Kea

I believe you are correct. However, you may be able to take a few months of living expenses up until the point when the job location was no longer deemed "temporary."

Thanks to everyone! I appreciate the reassurances.

Thanks. I knew the travel counted just wasn't sure if the meals part did. Just wanted to make sure this wasn't one of the cases where the IRS said "you have to eat, anyway."

I have a client that rents out her old house in a different state. She spent a few days there to take care of a few issues. Can she take a meal allowance as a travel expense (@ 50%)? I know she could for a self employed business, but I'm not sure if rentals are treated the same way. All my other clients with rentals live in the same city as their rental. Thanks.

Thanks!

Help???

KC, I was thinking about your comment some more yesterday and finally remembered that their address is on the form for the foreign tax credit (don't remember form # and I'm not on my "work" computer). I saw US client Saturday and told him about the new regulations. I think it is still fine to send through e-mail via US client. He had already told me that the Colombian friend requested the October extension. It looks like I may only be doing two more returns for the guy in Colombia. He's decided he really doesn't want to spend any more time in the US and may turn in his visa in a few months. His wife does want to move to the US but she is a housewife and does not have any income. (I'm not sure how that will work out. Personally I prefer to live in the same country with my husband.) Thanks for the help.

Actually, I don't have his address. They use the US friend's address on the tax return. There are no "W-2"s in Colombia. I get a copy of the Colombia return as a spreadsheet. When I have questions I ask the US client and if he doesn't know the answer he contacts the Colombian friend and then gets back to me. It's interesting to see another country's tax form. But it is weird to have a client you can't contact. It kinda seems implied that the Colombian guy authorizes the US friend to discuss the tax return since he gives him all the info to give to me. The US guy has been a client of mine for almost 10 years and I've known the guy that referred him to me for about 20 years. So I know him well enough to trust him. I don't know of any reason he would want to illegally file a return for someone in Colombia - especially since there is usually an amount due - no US withholding. I guess I'll just send it through the US client.

I have a client that started bringing me their friend's tax info 2 years ago. The referral lives in Colombia and has a US green card. The referral sends all their stuff to the friend in the US. That person brings their own info and the info for the guy in Colombia. I know I really shouldn't discuss the return with the US client but I don't have any way of contacting the guy in Colombia. Even if I had contact info, my Spanish is not very good. With the new stricter disclosure rules, I should get the guy in Colombia to sign some kind of form that authorizes me to discuss his info with the US friend. But that would still just go through the friend to get that - so it almost seems useless. Besides, the guy wouldn't be sending the info to his friend in the US if he didn't want his help. (The guy in Colombia was doing his own tax return until he got a letter from the IRS because he took the foreign credit against all income not just wage income. But the bill the IRS sent him was wrong, too. I started with his amendment.) How should I handle the disclosure requirement? Just print a statement for the US client to send to the friend in Colombia and then send back to me? Print in English and Spanish? Thanks

I just want to make sure I am reading Quickfinders correctly before I call my client. Client asked me if he could claim his dad as a dependent since he spent so much last year. Dad has very little income - mainly Social Security but he does have a rental house. Since the gross income from the rental was over $3500, I told him he couldn't (interesting that IRS only counts "gross" income with rentals). Anyway, I was reviewing the "Observation" on page 5-2 in Quickfinders. It states that the $3500 income test does not apply when determining if the taxpayer can deduct medical expenses for the parent. Client stayed with Dad in Dad's house for a few months to care for him. (They did not live in taxpayer's home - but that shouldn't matter?) Then Dad moved into nursing home for a few months before passing away in December. Taxpayer paid in excess of $21K in medical bills. So before I have the client calculate how much support Dad provided for himself (including FMV of rental of his own home, before moving to nursing home), I just want to make sure I'm meeting all the tests to qualify for deducting medical expenses. Residency test does not apply to parents (at least not for dependency). Dad was unmarried in 2008 (widower) Dad was a US citizen Dad was not a qualifying child for anyone Gross income test does not apply for medical expenses for parent So, all I need to verify is providing over 1/2 the total support? Am I missing any other tests? Thanks

The way they do it is the same way they've been offering Intellitax and TaxWise at $299 - bulk purchasing. When they buy several thousand copies of a program they get a better price and pass (some of) the savings on to us.

I used ATX in 2006 and Intellitax in 2007. The conversion from ATX to Intellitax caused lots of depreciation issues. The main issue I've seen with this last conversion is 8801 mysteriously showing up - and sometimes with figures. In one case a $40 ATM credit showed up for a client that has never be subject to AMT. You always have to watch all rollovers and conversions.

I like that suggestion. Thanks!

Maybe I'm just getting more forgetful, but a reminder to enter bank info for direct deposits would be nice. I've missed 2 this year so far. I don't remember having that problem before.

