Jack from Ohio

Treat it as a sale of the property. Use the amount of the outstanding loan as the purchase price. Recapture depreciation as normal. He may have capital gains, especially if he took cash out when he financed or refinanced the property. Remember, this is NOT a cancellation of debt. This is an exchange of property. If/when he receives a 1099-C, then you will have debt cancellation to contend with.

The EA exam is NOT open book. I have two of three passed and failed corporate twice. Took my tests first in Feb 2011 and second try for business in Jan this year.

If child 1 is 24 years old, he is on his own, and the parents cannot claim him as a qualifying child, therefore education credits are not available to the parents.

Terry O, You are correct.

Please define that term. It is a completely foreign term to me??

con·temp·tu·ous kuhn-temp-choo-uhs adjective showing or expressing contempt or disdain; scornful. Wouldn't this describe almost any personal interaction with an auditor or an untrained phone assistance person from the IRS? I'm just sayin.....

Create a new return that duplicates his original return in every detail. In ATX, with the return you just created open, click on return, then choose amend return. A new return will be created and it will be tagged (AMENDED). Add the 1040 which will remove the 1040EZ and put the numbers in the correct place on the 1040. Add Schedule D and make all other changes. 1040X will be ready and show the increased refund.

Just found this again, and thought it might bring a laugh and help the day go better.... HOW TO ANNOY THE IRS (WITHOUT GETTING IN TROUBLE) 1. Always put staples in the right hand corner. Go ahead and put them down the whole right side. The extractors who remove the mail from the envelopes have to take out any staples on the right side. 2. Never arrange paperwork in the right order, or even facing the right way. Put a few upside down and backwards. That way they have to remove all your staples, rearrange your paperwork and re-staple it (on the left side). 3. Line the bottom of your envelope with Elmer's glue and let it dry before you put in your forms, so that the automated opener doesn't open it and the extractor has to open it by hand. 4. If you're very unfortunate and have to pay taxes, send a two or three party check. On top of paying with a third party check, pay one of the dollars you owe in cash. When an extractor receives cash, no matter how small an amount, he has to take it to a special desk and fill out a few nasty forms. 5. Write a little letter of appreciation. Any letter received has to be read and stamped regardless of what it is or what's it's on. 6. Write your letter on something misshapen and unconventional. Like on the back of a grocery store bag. 7. When you mail it, mail it in a big envelope (even if it's just a single EZ form). Big envelopes have to be torn and sorted differently than regular business size ones. An added bonus to the big envelope is that they take priority over other mail, so the workers can hurry up and deal with your mess. 8. If you send two checks, they have to staple your unsightly envelope to your half destroyed form. (MARILYN DOESN'T GET THIS ONE -- PLEASE EXPLAIN) 9. Always put extra paper clips on your forms. Any foreign fasteners or the like have to be removed and put away. 10. Sign your name in ink on every page. Any signature has to be verified and then date stamped. These are just a few of the fun and exciting things you can do with the IRS. These methods are ONLY recommended when you owe money.

Only if you don't mind the payment being credited to the wrong account.

If they puchased scanners that are so particular that they cannot accpet the most common type of paper out there, then I guess they may have to start using their eyes and brains again. "Be AFRAID! Be VERY VERY AFRAID!!"

All his income in box one of the W-2 is subject to income tax and SE. It is properly listed on line 7 of 1040, with it going on page 2 long form SE. All housing allowance is subject to SE. His other stipends are the only thing to go on Schedule C with appropriate expenses for those incomes. Any other "church related" expenses are 2106 deductions. Any housing allowance above the actual housing expenses is subject to income tax as well. Using the clergy worksheet will take care of this in ATX. Using ATX, when you enter the W-2, use the drop down box for special types and choose clergy. Program will flow the wages to SE and open the clergy worksheet. The church should NOT be withholding SS or Medicare. They may withhold Fed tax if the pastor chooses. The church is required to report to the pastor the amount of housing allowance he has been paid, but does not need to list it on the W-2. Pastor is required to report it on his return.

I just calculated that I am in violation of the rule about 356 times last tax season and 12 so far this year. At $500 per incident that means I owe $ 18,400 in fines.... wonder if I can set up a payment plan....

Was this their primary residence?

Remind her that you are more than ever under scrutiny of the IRS concerning Circular 230 and all the new regulations and fines. No matter how much she adds to your bottom line, she is not worth losing your ability to prepare taxes if the manure hits the rotating oscillator!!

Did the client receive a 1099_A or a 1099-C? If only a 1099-A, form 982 does not apply. 1099-A shows change of ownership i.e. sale. 1099- C shows cancellation of debt and is the only place a form 982 applies. Client may recieve neither, one or both. There may be many months between the client receiving the two forms.

If he claimed the LLC education credit, he would have to claim himself on HIS tax return. This alone will prevent her from claiming him a qualifying relative. File it, get the rejection, explain again, charge a reasonable P.I.T.A. charge and let the chips fall where they may. If the student loans are in HIS name, she cannot claim that expense as part of supporting him. Maybe it is time to politely fire her???

"...keep on swimmin...keep on swimmin...keep on swimmin..."

When I have that issue, I charge the same to amend the child as I do to amned most others. You end up doing the return as original in order to amend, so I have no problem at all charging for it. "You get what you pay for with free tax preparation!"

Husband owned property (land and a house) when the couple got married in 1978. It was gifted to him in the early 70's from his parents. Basis was very little. ($22k) 1996 they moved into a newly built home, turned home into rental. It has been rented continuously since then. Husband passed away Dec. 2010. All land and property has been deeded and titled to the spouse as of March 2011. Widow (age 72) now wants to sell the property and get out of the rental game. Sale will be final in May or June of this year. Question: Does she get stepped up basis on 1/2 or all of the rental property, or is her basis the same as before spouse passing? There was an appraisal done at time of settling the estate. There was very little basis at time of conversion, and depreciation has taken away about half of that. She is looking at a sizeable capital gain without the stepped up basis, and I want to do all I can for her, but do it correctly. I have received differing opinions from my co-workers, so I thougt I would consult the oracle quality of the knowlege and experience of members of this board.

Agree with Lion and Bulldog

I have been getting the same error when I try to efile an Ohio return without e-filing the Fed. I am wondering if this is a character trait of MEF that state can only be efiled if a fed is e-file before or at the same time? Anyone talked to Tech Support about this one??

Send me a PM and I will give you info about who I get computers from, and what you need.

How old is your computer? How fast is the processor? How much RAM memory do you have? We upgraded equipment here and saw huge improvement is program speed. However, if you have more than 200 clients, ATX is slow, slow, slow and there is not a blessed thing you can do about it.

Worrying about the DCN numbers matching is a waste of time.

My phone number has been in the phone book listings for 35 years. The phone company makes a TON of money NOT listing phone numbers, which can be easily obtained anyway. With caller ID technology, and the ease of screening with an inexpensive answering machine, or voice mail, I think people wanting their phone number to remain "hidden" is just an irrational paranoia for attention getting. "Just because you aren't paranoid, doesn't mean that they aren't watching you!"