jainen

>>TP wants for the IRS to take the money owed to them from the property<< IRS generally doesn't like to that, for a number of good reasons. They might release their lien to allow a short sale, however, especially if the taxpayer owns other real estate. Tell the Realtor to work it out with Title Officer, or nobody will make any money on the sale at all.

>>elementary school teachers weren't very sure about it themselves<< Well, nobody is very sure about English grammar. Is it Germanic? Is it from one or more Romance language? What sentence structure did William the Conqueror pick up from his Saxon concubine? What did the Mandinko warriors have to say? Did you know that the ancient Aztec language N'ahuatl is widely spoken as a native tongue in America today, with important effects? I STILL diagram sentences--it's the only way to get the appositive right.

>>is there any other way or arguement to avoid the SE tax?<< Yes, you can argue that the client is not in a trade or business but is simply helping a relative. Address the level of compensation, presumably including room & board, which suggests a profit motive unless there is some other means of support. There is precedent for this position in the tax court Alternatively you could argue that the client is a household employee subject to employer-paid FICA rather than SE tax. Either way, be sure to follow instructions exactly in replying to the IRS letter. I recommend you attach documentation of your position, as well as an explanation.

>>Using a word such as "rapacious" is a obfuscacious manner of writing and not at all elucidative.<< In my opinion, that word is highly elucidative. It colors the entire argument with hyperbole, because rapacious doesn't just mean greedy, it means excessively greedy with a sense of preying on others. Another manipulative expression used in the article is "rammed through Congress," suggesting that the vote was forced before anyone had a chance to read the bill and raise objections, a totally specious position within the whole political scree linked here as an "update.".

>>I don't see much difference<< The difference is (or at least may be) that chiropractors are licensed medical practitioners treating generally recognized medical conditions. A masseuse usually is not a medical practitioner, and fibromyalgia is not a generally recognized medical condition. (That is, fibromyalgia is not widely accepted as a disease since there is no technical definition, no physical abnormalities or consistent set of symptoms, no objective tests for diagnosis, and even doctors who believe in it have no broad agreement on how to treat it. Massage is not a common therapy for fibromyalgia, and rarely used as long-term treatment for ANY condition.) Nevertheless, I don't make medical decisions so if the doctor's "prescription" is reasonably current and the treatment occurs in a somewhat health or fitness setting, I wouldn't question it further. If he last saw the doctor in 2006 and the receipts are all from Friday nights at the tattoo parlor, I would consider it not such a strong claim.

>>Where did you get the "idea" that the client's numbers were unsupported?<< I got that idea from your statement, "I was just going to prepare a balance sheet." From that I jumped to the idea that the tax return had already been filed before the balance sheet was prepared. In my practice, "supported" and "documented" have similar meanings.

>>an attempt to raise revenue for an increasingly rapacious Congress<< Can anyone explain to me how this "rapacious" provision could raise revenue not otherwise due anyway? In my opinion, it simply uses the power of computers to make sure honest taxpayers don't have to pay more than their fair share.

>>Thanks so much.<< You are welcome. But are you thanking me for putting something in quotes, or for telling you where you can find it yourself?

>>get some work done<< Please let us know if IRS is satisfied with the worksheet, or wants specific proof like bank statements and appraisals. Hmmm, for that matter, let us know if YOU are satisfied with the client's unsupported numbers!

>>Is there a specific "format" for the balance sheet that the IRS wants to see to prove insolvency?<< According to the instructions to the form you say was used, "For details and a worksheet to help calculate insolvency, see Pub. 4681."

>>make sure there was not a separate Oklahoma standard deduction for someone who is a dependent<< The applicable standard deduction amounts are printed right on the NR form itself. The instructions for the resident return spell it out even further, "Note: You qualify for the Oklahoma standard deduction even when claimed as a dependent on another return."

>>I got a spanking<< I guess someone was very sensitive about the joke for some reason. Well, kc hasn't removed it and she's about as straight as can be on Internet etiquette, so don't feel too bad. Generally this forum has been pretty tolerant of various professional styles and making light thereof. Aren't we supposed to be trying to relax now after the 15th? By the way, while I appreciate your texting acronym, may I say it has been used in other contexts that give it a connotation not consistent with the rest of your on-screen personality.

