jainen

>>can he show rental income and expenses without depreciation, since he does not now own the property?<< I would seriously consider disregarding the transfer, as it appears the principals have agreed to. Certainly the bankruptcy court isn't going to endorse a plan to give your most valuable asset to Mom (while still collecting all the income), pay off the lender who can hurt your credit score the most, and stiff everyone else.

>>ways that an individual can avoid the AMT?<< Quickfinder (http://www.quickfinder.com) has a lovely full page comparison chart showing the most common kinds of deductions and situations that trigger AMT. (That QF copycat has one too).

>>She said that if I would only read the tiebreaker rules that I would see that they can choose who gets the EIC<< That's only true if you read the tiebreaker rules that went into effect after 2001.

>>realizing capital gains to offset the capital losses<< That is indeed the only way, but it doesn't necessarily mean investments. Personal assets like a car, collectibles, or a residence can be sold or traded to produce capital gain that would otherwise be taxable. That won't work for everyone, but investments don't work for everyone either. My earlier post on this was deleted, but we need to keep it in mind because for some taxpayers it's the best answer. In the original post, we only need to offset 15K. If bad investments mean you can't afford a home that is rapidly losing value anyway, it might make sense to sell it without excluding a small gain. There is no tax because you are picking up a loss that was otherwise unusable, and you preserve Section 121 for another property in the next couple years.

>>He hasn't paid me a dime<< I'm sorry, I misunderstood. I thought you did the federal for them. Well, then she alone is your client. Briefly document his refusal to cooperate; her lawyer will be able to use it.

>>She should be able to get her taxes refunded....I hope just to her!<< Hey, if that's really the way you feel, then you must immediately withdraw from this engagement. Her loving soulmate is also your client, and ethically you can't favor one to the disadvantage of your other paying client.

>>the rebate will also be $195.00 less<< Remember they get another shot at the rest of that $195 next year if their income is higher.

>>there is a way to take all the losses at once<< He can sell his house and elect not to use the Section 121 exclusion.

>>How do you show the refund of FICA on the 1040X?<< It's line 67 on this year's Form 1040; probably slightly different for the relevant year. That flows to line 11 on the 1040X somehow, depending on your software.

>>What forms to file to make this "Protective Claim"<< Use Form 1040X and write "Protective Claim" in giant red letters at the top. Attach the new 1040, and a statement explaining completely EVERYTHING that regulation asks for. Plagiarize the exact wording. Then send in by registered mail. I think the chances are pretty good. You aren't asking the IRS to accept any new facts about the income or deductions. And the taxpayers didn't do anything wrong except pay more than they should, which they had no control over, so that's really unfair and we know how much the IRS cares about fairness.

>>my original question, which was never answered<< As we get more information, we are noticing some very odd, apparently political timing about this thing. The Washington Post, for example (which is not normally reviled as the liberal media), reports that it was a pretty standard IRS investigation of banking irregularities for several years. In fact, they assumed Spitzer was the victim of a scam. In January the justice department (which as I said is tightly run by a top White House official) set up a wiretap and a surveillance sting. This nailed the prostitution ring but the governor turned out to not be involved at that time, so they didn't do anything about anything. Later they developed a new connection, and so immediately moved on the governor. I don't know. It all seems very weird to me. But not as weird as saying the Justice Department brought down the administration of one of the largest states without bothering to ask the Justice Department.

>>come up with a cost basis for the acres that were sold?<< How did he determine what they worth at the time he signed the check? That was only a few months earlier; surely he remembers. Surely selling off the extra acreage was a big part of the plan.