In the year of the NOL there is only one NOL (I think). Bat we are referring to is the year of the carryback (or carryforward). The NOL is an AMT adjustment. So the new tax has to be calculated regularly and AMT. (I'm glad I took that NOL update class last December!) Hope that helps.

I'll let him know not to worry about it. But for my own general knowledge - what are the documentation rules? If IRS were to ever question why a gift tax wasn't filed, is it sufficient to just explain why a gift over $13K is from 2 people or do you really have to dot all your "i's" and cross all your "t's"? If the gift wasn't a car but a check for the $16K - how would that change the picture? Say everything else is the same. Bank account is still in deceased's name. OK for check to come from that account? Decedent files gift tax return, or the estate? Or, should check go to the son (who deposits it in joint account with wife) and then write check to the aunt? Or, does there need to be 2 checks - one from son and one from wife? I just want to make sure I understand the documentation rules. I know the general rules and I know how to file the gift tax return. Thanks

I think we are going to see more NOLs (and unemployment compensation) this season and maybe next. I've been doing taxes 12 years and had done NOLs for 2 previous clients. So far this year, I've already got 2 more -- one a new client with a carry forward from last year, and the 2nd is the one mentioned in an earlier post. I may be getting another - a friend of mine does her own taxes, but had an NOL on last year's return (2007) and wants me to do that part for her. I guess NAPT had good timing when they offered an NOL refresher with their 1040 update class last year.

I'm not doing a 1040X. I'm just checking the calculations in the old software. There have been a few minor discrepancies between the 2008's 1045 and the 2006's 1040 (after NOL). The NOL is used up in 2006 so I don't need to carry forward again. The reason I mentioned the other years is that we now have a choice of carrying back the NOL 3. 4, or 5 years (as of last Tuesday). I will check the other years to see which one helps her the most. I'm not sure how long it will take the software to get updated with these options.

I have the same situation. When I carry the NOL back to 2006, it kicks in a big AMT. When I get a chance, I will check it against 2004 & 2003. I thought 2006 would be the best because they were in a higher tax bracket that year (lay off and severance pay). But perhaps a different year will work out better. I'm doing the 1045 in the 2008 software, but I'm doing the calculations (esp AMT) in the prior years' software. Good luck!

Client is only child and Dad left everything to the son. It is my understanding that nothing has gone through probate (or if it needs to). Title and insurance are still in Dad's name. The value of the car is what the client told me. I think he got it from a friend who works at a dealership. I'm sure he will get a more official figure before title transfer. I'm just trying to help determine the best way to transfer title - and how many transfers are required to avoid gift tax return. I have no problem filing a gift tax, but I don't think the client wants to mess with it if there is an easy way to avoid it. Thanks. I hope that makes more sense.

Client's father passed away last month. The client has inherited a $16K car that he doesn't need and wishes to give it to his aunt. The title is still in the dad's name. Can the "estate" give it to the aunt without filing a gift tax? Dad will not be making any more gifts and no longer has to worry about the lifetime maximum. Can the title convert directly to the aunt? Or, does the title have to change to the son, first? Can the title change to the son and his wife at one time? If the title changes to joint ownership, then both can gift to the aunt without a gift tax. Or, to do this, does the title have to change to son, then to son and wife and then to aunt? I know about the $13K per person gift tax rules. I'm just unclear on the necessary paper trail to show that no gift tax return is required. Or, do you just document intent without worrying about the names on the title? Thanks

Thanks, that makes life easier. BTW, can you tell from their instructions which blank on line 21 they want me to use? It mentions an NOL statement, but I don't see it. Even when I use the 1045 Sch B, it doesn't feed to the line 21. If I just use the scratchpad, that doesn't tell the software what the entry is for. I guess that doesn't matter in this case - but it might if I needed to carry forward again and I wanted the software to do that. Thanks

With the ITIN the client won't get the stimulus payment. With SS#, they do. Client will appreciate the extra $$ - assuming they otherwise qualify.

I did fill it out (or rather, TaxWise did). But it didn't do it the way I would have. Specifically, for line 2 it took the taxable income with the NOL and added the NOL. If the NOL was not there, more of the SS would have been taxed and the sales tax deduction changes. I wanted to avoid this confusion since there is on NOL carry forward to 2009 regardless. My 2006 ATX did not add the form. It seems safe to delete the form. Thanks for the reassurance.

New client had NOL in 2007. I show this on 2008 line 21. Since it is much smaller than the taxable income (before NOL), there is no need to carry to 2009. Do I need to include Schedule B of Form 1045? I'm thinking not, but I haven't done a carry forward before. (OK, I did one about 7 or 8 years ago, but it was still in the prior years - I carried back 3 years then to 2 then to 1 for a casualty loss. But that was all shown on one form with lots of amended returns attached.) Thanks