jainen

>>Expenses and points are amortized over the life of the loan.<< This is a common treatment, but wrong. Pub 527 explains, "Certain expenses you pay to obtain a mortgage on your rental property cannot be deducted as interest. These expenses, which include mortgage commissions, abstract fees, and recording fees, are capital expenses that are part of your basis in the property."

>>AMT depreciation for general equipment defaulted to 200DB<< Presumably general equipment would be subject to bonus depreciation. According to the Instructions for Form 6251,"The special allowance is deductible for the AMT, and there also is no adjustment required for any depreciation figured on the remaining basis of the qualified property."

>>I will spend up to 30 minutes with a prospective client (by appointment).<< I also take time to meet with a prospective client and review their needs and my own. Tax strategy as well as workflow. It seems like most new clients have an IRS letter with a collections or non-filing issue. That usually calls for an advance fee or retainer, which is a great way to see if they are serious about quality. I like a self-filer who realizes their situation (or the tax code) has gotten more complicated. I will give a comparative price on their prior return, but no promises.

>>enter there W2's and give them an estimate of their refund<< No way! Taxes are too complicated and you can't give a new client any meaningful numbers without a full interview based on a written organizer and a copy of at least last year's return. Maybe more. So if he says it's just W-2's, refer him to Free File at www.irs.gov. He doesn't need you--and you sure don't need him!

>>an idea behind the Roth was that the contributions were post tax<< Generally yes, but remember that 2010 conversions weren't taxed until later, and 2012 is part of that later. 1099 codes are notoriously unreliable, because nobody else reads the fine print either, but for what it's worth the bank has told the IRS this was not a qualified distribution. The beneficiary will have to get information from the decedent's Form 8606.

>>inherited Roth IRA is not taxable<< There is NO such rule in the tax code. Just like a traditional IRA, a Roth is income in respect of the decedent and taxed to the recipient exactly as it would have been to the original owner. Because it went to a beneficiary, it is not subject to the 10% penalty for early withdrawal. That's why they used Code T. But to be non-taxable it must still be a qualified distribution, and nothing in the original post suggests that. It may be that the account had not yet met the five year period for establishing a Roth or the separate five year period for conversions. In that case, part of the distribution is indeed taxable!

Want a flat tax? Okay, AMT (in addition to, not instead of) Want a sales tax? Okay, that too! California requires tax preparers to ask about Internet purchases and add "use tax" to the return. We offer clients a choice: report actual invoices, or pay a standard amount based on AGI (and some clients get to do both!).

>>he drives so many darn miles for work, the standard would have been better in the long run<< Taking the big deduction in the first year (I assume you mean bonus depreciation and 179) was perfectly appropriate. Now if he trades it in, Section 1031 will both preserve that past deduction and allow standard mileage rate in the future. On the other hand, that car is three years old now with high mileage, so his actual expenses will probably be going up anyway.

>>faking... << Photoshop is such a great program! I must admit, although I don't agree with his politics, IMAO.US is a funny guy. Well, not his jokes about guns, but generally.

>>the "millions" of returns that ATX has processed<< Interesting number--it must mean at least two million. The ATX website claims 35,000 customers, so that's like an average of 10 returns per day so far. On the other hand, surveys show ATX only has 5% of the professional market. Not even counting the fact that most ATX users are sole practitioners with hardly any firms of more than 5 preparers, but let's presume that all comply with mandatory e-file. There's only about 100 million e-file returns total from everybody everywhere, so it seems to me ATX is claiming to have already successfully made it half way through the tax season!

>>Liquidated damages are taxable?<< That's one of those terms that you can't assume is being used correctly, so read the paperwork. It's supposed to mean a payment for breach of contract, such as forfeiting a deposit on a real estate contract. I've seen it argued as capital gain, but that doesn't work because no capital asset was transferred. Others say a basis adjustment, which has a certain logic, but can't cite any authority. So it's ordinary income on Line 21, with any related expenses on Schedule A. On the other hand, I don't think the buyer can deduct it. It is not an investment expense, since the obligation to pay arose from the breach of contract instead of an intention to complete the purchase.

>>Can I do this?<< Not yet, but maybe with more information. >>How? Form 4852, which requires an explanation of attempts to correct the original W-2. >>Should I do this?<< Certainly, if the client is right. That's why IRS has the form My first guess for $740 would be about the last paycheck of the year or prior year. Or it may be a reimbursement or fringe benefit, a salary advance, or a problem with new software. Lots of possibilities, so the client needs to ask the bookkeeper for clarification.

