Kea

I got a reject on my first e-file of the season. Both taxpayer and spouse are in the military and received non-combat pay. (In the case of the spouse, ALL was non-combat-- box 1 was blank). Got an error that if the non-taxable combat pay election (seq 1185) is significant it must equal the total non-tax combat pay on form W-2. I've entered everything as it is on the W-2s. Is anyone aware of a problem with this issue at IRS? I'm using TaxWise through TRX and spoke to their support people and they could not find any errors in the return. Anyone know if this was a glitch, a TaxWise problem or an IRS problem? They suggested that I re-submit and just try again. Thanks.

I have a problem with the wording, also. I have a client who is a tour guide. The travel agency does not require her to report her tip income (and doesn't do anything with the info even if reported). When I fill out the form, I will usually add a comment that she is not required to report it. She's never told me that IRS has ever questioned it.

I heard that expression a couple of months ago. I decided I liked it better because it is more realistic... and can be said in mixed company.

Or, perhaps "before the ship hits the sand"?

Doug, Thanks for setting up the TRX community board. I hope it becomes an active source of help. But I do have a favor to ask -- If you should ever decide to discontinue the board, please give the users advance warning and please do not do it in early April. Thanks.

TRX Alliance is a company that offers its members tax software with a "bulk rate discount." By having lots of members they can get us good prices on tax software. I joined last year after the customer service issues with ATX. The software they offer is TRX Pro. A couple of years ago they switched to offering Orrtax Intellitax as their product. (I don't know what they used before that). Offer the summer they added an upgraded offer for $699 and called it Tax Pro TW. The TW was Taxwise. Then in the fall, CCH Taxwise bought Orrtax Intellitax. That means both the $299 and $699 packages from TRX are both Taxwise. But that wasn't TRX's choice. I am not familiar with FlashTax, but they appear to be more limited (i.e. they don't offer all the states). I did not download their demo to see what program they use. I still have my reservations about TaxWise, but I may just have to get used to it. Maybe if enough people have problems with TaxWise this season, TRX will choose a different program for next year. The downside would be having to convert AGAIN! I had pretty good customer service response from TRX last year, but have not called for anything this year. I will probably be calling today. I hope there are no problems answering my questions.

There's also a separate TRX forum on this forum. You can get to it off the AXT Community main page, then scroll down. It's not very active yet. But it will give us a place to ask our TaxWise specific questions. Here's the direct link to the TRX portion: http://www.atxcommunity.com/index.php?showforum=7

I don't mind buying a product "on the cheap" by being able to participate in a "bulk rate discount." As a one-person shop, I don't get that opportunity very often. I have a small practice and simply cannot afford several thousand dollars for software. But I do require something more powerful than TurboTax.

The house was owned by the parents. Their assets were not over $2 million so there will be no 706. Not sure yet about the 1041. I'm also not sure (in this case) how to report the house sale. I'm not sure how / if the Medicaid reimbursement affects the basis or selling price. As far as determining who paid over half the support, I will have to wait until I get the figures from the client today. I will depend on (among other factors) how much the client paid, how much Medicaid paid - after reimbursement.

I'll be checking here and probably asking questions. I'm getting a late start due to Dad's health issues and recent passing. I agree with GeorgeM about not liking what I'm seeing so far. But it is still early. I've only installed the 2008 and 2007 versions -- both from the 2008 CD. I haven't even looked to see how to rollover last year's Intellitax. I'll be tackling that tonight and tomorrow. I've got to get back on track. Tax season waits for no one (no matter how good my excuse is).

Both parents were in a nursing home since late 2007 and passed away in 2008, a couple of months apart. The only assets they had were a house and a car. Client was paying nursing home bills until Medicaid took over. Shortly after the 2nd parent passed away the client sold the house and Medicaid demanded (and got) reimbursement for their costs. I will be meeting with the client tomorrow to get exact dates and $ amounts of all transactions. It is my understanding that if the client paid more than 1/2 the support of the parents that he can claim the medical expenses he incurred. Per Quickbooks, it would not matter if the parents' income was over the threshold. The parents only income was from Social Security and whatever Medicaid paid. I am not sure what to do about the amount repaid to Medicaid. The parents had not filed a return for a number of years because their income was too low. Does the cost belong to the parents and go on an estate tax return (if even needed)? Or does the reimbursement go to the client as Sch A Medical? Would the Medicaid reimbursement affect the basis and / or sales price of the house? Thanks so much.

