jainen

Weird, maybe. But certainly just a coincidence, something that seems like a meaningful connection but is actually just happenstance. Imagine how many lawyers are swarming around these tragedies, all looking for the deep pockets. They're bound to come up with something. And what pockets are deeper than banks? Where the lawyers are already swarming anyway. But there are also some very meaningful connections. One is mental illness--which our society hasn't had the courage to confront. Another is easy access to military weapons--which likewise.

>>the original point still stands, unrefuted<< I understand your original point to be that if someone wants to pay more tax he should do so. That can't be refuted because it is not a fact. It is an opinion, and an irrelevant one at that. Buffet did not say he wanted to pay more tax. He wants the tax rates to be progressively higher. That is an opinion too, but it is based on the historical fact that the only time we had very high top rates the economy boomed. High rates encouraged re-investment in equipment and labor, which increased production, which increased income, which increased tax revenue. Under Republican leadership--refute that.

>>One way to deflect an argument is to call the other side silly names. ...all of the above are just blowing smoke for their liberal sycophants<<

>>I am living some of those regrets<< Me too, but I'm conflicted. Of course I wish I'd been closer to my kids, but I also wish I'd had more ambition and energy to work even harder for their opportunities. I wish I'd followed through on my dreams, but I also wish I'd been lots more sensitive to the needs of those around me. I regret that I suppressed my feelings at times to keep the peace, but I very much regret those times when I busted up the peace by letting it all hang out. Oh well, right now I'm starting to regret that I just didn't retire last April.

>>I need to make an election to treat the trade in of a vehicle as a tax-free disposition<< Section 1031 treatment is mandatory in all cases; you never have a choice about it. The election you cite is only for MACRS property, so it isn't available if you used standard mileage rate. The "disposition" only refers to what you do with the depreciation schedule, not to the vehicle itself or to the exchange transaction. I don't know how ATX handles it and I don't care. My standard advice for everything about like-kind exchange is always do it all by hand and just override as necessary to copy it into the software. The way this election works is you combine the exchange basis plus any new cost basis into a single new depreciation schedule over the entire life of the new vehicle. The advantage of that is simplified accounting. Otherwise you have to track two "assets," the exchange basis over the remaining life of the old vehicle, and any new cost basis over the new life. That gives a faster write-off, but even faster would be to maintain the shorter schedule for the exchange basis while taking a 179 deduction for any new cost basis instead. Anyway, your election is described on page 10 of the Instructions for Form 4562. Good luck making sense of it.

>>I get $ .52 cents back in change<< Sounds like you only paid 24 cents a can, a discount of a nickle according to http://www.faygo.com. So don't forget to add two cents more tax for the ten cents savings, plus another penny SE tax since depreciation means you are treating this as a business.

>>a way to tax us on the money we save by mowing our own lawn<< This is the backwards argument again. In a sense we are ALREADY taxed on such savings, inasmuch as hiring someone else to do it would otherwise be deductible (under ordinary rules such as business or income production). The supposed "loophole" is in calculating the value someone else would pay YOU for the honor of hewing your hay.

>>until they die, become a full-time resident in a skilled nursing facility, or vacate the property<< They have a limited right to occupy--but it is NOT a life estate, regardless of what terminology is on the deed. There are a number of technical issues here, and there may be more than one answer at the same time under different provisions of tax and contract law. What are they trying to do--shift or avoid capital gains tax, disinherit some undesireable relative, qualify for Medicaid? Possibilities are endless, and I don't think an untrained reading of IRS pubs will provide reliable guidance. I suggest you engage an experienced estate planner. Start by explaining how and why the "life estate" was established.

Oh pshaw! It's just another government-is-stupid scree. Can't political commentators find any REAL tax issues? I think it's obvious, in economic theory, that a property owner has the usage value of his property. The same value is there whether he uses it himself or lets someone else use it. You have to count it either way if you want to know the value of housing usage in an economy. So in the context of Gross National Product you need inputed income for personal use of property. But there are giant flaws in Mike Flynn's logic about "the technocrats." First of all, his unattributed quote defines "baseline tax system" to include inputed income like this, but then points out that the actual tax code does not include it. There are an infinite number of tax and economic theories that aren't in the tax code, and to pick out one as a "loophole" is intellectually dishonest. It's even more directly dishonest to state the issue backwards as "money I don't have to pay" for rent when the calculation is of value received in lieu of rent.