>>I seem to recall that you don't take the depreciation in the year of dispostion<< You are still thinking ACRS, old-timer! Nowadays you keep going. Just remember, real estate is mid-month convention so if (for example) the disposition was on June 30, that's five and a half months divided by twelve, not half.

>>"but...blah, blah, blah"<< That is unkind and I don't deserve it, SCL. Nobody on this forum cites actual regulations and procedures more than I do. Nor does anyone identify interpretation as "my opinion" more than I do. My participation here has always carried a strong theme of high ethics and solid professionalism. All of this is exemplified in this very thread. If you don't like it, you don't need to read my posts.

>>i guess a better tax advisor doesn't need adequate logical skills.<< Sorry if I offended you, but I stand by my statement. In my opinion, ineffective advice is no better than wrong advice. Neither one gets the job done.

>>see the PM I sent you<< Thank you. I never use private messages in this forum. Put it all up for everyone to see and comment.

>>Taxpayer did not have substantial information<< The word there was "substantiation," not "substantial." That's from an unrelated section of the tax code, which requires specific documentation of charity prior to filing. The "substantial presence" test means that EVERYBODY who lives in the U.S. is subject to the whole tax code.

>>the person was here illegally... they may be considered a "Non-Resident Alien" for those years before they had a Permanant Residence Card<< No, that is absolutely wrong! Pub 519 says, "You are a resident alien of the United States for tax purposes if you meet either the green card test or the substantial presence test."

>>grandma or anyone else does not have this logbook<< Then they need a better tax advisor! Look, when your client comes in and says they took business contacts to lunch, you tell them they need a logbook for their mileage and entertainment expenses, right? Same thing when they ask about gaming. You might miss it the first time, but not after that. Pub 529 tells them exactly what they need so you can print that page for them.

Dear Lender, My client says he has applied for a mortgage. In completing his tax return, I am required to use all information I know about. Please send me a letter verifying his self-employment income. Thank you.

>>suggestions where I can get some "training?"<< Just like all your other computer games. For example, Halo 4--okay, that's XBox but same thing. That's the one where Master Chief battles an ancient evil bent on vengeance and annihilation, so I naturally thought of it in this context. What to do? Well, do everything, in every combination. And when something works, SAVE.

>>it looked even more confusing to me as they tried to define session<< It is worth figuring out though. The problem in the original post is that "Client won $2300, but in doing so, spent $4,200." If he doesn't itemize deductions, he gets taxed on $2300. Even if he does itemize, his AGI is still $2300 higher. There are two ways to reduce the $2300. First subtract basis, that is, the amount of the winning wager. If you won $2300 with a $5 lottery ticket, that's only $2295 on Form 1040. Then deduct non-winning wagers from the same session, poorly defined variously as a single game, a table, a day of playing, etc. So if you dropped all $4200 in one afternoon playing roulette, during which one spin came up plus $2300, in spite of that W-2G you don't have to report anything because you had a net loss in that session. In fact, if you won again the next day playing keno, you could offset it with the roulette loss on Schedule A. The way you pull that off is with a contemporaneous logbook and other documentation showing the details required in Pub 529.

>>its to late to retroactively elect corp status<< That depends (at least in part) on the practitioner's skill.

>>a resounding thud today<< Let's not read too much into the fact that the same judge who issued the ruling still stands by it. However, it seems that now he is starting to back off. He emphasizes that the PTIN system is indeed valid, presumably fees and all, and that is the core of tax preparer registration as it includes CPAs and EAs. The fees he ruled against are the 3rd party costs for testing and CPE. Meanwhile, he makes clear that the entire RTRP program structure will remain intact, albeit non-mandatory, until the statutory authority is clarified. JohnH is right about the bureaucratic element. For all the rhetoric about "the harm that may befall," this case is just about who gets to make the decision, not what the decision is.

>>it basically telling me to treat it as a "disregarded enity not separate from its single owner for purposes<< That is only the default treatment, but NOT her only tax choice. She is a professional and has a right to competent service from her financial advisors. So get it right or refer her to someone who can. You need to discuss projected profit and loss, auto and other expenses, fringe benefits, Social Security and income tax rates, and other factors that could make Form 1120 or 1120-S a better choice, maybe even much better. Or maybe not as good. Either way, a page of interview notes can provide you peace of mind. The fastest way to begin is to download Continuing Education from someplace on the topic of Choice of Business Entity. That would at least show you the basic issues, though hardly qualify you to give reliable advice. I apologize if my tone sounds a bit stark. Even though one judge thinks tax preparers don't need to know what they're talking about.