jainen

>>an immediate need<< You don't have time to get new IRS approval, which takes a year or so. Talk to the hospital's Foundation about how to structure your fundraising.

>>The large loss was allowed due to large capital gains<< The change in carryback rules did not affect the basic definition of an N.O.L. If the rental loss was already offset on the 1040 by capital gains, there is nothing else to carry back. (If I am misreading your post, please put up some numbers.)

>>None of them earned more than gross income limit of $3500. Therefore, taxpayers provided more than 50% support for all three<< The gross income test is NOT a part of the support test for qualifying relatives. Follow kc's link to do a proper, technical documentation of this relationship, including whether co-habitation is legal in your state. This is a common setup for welfare families and the unemployed, so be sure to look into the possibility of non-taxable sources. Also note that the child can not be your client's qualifying relative if the child's mother has to file a tax return for EIC, stock sales, SE income, pension withdrawal, etc. You must not assume that the grandmother's claim for qualifying relatives is improper. Find out what it is based on. Your analysis is muddied by irrelevant facts like "they did not live with her" and "she filed first."

>>in Sac<< Hey, Joan, I'm right around the corner. I'm at the Doubletree Hotel for several days representing my Elks Lodge at the state convention. It's very un-jainen like, but I'm heading down to the city cemetery first thing in the morning--you have a famous rose garden there.

>>Whenever I get in trouble with my wife(quite often), I just cut one and put it on the table in a vase. Works every time.<< I know what you mean, Tom. I always get in trouble for cutting our roses too. [Dang--this is probably what Catherine means about me twisting the meaning of words.]

>>a bunch of gutless nincompoops see a way to weasel more money out of folks.... But I DO have a problem with name-calling<< I have begun my four-month project to prune and force 65 rosebushes into dormancy, modern and vintage shrub, climber, and tea varieties chosen for performance in mild climates. We prefer repeat blooming over long stems. We also choose fragrance although like many people I am not able to detect the tea scent. (I can't convince DMV that this serious disability deserves handicap license plates.)

>>your position on the AMT is full of logical holes & inconsistencies<< Yeah, I have to agree with you there. But give me a little slack, please, in the pursuit of diversity. It's mighty hard to defend AMT without a bunch of holes, you know, because as KC says it IS a poorly written law. Whether the nominal goal is worthy or not, in practice it certainly does not achieve anything anyone recognizes as reasonable or fair. Too complicated, for one thing, which is a weird thing to have to say about a flat tax compared to a progressive tax! It doesn't fit into any reliable planning scheme, so the common term "hit" is very appropriate. But these points should lend substance to the discussion, not break it down into sound bytes and rhetoric. I just hate the concept of "middle class" in taxation. I stand by my characterization of it as Marxism, the antipathy of economic mobility. The closing years of each of the past two administrations, Democrat and Republican alike, showed that nobody is secure in an economic position. And nobody is stuck, either. A big part of AMT is the credit, a sort of income averaging, which I think is a good thing (albeit backwards). Commentary on that is pretty subdued when it exists at all. I guess it isn't disturbing enough for selling headlines.

>>California has not generally conformed to any federal provisions enacted after December 31, 2004<< Fortunately, California has automatic conformity at least for most retirement issues, so for example when IRA limits change we no longer have to calculate a separate basis. One of the most damaging non-conformity problems is when a hostile divorce produces a decree that says one parent gets the child's exemption. The custodial parent can ignore that for federal purposes but the non-custodial parent gets the dependent on the state return.

>>alter or delete that last sentence. jainen doesn't need me to defend him, but I think diversity of opinion is what makes this forum unique<< Thanks, JohnH. The title of this thread is "...to provoke thoughts." Presumably kc wanted the thoughts provoked to be on the topics in the article, rather than ad hominem attacks on forum members. My post was pretty harsh but I tried to talk only about the qualities of different tax opinions. I did use names, but only to identify those opinions. Still, Catherine is factual in reminding us that I was banned from another forum. It happened during a discussion of the political implications of tax policy, like this one. So far, the ATX Community has been more tolerant of diversity. (The other forum was connected with a tax research product that you may find similarly narrow-minded.)

>>you think that I am making Marxist arguments<< Well, I certainly don't believe you are a Marxist, Catherine. But you are explaining your tax position in Marxist terms of economic class. Since you studied Marx, you know that he was an economist. (Later his views were applied politically by others to increase central control, but as you point out yourself, capitalism has been plagued by the same kind of central political control.) If you object to "the disincentive to strive and achieve," how can you say the problem with AMT is that it should not deny deductions unless someone works hard and earns more than some calculated amount? Indexed, no less, so even if income goes up one can never join the ranks of the "rich folks." I'm not saying that's what Marx advocated--that's what he said was WRONG with capitalism. He was lying, as indeed you point out--the Founders wanted a land of freedom and opportunity without such class distinctions (at least for white males). But our financial press has drummed this Marxist language into our daily conversation--that our system is and should be based on economic class lines. Think about it.

