Kea

Client was a partner in a business but had a falling out with other partners. He has not been able to get a K-1 from them & now they won't return his calls. Can he just estimate the income? Or, what other options does he have if he can't get the K-1? Thanks.

First, I will admit that these 2 returns are late. I forgot that the extension was only until 9/15. Anyway, now I have to finally wrap these up. I seem to keep going in circles, but I think I finally understand. Please let me know if I finally "got it." On decedent's final 1040, I report the full amount on the 1099 (int, div, etc). I back out everything that was not actually received before DOD. If it was accrued before DOD, but not received (IRD), it goes to the 1041. If it was accrued and received after DOD it goes to the 1041 only if the property was held separately or Ten Com. Otherwise, it goes to the joint owner's / TOD's 1040. If it goes to the 1041, then no 1099 nominee reporting is required. But for the amounts that go to the TOD or joint owner, I should nominee it out? Is there a way to show 2 different recipients in ATX? Should I show the adjustments for each account or just combine the amounts? Say there are 7 1099s from various accounts. Can I add 1 line showing the amount to go to the 1041 & a 2nd line to show the amount going to another person? Thanks so much.

I'm not sure about Virginia, but for US there is no more step up to date of death (or 6 month alternative). There is some kind of overall (whole estate) one million dollar (?) step-up, but I'm not sure the details of how that works. The basis is now the same as it was for the decedent. Won't that be fun to determine! It is my understanding that this method stays for future years even when (if) the estate tax cut-off returns to $1 million for 2011.

I am also using My Fax. I started using pFax a few years ago, but it was bought by My Fax. It also delivers straight to e-mail, so I don't have to waste paper on junk faxes or duplicates or anything else. The best part is I don't have to hear a phone ring in the middle of the night!!

I just loaded ATX 2008 & 2009 on a Mac running Windows 7 Pro (64 bit) through Parallels emulation software. I got a "path not found" error when installing and called support. She said that 2009 is compatible with 64 bit but older versions are not. She suggested running the older programs in compatibility mode. You can use XP service pack 3 for 2008 but may want to use an older compatibility mode for prior years. The first step she had me do was turn off user controls. I know my problem was different, but I hope those suggestions might help. (FYI, to step that let me install was to copy the installer CD to the desktop and install from there.) I just did this last night and have not done much testing yet. I will watch out for the problems you mentioned. Good luck!

You may want to call ATX again. I have never had a problem getting an old access code even when I didn't use the software that year. I've been with TRX for 3 years and ATX send out 2007 to all prior users trying to get us to renew. I went with TRX's ATX for 2009 & they sent 2008 for practice. When I converted to a new computer (Windows 7 32 bit), I couldn't use 07 Intellitax or 08 TaxWise. I called ATX and got the codes without any problem. (I don't remember if I got the 2008 code from TRX or ATX.) They won't give out the current year software code automatically, but it shouldn't be a problem for prior years. If ATX won't give you a code, try TRX. Good luck.

I believe you are correct. I had assumed from the original post that you were referring to an employee who was on strike. I should know better than to assume!

I don't think they qualify for unemployment since the strike would be considered "voluntary." And, depending on the union, the amount they pay could be very small or non-existent. This is why most strikes don't last very long.

Karen, You are correct in your assumptions. The only thing I'm not sure of is if the parent will owe any gift tax. I don't think so, because I believe the cap is $1 million for that -- but I don't remember off the top of my head. The sons don't pay the tax at all. BTW, I love your sig line.

I hope the rest of your recovery continues to go well, and you are pain-free soon.

I didn't read this post until after the announcement was removed. What is (or should) be the announcement? What is new or changing? Thanks

I agree that the motel & rental car are travel expenses - that's where they are on the federal return. But the NM instructions state: "Property the taxpayer rented from others and used for business or farm purposes shall be valued at eight time the net annual rental rate. The net annual rental rate is the annual rent paid by the taxpayer, less any annual rent received by the taxpayer from subrentals of the same property." I think that last sentence means I can just use the rent paid * 8, and not try to extrapolate to the whole year. So, from a NM perspective, there is no OIH in the motel and the rental car is just transportation. No work is conducted in the car. They are business expenses on the Sch C, but maybe they shouldn't be included the property allocation on NM? I'm just not sure how NM would interpret this. And, yes, I know I can deduct the tax paid in 2010 on next year's return.