I've used the Brother Multi-functions for years - MFC 8300 then the MFC 8500. They worked great. I was also using an HP 4500dn for duplexing. It was an old office workhorse I picked up cheap. I love the duplexing but it is slooooowwwww. I just replaced both with a Canon MF4350d. It's a multi-function and duplexer and is much faster than the HP. It normally sells for around $250, but Frys.com had it on sale Thanksgiving for $70! It seems good so far but I have not yet tested it for tax season. The only issue I have so far (and have not yet researched to try to fix) is that I can't print to it through my print server. It works fine through a direct USB connection - so that will get me through the season.

The Rev Proc 2008-35 I mentioned in the original post shows the language that is required for the statements. That may help you avoid the legal fees.

Thanks so much. That makes so much more sense. I know the feds and IRS can make some strange rules, but that seemed too extreme even for them. I feel relieved. Thanks!

When I took the NATP 1040 class last month they explained the new "opt-in" signature requirements for disclosing client information. They told us that the signatures were required even for the client to share the info with the tax preparer (who they just hired to do their taxes). I've read Rev. Proc. 2008-35 and can only find references to sharing info with 3rd parties. I collect my clients' tax info, prepare their returns and in most cases e-file the return. Does IRS count as a 3rd party? What about the e-file process count? I don't do bank products or anything else. Do I need a client signature before preparing a return if I'm not sharing their info? Thanks.

Client bought a house with his wife. He did have a friend co-sign the loan and was wondering if that affects the credit / loan. I've looked at all the sites about this new law and don't see any reference to co-signers. I'm guessing that since the $7500 is really just a loan, having a co-signer shouldn't really impact him. Is that right? Thanks.

I believe it's midnight for your local time. I would probably not push it quite that late - but sometimes the clients don't cooperate. I once got the signed 8453 at 11:57 and sent at 11:58. It went though as timely.

Thanks KC. That's a great resource. I never heard of it before. We're always learning. This board rocks! Unfortunately, his temple wasn't listed. Thanks again.

I realize that Section 170(f)(8) does not disallow it. But, does being a Section 504 and not 501 ( c ) ( 3 ), disallow it?

My client donated $7000 to his Temple. The letter states that the information is provided pursuant to Section 170(f)(8), but does not state that it is a 501(c )(3). organization. I checked their website and found that they are a Section 504 corp. Per IRS, this means that they do too much lobbying to be a 501(c )(3). They do meet the deduction requirement of being a religious organization. Is that sufficient, or does the Section 504 status disqualify it from being a charitable deduction? (If it doesn't qualify, why would they provide the information, specifically referencing Section 170(f)(8)?) Thanks.

Thanks so much!

How soon can they do it and it still count as "making it rentable" and not just a personal expense?

The crack is already there - there's no way to hide that. That's why I asked if there was no way to make it a rental expense. My guess is that it can't be deducted. But if the expense is delayed, could it be? Just trying to help them make this huge expense a little more manageable - IF possible (i.e. legal). Thanks.

I'm pretty sure they aren't planning to do the repair in 2008. But, for example, if they move out in June and make it available to rent in July 2009, do they have to wait til June / July to do the repair? Then it might be under repair while the renter is already living there. Or, can they do it in April as a "making it rent-able" expense? What about January? Thanks

Homeowner is planning to retire next summer and rent out house. They have recently found a small crack in the foundation. How close to the house becoming a rental do they have to wait to make it a deductible rental expense vs a non-deductible homeowner expense? Or, since the crack is already there, there's no way to make it a rental expense? If they were staying in the house they would probably not do the repair unless the damage gets worse. They are now doing what they can to keep the crack from growing / getting worse. (They do realize they may lose the $500K cg exemption depending on if they ever live in the house again. The exempt gain is small compared to the rental income they should get.) Thanks