>>How do you put the dependent's K-1 on the parents' return? << You don't. The child must file a separate return unless her income is exclusively from interest, dividends, and capital gain distributions.

>>I just offended someone on here<< I have rather high standards in that regard, Rita, so I can't imagine anyone being offended by your gentle humor. But I went to profile and signed up as your friend out of solidarity. * * * * * I always planned to hand out pencils that said, "Filing the tax return is just our opening offer." But I would have had to raise my rates fifty cents, and I was afraid my clients wouldn't think I was worth it.

>>reporting it as an installment payment<< Yes, according to Pub 537 the sale of an installment obligation is treated as a payment on principal with gain or loss calculated from the basis of the note. But for this sale of only part of the note, you now have a situation in which the original gross profit percentage may overstate the actual gain, both in 2009 and in the future. So perhaps this should be considered a reduction in sales price with the percentage recalculated. I think this requires additional research. It is not TOO weird or unusual, so I would guess some authoritative guidance is available somewhere. Overall, the series of transactions is unusual enough to call for detail review of the documentation. I would want to make sure there are no issues of related parties, side agreements, below-market pricing, and so on.

>>a bill that will remove cell phones from listed property category<< In my opinion, Congress looking at deductions for the business use of cell phones is not likely to benefit my clients.

>>$3509 in Ordinary Business Income<< As she is not conducting the business, earnings from this passive activity are considered investment income for purposes of kiddie tax.

>>copy these backups to an external disc<< Two or three discs, so you can have a friend or relative stash them away off-site.

>>2. Nothing sucks more than that moment during an argument when you realize you're wrong.<< In my opinion, it's your own fault if this happens DURING an argument. I find it a lot more fun when I am aware of it BEFORE I get into the argument.

>>I have never had a problem with Nortons<< I stuck with Norton for years because I loved the DOS versions. But it flat out interferes with all sorts of programs. I finally let it expire a year ago and it STILL interferes, and gives me a popup warning seven times a day. Yeah, I just keep closing it, which tells you how rigorous I am about keeping things clean and updated. But in that year I've only picked up a few nasties, and just deleted them myself with the uninstaller built into Windows. My tax software, Proseries, stays flawlessly stable even on my old clunker, a Pentium 4 with 512K RAM running the 2002 version of Windows XP Home, so I don't care much about anything else. Like Communists and Muslims, I think virus threats are overrated. I have far more risk of hardware failure.

>>just keep farming 'till I lost it all.<< In my opinion this thread is not about farming. It is about investing.

>>That is a non recourse loan<< Not necessarily. For some reasons a lot of finance companies haven't figured out how to use the form. (Well, these ARE the same idiots who made the basically unsecured loans to deadbeats in the first place!) Sometimes they will issue a 1099-C just out of spite for a borrower who stiffed them on a non-recourse loan. Other times they misinterpret "personally liable" because the debt was cancelled. Generally I would expect a mortgage on rental property to be a recourse loan, which is consistent with using Form 1099-C even if Box 5 is wrong.

>>Use the amount of debt forgiven as the sales price<< Apparently the repossession covered the balance due in full, so even though an auto loan is recourse there was no 1099-C for cancellation of debt. In my opinion the amount realized on disposition is $8389, the lower of debt or FMV. As I read Eli's two posts, the truck was converted to 100% personal use in 2007 or 2008 (possibly requiring Section 179 recapture), and abandoned in 2009. Eli will have to look at the prior year returns to determine adjusted basis (perhaps calculating the depreciation factor in the standard mileage allowance taken). The taxpayer will have a taxable gain or non-deductible loss in 2009 (possibly with recapture of Section 1245 or bonus depreciation).

>>Did your priest opt out of the SS system?<< Catholics can not opt out because opposition to public insurance is not one of the tenets of their faith. However, members of certain Catholic orders have taken a vow of poverty, which under another provision exempts them from SE tax.

>>Maybe not a 'good student'<< Kids are almost never held back for academic reasons any more. But it is very common to wait until after the fifth birthday for children to be ready for kindergarten, so children born late in the year would still be in high school at age 18. And it's not especially rare if along the way a year was missed or repeated because of illness or family disruption.