>>a life estate is sold before the life tenant dies<< There are a number of technical issues here, and there may be more than one answer at the same time under different provisions of tax and contract law. What are they trying to do--shift or avoid capital gains tax, disinherit some undesireable relative, qualify for Medicaid? Possibilities are endless, and I don't think an untrained reading of IRS pubs will provide reliable guidance. I suggest you engage an experienced estate planner. Start by explaining how and why the life estate was established.

>>Government efficiency at its finest.<< I think it's clever! I think it's smart and practical. I thnk it's an elegant solution to a problem IRS can't address directly. I think it shows executive leadership without criticism of the legislature. It just moves ahead and gets the job done with maximum speed and minimum cost.

>>why actually the business standard mileage rate cannot be used for more than four vehicles used simultaneously<< That's not actually in the code or regs, which say you have to substantiate actual expenses. But they allow the IRS to make up its own rules. "The Commissioner may, in his or her discretion, prescribe rules in pronouncements of general applicability under which allowances for expenses described in paragraph (g)(2) of this section will, if in accordance with reasonable business practice, be regarded as equivalent to substantiation by adequate records or other sufficient evidence, for purposes of paragraph ( c) of this section, of the amount of the expenses and as satisfying, with respect to the amount of the expenses, the requirements of an adequate accounting to the employer for purposes of paragraph (f)(4) of this section." [1.274-5(g)] So the answer to your question is simply that the IRS considers it reasonable business practice, and all that other gobbledygook.

>>ALL of your ideas are assinine<< i must agree with that, Jack, with admiration and respect. It's impossible to honestly discuss our tax system except in terms of the assinine. But as for infantile--well, you aren't the one telling potty jokes.

>>tried to do a couple of returns<< Any new program will have a learning curve. Don't decide until you have worked all the way through a dozen or more. Start with extremely easy ones that won't stump you on the input, because you also need to look at the end product. Are you satisfied with how it prints, how it archives, and of course how it invoices? Look VERY carefully at your diagnostics and error-checking. You have gotten used to relying on this in Prosystems fx, but with anything new you may have to develop new procedures for quality control. An outside-the-box idea is to use the CPA firm's network license! You need to coordinate your new practice anyway, so you don't compete with your employer (which would be unethical because you have a duty of loyalty). You don't want them firing you when they spot your name on the public list of e-file providers, which they very likely check as a normal matter of market research each year. And who knows--they may appreciate your self-improvement efforts, especially since it gives them a trusted professional to refer clients they can't afford to handle for whatever reason. Personally, I went the other way. I brought my three dozen long-time clients to my employer this year. Independent practice is not easy or cheap any more.

>>visit the VA hospital in Dayton, Ohio<< I don't see how that could change my mind. The attitude I object to is that government per se is not capable of managing health care successfully, whether from bureaucratic problems, politic squabbles, or some other aspect of control. Certainly any individual facility might have unqualified administrators or poor community support, but that seems to me even more common in the private sector. I agree about relations with teaching hospitals. That's part of community support, and it works both ways--the stable funding of the VA hospital provides the private school with lots of opportunity for research and internships. By the way, although I am eligible for the government services I am paying for it with my own Blue Cross policy.

Thanks to you all, and yes it was a cataract. No problems. I went to the VA hospital in Palo Alto, where they have lots of experience. In my observation, those who worry about the quality of government health care are talking through their hats.

>>I don't understand your reply<< Sorry. I have tried to control my sarcasm this year, but it's hard when the facts themselves are ludicrous. How come the IRS has tell our industry to be reasonable? Well, even on this forum of intelligent, conscientious practitioners, I sometimes see attitudes which the IRS considers unethical. Tops is that even when we know the client's story is inconsistent or factually incorrect, we have no obligation except to put down whatever the client says. Almost as bad is, "I've always done it this way," meaning the IRS won't or can't catch it. Not far behind is an almost willful failure to read even basic instructions and pubs, not to mention the code and regs, before deciding what the client should be able to claim. Sorry about the rant. I'm a bit edgy because I have to get eye surgery tomorrow, unless the exam today shows I am not eligible.

>>I can't figure out if this payment from the State is used to calculate the over one half support test?<< It is. Since they don't meet the rules for a qualifying child, they are stuck with the old dependency rules, now called qualifying relative. It is unfair in the sense that it only adds up the dollars, which is the least important part of supporting a child. But of course tax benefits are only about dollars anyway. Your clients may have to be satisfied with the tax free government stipend of $40 per day , plus no doubt 100% medical coverage, which is vastly more than most working families have to raise their children. In half a year they received five times the value of the exemption and CTC.

