know if I can help or not but that is a starting point.

I would suggest you check with the CPE provider to see if they have posted the hours. I did mine through APlus CPE and it did show posted on the IRS site the last week of December. Don't know if this helps but just a suggestion.

Catherine, I totally agree with you. I only have one of these and we talked at great lengths. I initially told them I could not serve both of them. They agreed that I could and they would not cause any trouble. So far so good. If a situation arises, I can still bail out before preparing either return. To address the OP, I think I may have investigated a written agreement for these situations but will still entertain another if someone has one. Thanks for the word of caution.

I take the easiest position, choose one and not both. With that said, I have had divorced clients return to me after the divorce is settled and married filing separate is not an issue. However, I still approach this cautiously. Do what every you can at all times to CYA!!!

Thanks for the clarification but I still agree that if you take the actual expenses and subtract the reimbursement from them, the excess should be taxable. I guess I should dig a bit deeper. I also agree with your statement if you don't claim actual expenses and just take the reimbursement then any excess is a reimbursement.

It is mind boggling to see the number of clients who don't recognize or care about the amount of interest they are paying on these products. The article in the original post makes reference to two "loans". I picked up a new client last year that was part of the HRB debacle of get part of your refund Dec 15th so on and son, and said when it was all said and done, the total cost was close to $500.00. I can't afford to throw away $500.00 and I know I sure could do a lot with it.

My client is a W-2 employee. I planned on doing as "Ringers" stated but just wanted some confirmation my thinking was on target. Rita, I am with you totally. This client does not qualify for EITC either. This client claims his sister has an LLC and depreciates a vehicle she uses for business so he is thinking he should do the same. His argument is the vehicle depreciated due to the mileage put on ii which he is correct to the extent a vehicle naturally depreciates regardless of how you put the mileage on from either personal or business. Just have to have the right words to make all of this make sense to my client.

A retired client is a driver's Ed instructor that certifies bus drivers along with other driver license and training activities. He is not provided a vehicle and uses his own vehicle to go to numerous places during a typical work week. He is paid a salary and receives a mileage reimbursement. He wants to depreciate the truck. The truck was purchased primarily for this activity and is used 100% for the driver ed activities. If he does so, am I correct in stating the mileage reimbursement becomes taxable income?? I am of the opinion that he has to claim actual expenses to do so as well. Suggestions or insights please.

Sara I agree totally. But, some folks don't want to have to pay to have the gift return prepared and filed. I have suggest different scenarios to this client and have reinforced the fact that we are talking about 40K and no tax paid by anyone. But did warn if he takes it all in one year, then a gift tax return is required.

This is my first year using Drake also. I made the mistake of using OneDesk/OLTPro and Drake cannot convert the files. I don't fault Drake for this as these programs apparently are not quality programs. So, I do a lot of rental properties, LLC's and a few S-Corps that all have assets and am entering all of last years returns for these clients to roll them forward for 2016 when the States are released. This is really giving me a lot of practice prior to tax season. So far, I really like the program. Like Catherine stated, I have entered my prices and other setup in 2015 with an increase percentage for 2016.

I guess the aggravation, sometimes incorrect assessment of penalties and other frustration is not important even when the TP is doing the right think or trying to correct an honest mistake. Totally inexcusable on the part of the IRS to not address any filed form.

>>>>>>exclusive right to use the money as necessary<<<<<<<< I should not have said exclusive right. My client can use the money and so can the original owner. My client wants to purchase land with a portion of this money. So, to avoid a gift tax return, he could withdraw 14K this year and put it wherever and do the same next year and then purchase the property. I can see a couple of different ways he can do this as the original owner of the property he wants to purchase has defaulted on the taxes. He is waiting for it to go into foreclosure and then attempt to make the purchase.