Gail in Virginia

I agree.

I think you are on the right track - it is a business rather than a farm, but a barn is an agricultural building.

Actually the attorney should have issued a 1099-S, Proceeds from Real Estate Transactions, for this event. Unless the attorney had some reason to think that this was a personal residence sale, they should have issued the 1099. The fact that the Sch. C results in more taxes is not the reason to rule it out. You need to look at the facts and circumstances surrounding this transaction. Jainen has a point, although I think most of us would have put this on a Sch. D without much thought, and I think that Jainen's point is that we do need to think about everything related to the transaction when we prepare a return.

If she contributed nothing, then she has no basis, and yes the payments would all be taxable.

Has she received all of the disability payments she is going to receive yet? Or will she get more this year? How much is she entitled to or is it a matter of how long she is disabled that determines how long she receives payments? It appears from the information above likely that she has a basis in her disability payouts of $5,108. Since she has a basis, the payments may or may not be taxable. Since she got this on a 1099 instead of a W-2, I am inclined to think that the basis is applied to the payments. But without knowing more about her disability insurance plan, I really can't say for sure.

I am assuming that the employee is to buy the gas for the vehicle, and then take employee business expense for the miles driven? Pacun is right that commuting miles are never deductible. Does the employee go to more than one job site in a day? If so, he might be able to take a percentage of the gas based on the miles driven between job sites versus the total miles driven for commuting and personal. I would hesitate to take mileage because normally that includes depreciation, repairs and other expenses. I am not sure mileage is even available since the employee does not own the vehicle, but after removing commuting miles from the equation is it even worth it?

One of my favorite clients had his 80-something year old mother call to let us know that he had put his tax information in the grill on our patio one year when the office was still in the house. Gotta love 'em. By the way, it was April 15 when he did that.

I have not noticed for a couple of days - and around it here it has been changing almost every day, sometimes two times in one day. But the last I remember it was 3.659 for regular. I drive a Chevy Impala and get about 24 miles to the gallon.

According to Acronym Geek, it stands for "Doggies Do not Track Bigfoot". I personally find that hard to believe. And not very helpful.

In Virginia, there is a rebate program available through the state department of mines, minerals and energy. Different appliances result in different amounts of credit, and I believe the program is funded through federal money so I think that other states have similar programs although I am not sure of that. The link for information about Virginia's programs is My link I found it by googling Virginia energy rebate, I think. Hope this helps.

Terry, that is all I have ever done to notify the IRS that a partnership is closed.

Amen!

My heart goes out to you both, losing a companion at this season of the year. Our pets give so much to us, and ask for so little in return. They are such a blessing and it is so hard to make the decision to end their suffering; it is equally hard to lose them unexpectedly for whatever reason. I have done both, and I feel sure I will again because I just cannot imagine a life without the love and companionship pets offer.

Just a thought, but one possible reason that the amount awarded was larger than a simple refund of the amount that he was paid might be that it was based on what the second roofer billed to correct whatever issues he found with the first roofers work. And that would not be considered punitive, but compensatory. Not saying, just guessing at possibilities.

If I understand you correctly, their IRA's have invested in the partnerships. Generally speaking, IRA investment income does not have to be reported on an individual's tax return.

If he could be claimed as a dependent on someone else's return, I am not sure he qualifies for the refundable credit.

Thanks for posting that, Pacun. I have been having this argument with a client for a couple of years now, and this might just help. I don't what will explain it to the truck driver that just left that thought he should be able to deduct his blue jeans, because he only wore them to drive the truck. However, he had a pair of them on in my office, and he had not been working today....

After a Monday like today, McDonald's looks pretty good to me.

Myrtle Beach in July, but I am still hoping for something fun earlier - even if only a long weekend.

Client is sending his daughter to William and Mary, an inexpensive (!) little school here in Virginia. He withdrew funds from his IRA to help pay the expenses associated. Of course he is not 59 1/2. If he uses the exception for education expenses on his IRA withdrawal to avoid the penalty on part of the funds, can he still take the American Opportunity Credit for tuition and books he paid for? The IRA withdrawal is greater than the costs of her education that can be deducted, but of course they have hotel bills, and restaurant bills, and dorm fees and meal plans,etc. that he thought would be deductible because they were part of what it cost to get her to the college and keep her there. Basically, my question boils down to: Is it considered double dipping to use the same tuition expense for the American Opportunity Credit and to avoid the penalty on an early withdrawal from and IRA?

Good to know. Thanks, KC!

Yes, you are. There are so many variables involved - what will tax rates be? what will be deductible? what will their income be? All of these things affect how much this will cost them in the future. You can tell them what their taxes will be this year if they don't split it. You can even use the planner to make an educated guess, assuming that there are no major tax changes in the next two years and no major changes in their situation, about what it will cost them over two years. But unless you have a better crystal ball than I do, you can't be sure that your assumptions are correct and therefore you can't be sure that the projected taxes are correct. Take your best guess, client. :dunno:

Yes, re-characterizing it is the same as if he/she withdrew it and then contributed it for 2011. Bur remember, they have to withdraw the excess contribution and any earnings before April 18th. Depending on timing this might result in the earnings being coded as for the previous tax year which would mean they should go on the tax return you are currently preparing not the one next year. At least that is the way I understand that code on the 1099 they will get. That should not apply to Catherine's situation since the contribution was made in 2011. As far as Chowdahead's first question, if his/her modified AGI is 109,000 then he/she exceeds the limit by 4,000 you divide that by the 15,000 spread in the limit and multiply it by the maximum contribution (either 5,000 or 6,000) depending on his age. That will give you the amount the limit is reduced by for this taxpayer. Using your numbers I did not get the same answer when I hurriedly did the computation. BUT the AGI might need to be modified if he deducted student loan interest, foreign earned income, or several other things. Publication 590 has all the details.

I thought the exception codes for medical, education and first time home purchase only applied to IRA distributions. If this was a distribution from a qualified plan, which is what I understood from the language retirement plan, do those exceptions even apply?

One further reminder - points are deductible on the purchase of the home, but if it is a refinance, then they must be amortized over the life of the loan rather than deducted up front. But it sounds like from the original post that this is a purchase.