>>the White House getting involved?<< This wasn't rounding up a few johns at the local precinct, kc. The bust was made by the FBI, a.k.a. the U.S. Department of Justice. Do you think they moved on the governor of New York without telling their boss, Attorney General Mukasey, who just happens to be a top White House Official sitting next to the Secretary of the Treasury (a.k.a. IRS) in the cabinet meeting chaired by George Bush? You know they went into this looking for dirt in a Democratic candidate's home state party. But they found something else, and had to go to Plan B, the old reliable sex scandal. How likely is it that this experienced prosecutor set up a paper trail of shell corporations to pay call girls? At least his predecessor kept it all within his own departmental budgets. And note that the administration is not content to let the wheels of justice follow the well-worn ruts. The CBS story you quote says the U.S. attorney assigned to the case is still under pressure to make sure the accused doesn't get his side of the story out. Something's going on.

>>they would be covered by their homeowner's policy<< That's probably not good enough, regardless of what the agent supposedly promises. Babysitting is a relatively low-risk job, but things do happen. Worker's Comp is one of the very toughest areas of labor law. You could lose it all.

>>the small print<< How many tax preparers does it take to screw in a light bulb? It used to be one out of three, but now they can't do it at all unless it's more likely than not.

>>Put your dog and your wife in the trunk of the car for an hour.<< My car don't have a trunk, so I tried it with my neighbor's car (with my neighbor's dog and my neighbor's wife of course). Results were inconclusive. Then I tried it with my pickup truck. I don't actually have a dog, but I can tell you that my cat is definitely not my best friend. In fact, I don't think I have a best friend at the moment.

>>add closing costs and realtors fees to the mix and they end up with a loss<< Sure, I understand that. But the original post wasn't talking about expenses. That's extra. In fact, even a drop in value isn't really the issue. We are being asked to believe that the owner preferred not to get a fair price, but now wants a tax break because he could have sold it for more than he did.

>>what consenting adults do behind closed doors<< Y'all being duped again, my friends. What went on behind closed doors was not consensual sex. And Tom, this certainly isn't about political affiliation. The investigation was started by some banks who noticed suspicious financial activity at the highest level of state government. Was it bribery, illegal campaign finance, money laundering? Then the White House steps in, and all of a sudden it's gone -- just hookers, nothing to see here, move along everyone. The governor's really sorry, look, here's his faithful wife.

>>the credit for purchasing energy saving light bulbs<< These were introduced with various rebates offered through local power companies. Let 'em down gently, like "you can't take the credit for non-business property."

>>I have handled these in the past, but never with this large a loss<< No, indeed. Until recently we used to argue that the appraisal couldn't be right because the house sold for so much MORE.

>> 2nd Circuit Court and the IRS<< If'n y'all don' mind, I'd a be intrested in th't pertikerler citation. My doubts center around the FMV. The estate had it appraised for its own purposes, which apparently did not include sale on the open market. Because the appraisal was vastly higher than actual market conditions, I wouldn't accept it for determining gain or loss unless a substantial amount of time passed or some specific market force operated to alter the value so drastically. And no Realtor in the country would go for that line about "they just did not want to deal with the piece of property." The FMV value is whatever the market will bear. Property values are dropping, but not 35% in one summer.

>>I need one (very simple) 1120<< You can download the forms from the IRS web site and do it by hand. Or get ZillionForms for partially calculating forms. Or file an extension and wait 'til May, then grab a demo package from whatever company will give you business forms with full functionality. Or outsource to another office.

>>when divided by 2 or multiplied by 2<< I don't mean to over-emphasize the math. There is plenty of room for theory mismatches on Schedule D too, everything from a wash sale to "I don't have to report options because they aren't listed on the 1099-B." Sometimes software doesn't deliver, but it's generally because you aren't following instructions. The word "various" can often be problematic on Schedule D for a variety of reasons that all depend on what the software expects the word to mean. Other date entries can be so misunderstood it won't even give you an error message. All in all, and without knowing any detail whatsoever, I would vote that ATX is correct in this particular case.

>>You mean nobody has to sign anything when a return is filed electronically?<< No. I mean you don't have to deal with clients bringing in an IRS letter about not signing.

>>read to him the part where it says he did not sign his return<< There are so many advantages to electronic filing, I don't understand why anyone ever questioned it.