jainen

>>Where do you want me to put it?<< That explains why my treetop needs to get lit first thing every morning.

>>why you would make an organizer that does not have the mileage split time period on it<< Some tax offices might find it useful to have an early version of the organizer, but obviously it can't be complete until all the new legislation and rulings have been finalized. The IRS didn't announce the split rate until June 23.

>>they want the company to reimburse<< Well, okay I suppose, but technically it is wrong. For one thing, an employee can't decide to have an accountable plan; it would have to be authorized by the corporate board in the regular way. And even with an accountable plan, documentation must be submitted within 60 days. So unless your client decides to ignore the rules, it is a non-accountable plan. Reimbursement must be added to taxable wages and documented expenses claimed on Form 2106 subject to 2% limitation. Now let's see what we are talking about. 1300 miles divided by 20 something? miles per gallon times $3 something? per gallon -- Are we talking about 195 dollars? Tell her to take a $250 Christmas bonus and call it even.

>>pretty sure it shouldn't be at the standard rate which includes the depreciation<< They can't deduct the standard rate because they don't own the car. Their only choice is actual costs, which they can't support without records. I would suggest they let 2008 go and start a mileage log with gas receipts for 2009. I would guess it's of little value to them anyway. Employees who get a company car are usually well-paid with the company covering most work expenses, thus increasing the 2% AGI limitation. You may also find that a lot of the work-related mileage is not much different from commuting.

In TC Memo 2008-274, the court disallowed EIC because Daddy didn't put his name on the birth certificate, so taxpayer couldn't prove a qualifying relationship with her half-sister's kids.

>>Need words of encourgement<< Go for it! Not only is it a big advance for your career, you will thoroughly enjoy it on a personal level. Non-profit is kind of a specialty both in taxation and accounting. It is also a huge growth industry, so if you work hard you can guarantee a thriving practice the rest of your life. The opportunity to get started with an existing, successful organization is priceless. To see if you are ready for it, read all the free stuff. The IRS has a whole section of its web site dedicated to the topic at http://www.irs.gov/charities/index.html . Lots of law and accounting firms have posted articles about this hot topic on the Internet. Your public library has at least some things, too old for technical advice but still helpful for general orientation. Notice that there is a vast amount of NEW rules (and new strategies to avoid the new rules!) coming out all the time--that is one of the fun things about the specialty and also what keeps a lot of people away. If you decide to do it, you will need some serious resources like the PPC manuals that taxbilly mentioned. These are expensive, so see if the clinic or the retiring accountant already has some. Just remember that they are dated!

>>Where was the SEC?<< In his pocket, figuratively speaking. And in his family, literally.

>>I have tried the IRS website, Pub 17 for TY 2008, Latest IRS changes for TY 2008, etc, etc and can find NO mention of this.<< See the first paragraph of Chapter 16 in Pub 17 at http://www.irs.gov/pub/irs-pdf/p17.pdf. Also see the revised instructions to Line 44 of Form 1040 and the Schedule D Tax Worksheet at http://www.irs.gov/pub/irs-pdf/i1040.pdf

>>Maybe just saute onions (they make my eyes water)<< That's nothing compared to Chinese pepper oil.

>>the banks they were dealing with stated no income would be taxable<< Document that as your reference and treat it accordingly. The banks think these write-offs meet the requirements for excluding the debt relief from taxable income. You don't know anything to contradict that, do you? Since there isn't any capital gain either, it's simple. Don't worry that they had to rent it for a short time while trying to sell--it still counts as primary residence for this purpose. Now, to clear up your head cold, get a bottle of Chinese pepper oil and sautee some vegetables with it. (You don't have to actually eat the vegetables for this to work--just sautee them!)

>>I am thinking #2 is prefereable (1) to avoid Schedule A use, because taxpayer does not itemize<< I don't follow this thinking at all. He is obviously not self-employed, so how can he file Schedule C? If he claims unreimbursed employee expenses (including depreciation), he claims them on Schedule A. His status as an employee is set by the definition of a corporate officer, not because he is a shareholder. He must take a reasonable salary for the work he performs, and expenses incurred in that work are employee expenses. Go with #1. But don't deduct "monthly payments" except interest, since you are already deducting depreciation.

>>I sure cannot argue with it!<< I hope you mean you can't argue AGAINST it. You can certainly argue WITH it as a powerful tool. This story will be an important element in economic theory for the next century. Why, capitalism at the highest, most refined level turns out to be a gigantic Ponzi scheme!