Horrors! I may have to give up on actual clients completely and just surf these Internet forums. At least here I am still free to ignore inconvenient facts, cite irrelevant nonsense, hope the IRS won't notice stuff, and generally be unreasonable.

>>if the person is not 55 when the layoffs occur, does that mean that the penalty will apply eventhough the person would be 55 when the distribution request is made?<< Yes, that's what it means. Code Section 72(t) says, "after separation from service after attainment of age 55." In Summary Opinion 2011-113, Tax Court cited legislative history to support this interpretation. "In all cases, the exception applies only if the participant has attained age 55 on or before separation from service. Thus, for example, the exception does not apply to a participant who separates from service at age 52, and, pursuant to the early retirement provisions of the plan, begins receiving benefits at or after age 55." To show his heart's in the right place, the judge added, "While petitioner believes it is unfair and inequitable in these circumstances to hold her liable for the 10-percent additional tax, and we have sympathy for her plight, there is no statutory authority to hold otherwise in this situation. Only Congress can change the statute."

>>By Oct 15 he was in the hospital<< October 15 is NOT the filing deadline; it is the end of the extension period. When I said "time frame" I meant that if you are explaining how "the taxpayer exercised ordinary business care and prudence and was nevertheless unable to file the return within the prescribed time," you need to start with April 15. Because if he just put it off until the last minute, that's willful neglect even though he didn't expect to get sick. That's why the penalty is calculated from April 15, and I suspect it's why the IRS summarily dismisses most abatement requests. In that case, John's suggestion to try a sob story on the phone is probably the best approach.

>>"medically incapacitated" would mean that he could not make any financial transactions on his own.<< No, it's not as stark as that. In fact, reasonable cause could even include the serious illness of a family member other than the taxpayer. Filing a return is sometimes much more complicated than simply paying bills. It almost always depends on someone else providing information first, and generally calls for a healthy mind and spirit. What the regs say is "If the taxpayer exercised ordinary business care and prudence and was nevertheless unable to file the return within the prescribed time, then the delay is due to a reasonable cause." There is quite a lot of tolerance in the phrase, "ordinary business care and prudence."

>>By Oct 15 he was in the hospital and after the doctor let him go home he needed some extra time to rest.<< First of all, there should be little penalty anyway since it's based on balance due. Presumably a good faith estimate was paid with the extension request, so it may not even be worth the time and effort to request abatement. Late Filing Penalty will not be imposed if the taxpayer can show that the failure was due to reasonable cause rather than to willful neglect. That is generally hard to prove, but medical incapacity MIGHT qualify if he can specifically document his condition and the time frame. The argument is much stronger when the taxpayer can claim an excellent history of compliance (including a good faith estimate with this year's extension), and/or describe SPECIFIC changes in circumstances to ensure the failure will not happen again. Taxpayer should sign the request, not you. Quickfinder [stop screwing around and just get it] says, "Request abatement by submitting a written statement to the director of the service center where the return was filed. Include all facts showing reasonable cause for the failure and a signed declaration stating the following: [Reg 301.6651-1(c )] "Under penalties of perjury, I declare that I have examined this statement and accompanying information and, to the best of my knowledge and belief, they are true, correct and complete."

>>Warren Buffet has repeatedly said that he and others like him should be paying more tax.<< That is not the same as saying he should pay more even if others like him do not pay more. Some people feel taxation should only be about revenue, but Congress uses it for all sorts of social and economic stimulus. It is appropriate for anyone to save on taxes by making targeted investments or contributions or whatever else our representative government encourages. The current consensus (obviously not 100% agreement) is that wealthy taxpayers should not remove cash from the economy by paying into the government. My understanding of that position is that more money in the private sector will stimulate economic growth that will in turn generate higher tax revenues. Another position points to the massive economic growth in the 1950's when the Republican administration bumped the top rate to 91%. Perhaps Buffet feels this should not be an individual decision. Higher rates might once again benefit everyone..

>>He's a total hypocrite.<< You have previously endorsed a flat tax, but since that has not happened yet do you feel hypocritical claiming your deductions? Of course not. Everyone is entitled to their political opinions for change while still following the law as it currently exists.