>>I have recommended that we follow these policies. << Never mind the employees' individual tax situation. Think about what the church needs to protect itself. The trusting environment of a church makes it vulnerable to misuse of church property, which can sometimes raise issues of liability and control. Talk to your insurance agent about it. Pay the employees enough to buy their own phones and computers, then back up the data regularly. Be even more rigorous in your policy for volunteers.

>>Are there any credits for new energy efficent boiler for 2009? << Possibly, but some models are NOT eligible even though they meet Energy Star standards. Furthermore, it must be installed in your principal residence, and the $1500 maximum applies to total energy improvements in your lifetime, including for example previous windows or insulation.

>>sell back at a profit<< If the sister can not afford it, it might be worthwhile for your client to secure the name on her behalf. In my opinion, however, profiting from a family member's financial problems is never a good investment.

>>arguing for a flat tax<< Not at all. I believe that anyone who earns more than me (or rather, more than my wife) should naturally carry lazy net-surfers such as I. That's what make America great! However, I am irritated at the shallow, insincere and inconsistent arguments against AMT. Does Catherine, who prefers a national sales tax, really believe that economic class should determine who pays taxes? 'Cause that's what she says. Kc, of all people, makes the same Marxist argument! John says we shouldn't even notice that property rights include the right to avoid income tax. Frankly, because of previous things these members have posted, I don't think they have really thought through the implications of such cliche arguments popularized by a muckraking press.

>>information is free on the internet<< You get what you pay for. I almost always start with Quickfinder, which cites code sections and rulings. Then I pop into RIA Checkpoint for complete text and tons of commentary and analysis, with an awesome search engine. Daily news, too, plus calculators, practice aids, even a very robust capital changes module.

>>make sure you understand the entire detail tax situation<< ...which you will never accomplish trading forum posts with jainen. Everything he says is a what if an' it ain't gonna work.

>>the gutless weasels in Washington don't have the testicular fortitude<< As I said, you have a reasonable political opinion. Can't you express it in ordinary language that addresses the merits of the issue rather than inflammatory ad hominem attacks on people who have a different opinion? As YOU said, AMT is indeed indexed for inflation and has been for years. What you call a temporary finger in the dike has exactly the same desired effect as any other implementation, and it is more honest because the fiscal impact is not projected into an indefinite future. As we both said, indexing the exemption maintains the system of assessing taxes according to economic class.

>>in whose universe should property taxes and state income taxes be considered "special tax breaks" ? << Property taxes -- Renters, a third of all taxpayers State income taxes -- Residents of Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming, a fifth of all taxpayers. Plus pretty much all low income taxpayers in every state.

>>it's lack of indexing<< It is not the tax itself that people want indexed, but the exemption from tax. The only justification for such an exemption is the idea of progressive tax rates, that there is some income level that should be hit harder than others. That is reasonable as a political theory, but is obviously not fair in the sense of everyone being treated equally under the law. AMT is fundamentally a flat tax, which says you can't avoid a fair share by claiming special tax breaks. If you have never heard anyone speak in favor of a flat tax, you are not paying attention. Although the financial press likes to rail against AMT, Congressional studies and action continue to support it as a fair compromise.

>>Well Jainen, you old son of a gun, you never cease to amaze me<< Welcome back, OldJack! I have truly missed you. Almost everybody takes me so literally and either agrees or disagrees. You are one of the few who never believes anything I say anyway, even when you agree or disagree with it.

>>Are you saying that the AMT is not Draconian? << No, I'm trying to AVOID such inflammatory language so the facts can be understood. And in my understanding, a flat tax like AMT is generally considered reasonable and fair. Some people reject it in whole or in part because of political opinions about social services or income levels, but kc I have seen you post many times that such considerations are best left out of the simple equations for raising revenue.

>>if there is a loophole in tax matter, it should be corrected by the tax law<< Now, that's just a political opinion so you are welcome to it. But your next sentence violates ethics code and law. Your last scenario only works if the taxpayer doesn't get caught, and that is not "a loophole."

>>the most draconian of all taxes<< Such hyperbole about this long-accepted principle damages the author's credibility. There are dozens of common techniques for avoiding the limitations on writing off personal activities, but this guy apparently gets paid to just rant so he doesn't care to mention any of that.

>>I found so far is yes<< So why are you still wondering? Did you find incomplete explanations, conflicting answers, undocumented sources, an incalcitrant client, or other unreliable elements? All the things you mention are such trivial tasks, you could have done them all before noon today.

From Spidell's California Taxletter comes this advice about Reasonable Cause for waiving penalties. These are things Franchise Tax Board will consider IN ADDITION to whatever specific circumstances are cited by the taxpayer. 1) The manner in which the facts are presented (Did the taxpayer change the story along the way?) 2) Consistency of the taxpayer's statement and documentation provided (Do hospital record dates coincide with the taxpayer's statement?) 3) Accuracy of the taxpayer's statement based on FTB records 4) Completeness of the information provided (Many taxpayers provide only sketchy, unsubstantiated information and lose their cases.) 5) Time frame of the events. 6) Options available to the taxpayer (For example, if one spouse was in the hospital for an extended period, why didn't the other spouse file?) 7) Taxpayer's actions after the event or occurrence 8) The account history of the taxpayer (Habitual nonfilers will have a more difficult time proving reasonable cause.)