>>1 shoe doesn't fit all<< Of course not, why should it? You haven't even said if this is all acquisition debt on the principal home. You haven't said what the basis is, or how the other elements of the mortgage relief fit. If you don't usually take an update class, this is a good year for it. Otherwise I suggest you stay away from technical references like the regs and study the simple language in the IRS Pubs. A good place to start for this topic is Pub 544 at http://www.irs.gov/pub/irs-pdf/p544.pdf.

>>are they any good?<< At least they haven't been shut down by the weak government regulators yet. What factors do you include in your definition of "any good"?

>>JUST venting << One thing I like about this story -- finally the media has stopped sticking up for the guys who have been in power the last seven years. Madoff isn't being excused as a "bubble," it isn't being blamed on health benefits for retired factory workers, unregulated Chinese imports didn't cause this. Much of our current economic problems was deliberately set up for the oldest purpose in the world. (But of course, Madoff was probably the ONLY bad guy!)

>>does it only apply in the case of foreclosure?<< It applies when there is income from relief of indebtedness, which could happen from restructuring a loan in lieu of foreclosure. But not every short sale has income from relief of indebtedness, and even if ordinary income is excluded there may still be taxable capital gains. Review the transaction and regs carefully.

>>an application that allows MAC to run ANY Windows application<< Far out--I can just imagine how THAT call to ATX tech support will go! I never understood all the fuss about "hours of wasted time" rebooting. I run all kinds of shareware and pirated legacy software. For me, the biggest advantage of PCs over Macs has always been the vast variety of software that Windows supports. Once in while something won't release its memory and I get to take a break while it sorts out. I turn off the computer at night and start fresh every morning.

>>new laptops with VISTA<< Laptops do have particular problems with Vista, especially concerning battery life and hard drives. In answer to jog's question, I assumed he was not considering a laptop because they are not typical for a tax office and he didn't mention that special requirement. And may I say again, all the talk about Macintosh is useless on a tax forum.

>>The public speaks loudly, and mirrors the feelings of us techie types<< No, it is the techie types that have been so vocal about Vista. As I said, the majority of Vista users have been satisfied, even though the new features were more convenience than necessity. No new killer app, for example, and things like security and great search capability are hard for normal users to quantify. The main thing wrong with Vista is, like most Microsoft products, it has terrible marketing. We all love to hate MS. They always promise more than they deliver (well, they've been promising that new file system for 15 years so that's no surprise). They confuse things with too many choices, including new versions of XP. Apple responded with a dynamite advertising campaign (but not a better product--they didn't deliver on promises either, like the touch screen, and anyway that's irrelevant because tax software isn't written for Macs). Sure, Vista has a big hardware requirement, but jog is buying a new computer anyway. So Maribeth's caution to "never upgrade" is not relevant either. Jack reminds us of how many people have switched to Apple, but that is not an option for a tax preparer. KC and Dan make a useful point, however, that many XP drivers don't work with Vista so if you use older scanners and printers you may need to upgrade them as well.

>>a lot of people are having trouble with Vista.<< A lot of people have trouble with Cable TV. What do you care about them? The salesman is just talking in cliches--MOST people run the most advanced operating system successfully. Ask about your OWN needs for networking, peripherals, Internet security, and the other features of Vista. Find out what the system requirements are for the software you plan to use next year, including any available upgrades. In general, you can't expect old technology to serve you indefinitely.

>>without being an employee<< Corporate officers are employees by definition. He can ignore that fact, but he can't escape it.

>>I just have to hear, or see, it again<< Scroll back up a couple of messages--OldJack posted the actual tax code. Expenses = zip. How did the board figure $700 was the "going rate"? Even if those rooms are small, say 10x10, that's only $3.50 per square foot. Call your nearest real estate office and ask what it costs to lease 200 s.f. of commercial space. Including utilities, janitorial, and everything. Tell your client to demand an extra $200 per month gross up to cover taxes. Then she won't need deductions on Schedule E.

>>Is it OK to have a SIMPLE plan at a church?<< My understanding, which I can't support with any affirmative ruling, is that a tax-exempt employer CAN set up a Simple IRA because it's not a qualified plan. Notice 98-4 at http://www.unclefed.com/ForTaxProfs/irs-dr...998/not98-4.pdf only talks about the 100-employee limit under the topic, "Employers that Can Establish Simple IRA Plans."

>> The worksheet doesn't show an exception... I think there should be one<< Why do you think that? Do YOU have a pub or notice or other resource to suggest such an exception?

>>Client wants to avoid OIH on tax return<< That won't be a problem. She can't deduct expenses when she rents to her employer anyway (at least, if she works in those rooms at all). The idea of using an accountable plan is popular among tax advisors, but nobody seems to ever cite any rulings to support it. Just tell the employer to pony up a few more bucks to cover the extra tax she'll have to pay.