jainen

>>that will be the end of it<< ... unless New York decides to collect the minimum franchise tax for each year until he formally dissolves the corporation.

>>it was OK to deduct the interest on Schedule E<< I agree. You can deduct rental costs even if you use the rental receipts for a different business. And most of the income comes from equity growth--that's the main business purpose because fair market rents lag so far behind property values. So it's reasonable to deduct the costs of tapping that equity. And I also agree that you can tell the auditor that Booger said it was okay.

>>vote......and vote often<< Is that really necessary any more? I thought computers are taking care of everything for us.

>>a new belt that is brown/black reversable<< That will certainly come in handy if you put your pants on backwards.

>>they insist that they just need the nips<< I know the feeling. I always keep a bottle of red in my desk for times like that.

>>the person goes out and works<< A disabled person is allowed to try to work. For Social Security Disability, the try can be up to nine months.

>>no mention of any requirement that the child must be receiving SSI<< SSI is not required; it's just very good evidence. You would expect a disabled person to apply for potential benefits and should document the result. A denial could be based on income or resources rather than medical reasons. You've quoted the basic definition at 22(e)(3). Substantial gainful employment by itself is not the last word, but it certainly calls for more investigation into how much you can rely on the doctor's "letter."

>>the OIH deduction is usually so small that it is not worth the time and effort<< That's the basic reality. At least with Schedule C you can save some SE tax, but what do get from Schedule E? 1/10 of utilities? Can you believe any landlord truly sets aside part of his own inner sanctuary for exclusive use without a dime of revenue? And works regularly and continuously at "managing," whatever that means? There's a reason rentals are called a "passive activity."

>>Of the IRS instructions?<< The Dependency Support Worksheet is on page 32 of Pub 17, not the 1040 instructions. I posted the citation yesterday, with a short discussion in Pat's thread "Dependant Worksheet." The Tax Tools version adds automatic calculation, although putting a computer screen between you and your client makes an intimate interview about personal expenses and family composition rather awkward.

>>how much insurance you need<< Of the three advisors, this is #1. If "one of his drivers falls asleep at the wheel and takes out a bus full of kids," the standards of his industry aren't going to be that much help.

>>doing a Fed sch c for just the time he was a NJ resident<< Like most states, New Jersey calculates tax based on world-wide income and then prorates that. So you do in fact need the federal numbers. Pennsylvania allows you to allocate income before you calculate the tax, if you have separate bookkeeping for Pennsylvania.

>>If their was substantial gainful activity the disability would be in question<< I wouldn't accept "a doctor's letter stating that she is permanently and totally disabled," especially since she is pulling in several hundred a month at a part time job. She's showing that letter because the one she got from Social Security said she was NOT permanently and totally disabled. She's too old to be a qualifying child and too rich to be a qualifying relative. She is not a dependent for tax purposes, and therefore she can not qualify the mother for Head of Household.

>>I was hoping ATX had one << I suppose it might be nice to have a computer version that recalculates automatically, but the math is really very simple. Whenever I do one there are always lots of changes. The client has no idea what the actual food bill is, so she picks a number that she used ten years ago for food stamps and when we get to the bottom it doesn't work. Then we have to play around with everything until a realistic budget emerges. For me, it is much easier to do that with a paper being passed back and forth. I wouldn't even type in the finished version; somehow a neat printout lacks authenticity.

>>they would sue both the LLC and the individual << Of course they would. And frankly, the individual probably IS responsible in a single-member LLC. You can't escape the consequences of your OWN negligence. But if an employee or a subcontractor causes the damage, or a customer falls down or there is a flaw in a product or service, the owner might not be liable if he took ordinary care and had maintained the LLC as a separate entity. That's why having a separate bank account with formal draws is so important. Don't pay personal bills directly from it, don't accept payment in your own name. Title is just as important. Don't buy the truck on your own credit, even if you could get a better deal. It's bad enough that you tell the IRS your business is NOT a separate entity. For heaven's sake at least don't run it out of your spare bedroom. Keep the business assets separate. Since LLC is a simplified format, owners tend to get sloppy about it. For example, they don't keep minutes of shareholder meetings and other normal business records. These are well-established issues for corporations. There isn't much case law to support the liability shield for an LLC, so a lot more risk falls on the owner who doesn't take extra precautions.

>>Read circular 230.<< No can do. The IRS has suspended Circular 230 indefinitely. I have no idea what's up with that, but it's true.

>>It should still be in force.<< Unless it is a durable power of attorney, it lapsed when the granter became incompetent to handle her own affairs. Deciding if a P.O.A is effective for signing a tax return is practicing law. Don't do it--just prepare the return and only answer questions about the signature in a general way. Document your referral to competent legal counsel.

>>In the South .......<< Never understood this gray and blue stuff. Seems to me you are all just back East.

>>You are never to old to commingle!<< A very old guy named Kris Kringle Went in to a bar to commingle. After a while a lady did smile, Which caused him all over to tingle.

>>a fair market value of property of $21,000<< Was this in 1975 or was he living in his pickup truck? Frankly it sounds like something in a textbook. Well, anyway, 1099-A does not mean any debt was cancelled.

>>Does ATX have a dependant worksheet?<< You mean a worksheet to determine whether you provided more than half of a person's support? Worksheet 3-1 on page 32 of Pub 17 has been around for ages (IRS stole it from H&R Block decades ago), and there is nothing better. Photocopy it and go to work with a pencil (and eraser). It was originally designed for what is now the qualifying relative support test, but with a little thought you can use it for qualifying child as well. Besides giving an excellent breakdown of support factors, it is how we know that AFDC and SSI are considered to be third party support.

>>The end is near<< I'm not worried. I set up three separate entities (Wine.LLC, Women.LLC, and Song.LLC) to handle all my bad habit activities. I'm very careful not to have personal responsibility for any of that.

>>she is mad at HRB because they wouldn't let her file Single last year<< What a dummy! Hasn't anyone told her the first appointment is just to smoke out problems, then she can change her story as necessary and go to a new preparer?

>>the whole point of an llc is asset protection<< That is the theory, but quite a few people have other ideas. Mostly they seem to be vanity entities which either have no significant assets to protect or are operated with such carelessness that personal assets are compromised anyway. You find similar financial theories where a couple shells out 1% of their entire net worth to set up an A/B trust or puts volatile stocks in an IRA.

>>they are not SS taxes, that is why i am tilting towards Sch C Income<< That's no good, mircpa. The IRS has published the 20 common law factors to determine independent contractor status, and a foreign country's retirement system is not on the list. In fact, even withholding FICA has little relevance to the question. And neither does "how it was reported" as Maura says. The IRS has posted its own training manual at http://www.irs.gov/pub/irs-utl/emporind.pdf . It points out that courts have clearly ruled that a W-2 is not conclusive evidence one way or the other. And if you can't use that for U.S. employers, what difference does it make how they write it up overseas? As for the foreign tax credit (or deduction), sure, that's probably available unless he was working in Libya or was otherwise not eligible.

>>outside US for 71 days<< This taxpayer does not qualify for ANY exclusion because he was not outside the country for 330 days or a full tax year. You can't prorate that basic requirement, only the number of days of the qualifying period that fall within a particular tax year. Whether it is self employment or not depends on the ordinary factors, but seeing as he only had this single assignment I would expect it to be line 7 wages.