jainen

>>Just for fun<< Your point is completely serious. The original post asked about liability--collection is another matter. That is the reason for "the point he either missed or ignored in a similar post" [cpabsd's thread on Deceased Taxpayer]. We already knew that bill was only $750, so it is reasonable to assume the taxpayer could ignore the letters and obligations alike.

>>leaves wife 'hanging' with respect to tax liability<< This is another falsehood the preparer is suggesting, beside the fraudulent filing status. Regardless of whether the assets were transferred to the taxpayer as a beneficiary or as an heir, he is required to cover all her tax liability (up to the amount of assets). Same thing if he is acting as personal representative or executor. Filing status is irrelevant to that issue, as is remarrying. He got the money--he owes the tax.

>>Who, if anyone, is responsible to pay this tax? << The executor, administrator, friend, or whoever is handling the decedent's property. One of the principal duties is to pay the taxes first, so if he or she transfers ANY thing of value to heirs the executor would be PERSONALLY liable for the unpaid taxes. The heirs are also PERSONALLY responsible for the taxes to the extent of any value they inherited. For only $750, I wouldn't be surprised if the executor completely forgot to mail the return. Probably assumed it was already efiled by the preparer.

>>the mortgage broker is apparently not willing to do<< There's more mortgage brokers around these days than buyers with a solid down payment.

>>only one of them can be HOH<< Very true. One at a time. My point is that, depending on the circumstances, that is not necessarily the custodial parent. For example, suppose they were all one big happy family until June 30. Then Dad split with the kid while Mom moved to Grandma's. Two months later, she gets her kid back. Mom is custodial parent ten months to eight, but Dad also has the qualifying child (if Mom does not claim tiebreaker rules). So if Dad paid the bills while they lived together he can file HoH. This is a pretty common pattern, you know. In this way the Qualifying Child regs are much more flexible than the old Form 8332 procedure. It's especially nice for the custodial parent--no lawyer bills, and she can wait until October 15 of the next year to decide what she wants!

>>The noncustodial parent will always file single<< Not necessarily. If the child lived with the non-custodial parent for more than half the year (for example, if the family split up late in the year), she might be a qualifying child for the non-custodial parent too.

>>There was NOTHING he had done in those two weeks to qualify him even for nomination<< Well, a nomination is only an alert that he was someone to look at. That was based not on two weeks but on his whole political career and personality, which had just gone through the most searching investigation ANYONE has ever had. He's a trained community organizer, and the world responded favorably as did his own country. Nothing in the first two weeks, are you nuts? Just bucking political tides to leave Bob Gates in the cabinet was a huge step towards peace that opened some very important doors for his diplomacy. Nobody could miss the commitment to hard core military deterrence in that appointment.

>>do you lock the doors of your car, business and home<< Yes, I do. It's worked pretty well so far, but I don't think it would keep me safe from a nuclear bomb.

>>the only logic that makes any sense<< Obama's dark horse campaign electified the world, to be sure. But the laureate was not chosen in February--it was last month after a brilliant head start bringing back international cooperation and diplomacy in the mideast and elsewhere. Measure that by how seriously everyone took his recent proposal for reduction of nuclear arms. Two years ago such an idea from the war-mongering Americans would have seemed ludicrous. Under Obama's leadership, the whole world now believes it might be possible. Well, the whole rest of the world anyway. MY mind is boggled by the response of so many Americans. Hey, our president just received one of the most prestigious honors imaginable, and we pooh-pooh it as unworthy and denigrate our own elected representative. It seems to me the ultra-conservative mainstream media has thrown aside patriotism for cheap political potshots.

>>Should we go back and amend the 2006 to use some of the 2007 FTC then carry forward and amend the 2007 to carryback the 2008 unused tax then carryforward or can we just carryforward the unused 2007 foreign to 2008 and carryforward all of 2008 unused foreign tax<< Slow down and take a breath. You have to take it back before you can take it forward. Generally it's best to claim credits, unless you are in a hurry to let the statute of limitations run out.

>>you can't leave a "0" sch c in a return and efile<< Sure you can. Just set up the return to carry over, then make a copy that you adjust for the current e-file.

>>a college student, no longer a minor<< "Custody" rules can only be used when the parent has custodial rights under state law, so they do not apply after a child is emancipated or reaches the age of majority. An adult student can be a qualifying child if she is considered to be temporarily out of the home during school, and the exemption and filing status can be determined accordingly, but the one parent who maintains that home can not release the exemption to the other (unless the tiebreaker rules are available for a qualifying child of both parents). If the student has established a separate home, the parent who provides more than half the support can claim her under the qualifying relative rules.

