jainen

>>This did pass my iespell checker, and the WordPerfect checker<< That's a good one, kc. (MS Word thinks Miss steaks should be capitalized because it is somebody's name .)

>>what do they have to offer me that would make them worth a "living" wage??<< You got it backwards. Why should someone waste their skills or even just their time if you won't pay them enough to live on? Low wages attract, well, people who can't get anything better. Offer a wage that people can afford to accept and you will get people who can afford to accept it. >>If your assertions about business are correct, why is GM losing Billions now when they used to make Billions in profit?<< Not exactly a typical business model, at least for my clients, but the answer is simply that they didn't pay attention to what people wanted to buy. Look at Ford selling Jaguar this month, losing billions not because of wages but because they made a stupid capital investment. Maybe if they had put those billions into wages they could have atttacted some better engineers, or at least ad men.

>>Yet the workers want the wages of a skilled employee immediately.<< I know what you are saying, but I still take the worker's side. You think you are generous in offering them paid training; they don't think your offer is good enough. You already know you can't find anyone else, so you either pay them more or you do without. What they are worth is not determined by your prospective investment in training, but by the labor market in general. Now, you did say you are only looking for someone who can stay sober long enough to drive to work safely, but apparently there is a shortage of those qualifications in the labor market so naturally the price goes up.

>>These cause wages to be inflated above what the jobs are truly worth.<< Your conclusion makes no sense. It is not possible for a company to pay more than a job is worth. The company must respond to ALL market forces, including it's own industry associations as well as those of its suppliers. Workers have just as much right to set wage levels as vendors have to set the price of parts and materials. It's what the market will bear. Bulldog Tom says he has twenty vacancies today. Well, if he offered a competitive wage he would pull workers from other companies who ARE already providing satisfactory compensation. He admits that his competition is bidding 40% to 60% higher and paying workers accordingly, but his attitude is "There are jobs available today, but not many that are going to pay a living wage to truly unskilled workers." If you need unskilled workers, how exactly do you expect to recruit them if you won't pay them enough to live on?

>>Does the basis of the customer list equal annual sales<< Sales is what he is using to determine FMV. He can't use the same number on the other end too. He could have capitalized some elements of creating the customer list, such as software, but I'm sure everything was already deducted. Your client might have a negotiating advantage in valuing the customer list, which must be done with the buyer's agreement. The buyer might want to price it much higher if he plans to sell the list separately, or he might want to discount it if he isn't going to use it. And of course unless the seller gets paid for a non-competition covenant, he is perfectly free to continue to use those client contacts for further business activities.

>>advise the client to forget that one<< I wouldn't go that far. Find out why he wanted the money in a Roth. The usual answer is tax-free earnings, plus ability to designate a beneficiary. Both of those goals are easily obtainable with greater flexibility and lower fees through traditional investment and estate planning strategies.

>>doesn't look a lot like earned income<< I don't have a citation handy, but compensation for purposes of IRA contributions is defined in the code. It includes wages, self-employment income, non-passive partnership income, and certain support payments. Since he is not characterizing his fees as income from a trade or business, they do not qualify for the contribution he wants to make.

>>it had the answer where MTG did not?<< "Taxpayers can elect annually to capitalize taxes and interest on vacant land rather than taking a current tax deduction for the expenses [Reg. §1.266-1( B )(1)]. The election is made by filing a statement with the original return for the year the election is made. The election is effective only for the year for which it is made. The election is useful when the taxpayer does not benefit from deducting the expense, such as when itemized deductions do not exceed the standard deduction, or when investment interest expense is limited by investment income." -- Quickfinder article on Schedule A investment interest expense Master Tax Guide does not explain HOW to make the election or WHY, but it does give a broader answer covering personal property and additional types of carrying charges during construction.

>>I should have read more than the Master Tax Guide<< Yes. You should be reading Quickfinder instead.

>>new rental is set up of deprec sched at 19,000 << That's an election you can make for convenience, but it reduces the depreciation deduction to spread the whole $19000 over 27.5 years ($691 per year). The standard way is to simply continue the old depreciation schedule for the $8000 exchange basis ($872 per year for nine more years). The additional $11000 basis can then be set up for 27.5 years at $400 per. It's more complicated to carry two schedules on the same property but with your numbers you almost double the deduction that way. In fact, you probably more than double it when you allocate part of the basis to land value on each schedule, because I'm sure the land is a much larger percentage of the current purchase than it was eighteen years ago.

