TAXBILLY

From Pub 590: IRA with basis. If you inherit a traditional IRA from a person who had a basis in the IRA because of nondeductible contributions, that basis remains with the IRA. Unless you are the decedent's spouse and choose to treat the IRA as your own, you cannot combine this basis with any basis you have in your own traditional IRA(s) or any basis in traditional IRA(s) you inherited from other decedents. If you take distributions from both an inherited IRA and your IRA, and each has basis, you must complete separate Forms 8606 to determine the taxable and nontaxable portions of those distributions. taxbilly

Eric: Whatever you decide is fine with me. You've done a fantastic job and we are all appreciative of your effort. taxbilly

Read PartII and I think you will be persuaded to use a calendar year. http://www.irs.gov/pub/irs-pdf/f2553.pdf taxbilly

I would send two checks (one for the tax from your client and one from you for the interest) and the request for abatement (no form, just a statement of mea culpa) in one envelope. That makes it easy for them to just close out the account rather than generate a letter of denial of abatement. taxbilly

This is the very reason why it's good practice to have the client give you the figures. Many clients just want to report the 1099-MISCs that they get rather than the real income. However that won't help now. I would doublecheck the client's expenses for that year to be sure none were missed. I would definitely request an abatement of the penalty and explain that the omission was yours and inadvertent. Don't be too hard on yourself for the error. I once misread a W-2 income of 92,000 which I picked up as 72,000. That was in the days of carbon copy W-2s and I was able to successfully abate the penalty due to the poor quality of the W-2 presented to me. taxbilly

Thanx for the info, Tom. taxbilly

Form 1065, Page 1, Item G. taxbilly

In what state does the client reside? Community property might come into play. taxbilly

They are eligible. They would even be eligible if they owned a principal residence in Canada during the three year period: http://www.irs.gov/newsroom/article/0,,id=206291,00.html taxbilly

Points to ponder: http://www.irs.gov/newsroom/article/0,,id=205331,00.html taxbilly

Can't be a credit because he did not pay the Vietnam tax ... the company did. The $28000 included in his W-2 was not taxed by Vietnam and therefore not being taxed twice. taxbilly

There is nothing to roll over if you are not making the election. taxbilly

I've used this case a few times in audit ... drives the auditor to his/her supervisor for help! http://bulk.resource.org/courts.gov/c/F2/9...27.92-4526.html taxbilly

http://www.latimes.com/news/opinion/la-oe-...inion-rightrail taxbilly

Might be of some help: http://www.irs.gov/newsroom/article/0,,id=206875,00.html taxbilly

May you have many more! taxbilly

May you have many more! taxbilly

Not familiar with the term ordinary business loss. taxbilly

http://www.securian.com/Businesses/services/execbonus.asp taxbilly

Tax Break on New Car Purchases Available in States With No Sales Tax The IRS announced that the tax break for the purchase of new motor vehicles is also available in states such as Alaska, Delaware, Hawaii, Montana, New Hampshire, and Oregon that do not have a state sales tax. Under the American Recovery and Reinvestment Act of 2009, taxpayers who buy a new motor vehicle this year are entitled to deduct state or local sales or excise taxes paid on the purchase. Taxpayers who purchase a new motor vehicle in states that do not have state sales taxes are entitled to deduct other fees or taxes imposed by the state or local government. The fees or taxes that qualify must be assessed on the purchase of the vehicle and must be based on the vehicle’s sales price or as a per unit fee. According to the IRS, Congress intended for these fees or taxes to qualify for this special tax deduction. To qualify for this deduction, the vehicle must be purchased after February 16, 2009, and before January 1, 2010. Taxpayers can claim this special deduction only on their 2009 tax returns to be filed next year. The deduction is limited to the fees or taxes paid on up to $49,500 of the purchase price of a qualified new car, light truck, motor home, or motorcycle. The deduction is phased out for taxpayers whose modified adjusted gross income is between $125,000 and $135,000 ($250,000 and $260,000 for joint filers). taxbilly

They probably pay a fixed amount per month. When I was in the hospital last year my bill was about $180,000 for six weeks and I didn't have insurance. The hospital, if it takes federal money, must consider a request for charity which perhaps your client should look into. They cut my bill in half and I pay them $500/month. taxbilly PS Don't worry about brain power and time this time of year. Most of us are still recovering from the tax season! :~)

Based on the facts presented I don't see what you mean by the affect of bankruptcy. If they agreed to pay the medical bills then those payments would be deductible. taxbilly

Page 3: http://www.irs.gov/pub/irs-pdf/p502.pdf taxbilly

May you have many more! taxbilly

This can be a trust fund violation which has criminal consequences. taxbilly