>>Having good intentions & making people feel hopeful are enough.<< That's right. A chemist set up the prize out of guilt for unleashing dynamite on the world. Unlike the other Nobel categories that recognize accomplishments, the Peace prize can be given to people in the process of resolving conflict, so the award actually helps create the peace it honors. Those who bring political controversy to the discussion shame Alfred Nobel's intentions.

>>I don't know if it would cause any other problem<< Doesn't ATX allow you to make a backup copy of any one file? I use different software, but routinely create dummy files for planning and testing. Another way that might work is to leave the Schedule C in place but with no income/expense numbers, overriding the current depreciation to zero on each asset. If you can do that, everything will already be set up for 2009 with no further entries.

>>already identified 2 properties to purchases<< She can only change the identified properties if she is still within the 45 day period. 1031 is pretty flexible, though. It's okay to add money or mortgage to the deal to acquire multiple properties. I would just recommend she not get TOO creative, like keeping her son as a partial owner or paying more than FMV, but if the property is suitable to hold as a rental she should go for it.

>>under what circumstances soc sec & medicare taxes varies for employee and employer<< I can think of several reasons. Of course there may be an error, so you should do typical accounting analysis to see if a number was transposed or entered twice or rounding errors or whatever. Determine if the variation is across the board or limited to a single employee, and whether it occurred in earlier quarters. Then consider the nature of the earnings. Perhaps there was some non-subject benefits that were coded incorrectly in the employer column. Or maybe tips were reported that the employer could not withhold from. I mean, there are plenty of possibilities, so mark your billable start time and get to work!

>>S Corp was reporting on installment sale and showing this on K-1's<< How's that work? Did the corporation sell itself? Liquidating? How did the sales agreement define "all assets"? >>Subsequent outside audit of S-Corp turned up about 10k of equipment,supplies, ect along with interest that somehow never made it to the S-Corp books<< How's that work? Who was auditing and why? Weren't supplies etc. already expensed? What kind of an asset is interest? >>correct the installment sales basis<< How's that work? Having reported the installment basis for three years, they have established an "accounting method" that can't be changed without IRS consent. I would suggest that you don't want to bring any of this to the attention of the IRS. Especially if the "stated price" covers depreciation to be recaptured, inventory, or other assets not eligible for capital gain treatment.

>>Clearly he thinks his client should avoid tax on it<< I understand what Edward thinks. But he doesn't mention what his CLIENT thinks. Or what his client was thinking when he signed the settlement agreement.

>>Which, no doubt, led to the shopping for a new person to do his work<< That's what it sounds like to me. This was no oversight or miscommunication or an accountant who can't read. The client knew perfectly well what the problem was, and went to all the trouble to form a separate corporation. Even an incompetent CPA would have been less obvious, simply avoiding full-time employees or something. The client didn't tell his accountant what he did until September 15, when the extension ran out and it was time to fund the plan. The accountant told him to go jump in a lake. I must admit that I am too busy for a client like that too.

>>he's got a good malpractice claim against his attorney<< I don't understand why it has become fashionable for tax professionals to say things like "they should go from the trustee of the plan to her, based on a QDRO." How do we know what the issues in the divorce were? The way the pension is to be split is simply one of the negotiable terms of settlement. You might not even want a QDRO, if for example the spouse is in a higher tax bracket and can make a concession about something else. Sure, sometimes a lawyer might fail to consider the after-tax effect, but there is nothing in the original post to suggest that at all. It doesn't even say the client expects to avoid tax. Report the pension income as shown on the 1099, and determine whether or not the $6000 counts for alimony.

>>I just wanted to confirm that the previous accountant's strategy was wrong and in violation of IRS rules.<< First you should confirm that it was in fact the accountant's strategy. I can't quite explain it, but at least to me there is something about this scenario that suggests otherwise.

>>my First Born Child<< Perhaps I judged them too hastily. I'll have to take another look at this opportunity.

>>at different times<< I'm worried that I don't have different times this close to October 15. It's hard enough just dealing with different locations.

>>Clients don't purchase anything from the Internet<< Presumably the state Board of Equalization will begin reviewing these reports, so your clients should prepare for that. Remind them to be rigorous about SEPARATE checking and credit card accounts for business and personal, set up clear records for buying supplies and new equipment, and other normal audit protection procedures. Also, since they are going to have to file use tax reports anyway, they might take a new look at Internet vendors. Use tax is the same rate as the sales tax they already pay, and in some cases product choices and discounts are VERY impressive.

My clients separated this year but agree to MFJ for '08 because the total tax is higher when they split community income (and to avoid conflict of interest for me). Can't really get them together for signatures, though. How about separate Forms 8879 on a joint return?