>>OMG........I agree with jainen<< Don't feel bad--several people agreed with me today. One actually had to go back and change his or her post to avoid agreeing with me! And that doesn't even count everyone who agreed with me about the peppermints but were too embarrassed to admit it.

>>"Show me why YOU are worth more than $8/hr to me."<< This has nothing to do with how much someone is "worth." It's simple arithmetic. Even if you could find a full-time schedule, minimum wage will only get you $1400 per month--not enough to pay for a studio apartment with utilities. How much rent did you pay in 1968? Not more than fifty bucks, so even though wages have tripled since then, housing has twenty-upled. Not labor unions or work ethic. Just simple arithmetic.

>>I will definetly look into amending the last 3 years<< To save you time, I'll point you right at Reg. Section 1.266-1( C )(3), which specifically says you can only make that election on an ORIGINAL return.

>>"Well if I don't keep a job, mom and dad will support me."<< I don't know how it is with Ohio kids, but the California version goes like this. "If you don't pay me enough to cover basic rent and transportation, then I can't afford to live on my own and I'm stuck with Mom and Dad. So as long as I'm stuck with them anyway, I might as well look for a better job." Our state minimum wage is $8, but my town has a "living wage" law at more than $12.

>>(ie candy undies)<< If you're thinking of switching, I do recommend you avoid the peppermints.

>>Each of her children receive about $7200 a year in benefits. She was unemployed last hear and had only $4500 in income. << Social Security is considered to be support provided by the recipient, so it seems that the kids provided more than half of their own support (unless there was 3rd party support such as welfare or free housing). The IRS was right this time--they are not qualifying children or dependents. Amend the mother's return to remove the children, then file them separately claiming their stimulus-qualifying Social Security. (No tax prep fees, of course!)

>>see he wants to take a chance<< Do YOU want to take a chance? You know that he did not capitalize those costs, so if he takes them now you would be signing a return in full awareness that he is deliberately understating his gain.

>>a huge cost increase<< The minimum wage last month was only 60 cents more than it was ten years ago, so the "huge increase" is only about 10% of the pizza parlor's labor costs. Don't you think the price of cheese went up 10% over the last decade? If the pizza parlor isn't hiring it's because they don't have the CUSTOMERS. Are people not buying pizza because the delivery guy gets two and half bucks more on a 4-hour shift? No, they are cutting back because their own wage scale, not just the minimum, is so far behind the inflation curve. That fact is the opposite of Bowyer's rant, and a big part of the reasoning behind the Bush administration's stimulus rebate. Consumers can't buy stuff if they don't have the money. What Bowyer characterizes as a seasonal fluctuation last month was the worst employment news in a quarter century. It wasn't caused by the pizza delivery guy, or the kids on summer break.

>>notify your client IN WRITING, IMHO, citing the code sections, which things and services may be exempt<< Well, maybe--that might be technically correct. But why can't you just send an exotic dancer around the room with a big hat? You'll get plenty of money to cover whatever the bill comes to.

>>I would like a simple contract addition that states that if CCH fails to delivery the product ordered by 01/15/2009 you will be only entitled to a full refund of all the amounts you paid for such product.<< ATX gives you a generous 45 days to evaluate their software. For a guarantee of January 15, simply order it in December.

>>My firm wants me to just send in the POA w/out the OR license number just to see if they send it back or if it goes through<< Suppose you do slip it by a sleepy clerk--aren't you setting yourself up for a malpractice claim? I don't know what your engagement letter says, but if you fail to achieve desired results the client can easily show you were not qualified for Oregon representation. Even if you win, the client can say you breached confidentiality because you had no legal access rights and no right to tell the state tax people anything.

>>make this an informal court<< There is really no need to assess fines, if you have a properly structured schedule of filing fees.

>>Is that considered capital gains..?<< No, because the land was not held as a capital asset, but for sale in the ordinary course of business (i.e., inventory). The K-1 is correct.

>>I did a good job on your return and got your actual taxes down to $301<< Possibly. This might have been a good year to deduct sales tax instead of state income tax, or depreciation instead of section 179, or something else that would raise the liability that generates the rebate, and leaves maximum benefit for next year.

>>vote early, and vote often<< Come on, folks. Voting is SO last century. Nowadays the Party uses a sophisticated three-step system. First there is the media campaign to prepare us for the pre-selected result. Then key up-and-coming local Officials perform some electronic mumbo-jumbo. Finally, the Judges pronounce everything to be well and good.