Basically they are going for percent assets used in NM compared to the total. In the case of rentals (like the OIH in her apartment), they say to use the annual rent * 8. So for the apartment I used the rent (pro-rated to the OIH just like on the OIH form) & multiplied by 8. I used the original price of the assets she is depreciating (per instructions). So, for the total assets, I think I'm OK. But she didn't take any of her assets to NM. She did rent a car and stay in a motel. Since she was only in NM for a few days, this should be a very small percentage of her total assets. I'm thinking it doesn't make sense to use yearly rental cost for the car and motel -- that would be enormous! I would "assume" it should only be the rent she paid during the year. Since this was the full extent of the assets in NM, it seems like the rent paid should be the total. Multiplying by 8 still seems like a stretch since she won't be using these assets again, but NM seems to use this as some kind of rent to ownership conversion. (OK, I can understand this better for the ongoing apartment than for the temporary hotel and rental car. But if that's what they want for a conversion, maybe.) I just can't make the extrapolation out to a year for the apartment and rental car make sense. That just gives way too much weight to the NM "assets." I hope that clarified my confusion.

25 years on June 1st! It seems like it was just yesterday.

Agreed -- that's why I'm uncomfortable with this. But it also doesn't make sense to extrapolate out a car she only used a few days the same way as apartment that she lives in full time. I don't have a (big) problem with the "* 8" part, but extrapolating out a few days rent to what it would cost to rent for a year seems to really over-weight it compared to what she really owns or rents in NM.

But is this the right way to handle the business property portion? I'm trying to allocate her business property & income for the worksheet. For the personal property line, do I include the value of the hotel & car she rented? If so, I don't think I should extrapolate those out to the annual rent * 8, but just the rent she paid *8. She was only there a few days. Sorry for the long delay on re-asking. I'm currently traveling and this hasn't been a high priority. But my client is ready for me to wrap it up. Thanks.

Thanks for all the help. This is my first non-resident state return for someone self-employed. It just seemed strange that someone could owe a state income tax when there was no profit in that state. But it sounds like I am doing this correctly after all. At least it's only $2.

Unless I'm missing something from the NM instructions (which is what I'm hoping for), there is no place to account for expenses (NM / worldwide).

My client is a singer and had a concert job in New Mexico. Her travel & other expenses exceeded her income. I'm trying to allocate her business property & income for the worksheet. For the personal property line, do I include the value of the hotel & car she rented? If so, I don't think I should extrapolate those out to the annual rent * 8, but just the rent she paid *8. She was only there a few days. There is no payroll to allocate. Gross receipts is pretty straightforward. However, there seems to be no allocation for NM expenses. It seems strange that after losing money on the NM job, she should owe any NM tax. (OK, with my current estimates, it's only $2, but it just seems to me like it should be $0 since it is a loss.) Any help on the personal property line and advise as to if there is a place to allocate expenses is greatly appreciated. Thanks

More for where to find it. (Although, I did really appreciate the quote part, too. ) The portion of the instructions I looked at just mentioned the amount per category -- ie single, married, HOH. I did not see the part about "...even when claimed as a dependent..." You answered my question perfectly!!

Thanks so much.

I have been doing it as her own return (primarily because I didn't see any way to add it to her parents'). Her only income is this K-1 & some bank interest. I've never done a K-1 on a dependent's return & just wanted to make sure there were no different rules (compared to doing it on a non-dependent return). I also wanted to make sure there was not a separate Oklahoma standard deduction for someone who is a dependent on someone else's return. Thanks.

For the Kaspersky on Windows 7, the program does have to be updated, but you can use your old license. I still had 3 months on my Kaspersky license when I bought my new computer. I bought the 2010 version of Kaspersky (free after rebate) & entered my old license code. When that code expired, I entered the new license. The only issue I has was that my husband's computer had an expiration date that was one day later than the other computer. And he kept getting warnings when using the computer that day. It was fine again the next day. Kaspersky is warning me about a program that is showing keylogger behavior. But it doesn't say what program it is. The date it shows is a few days after I got that computer and I was installing a lot of software that day -- including some of the ATX prior years. Does anyone know if the tax software does anything that emulates keylogger behavior?

How do you put the dependent's K-1 on the parents' return?

Client sent me info for his extension. He mentions that his brother told him that his daughter had $3000 in investment income for 2009. I figure this would be kiddie tax area. Then he sends me the K-1 for the 17 year old daughter. It's an irrevocable trust that paid $3509 in Ordinary Business Income. Also includes OK K-1. From what I see, I file the federal K-1 for the daughter the same as any K-1. Her standard deduction is limited to $950, but everything else proceeds normally. (Right?) For OK, I don't see any reduction for the standard deduction for being a dependent. Is that true? Since her OK income is over $1000, it has to be filed, but with no tax due. I just want to make sure I'm not missing some "exceptions." Thanks!