Edsel

I believe the topic is worthy of discussion. Thank you CBSLee for the only response thus far. I'm asking about the items in the "adjustment" section of the postcard 1040...Did these survive the new tax law? The "teacher" deduction of $250... Occupational expenses of certain artists, reservists, fee-basis government officials... Moving expenses Self-employed health insurance deduction Penalty on early withdrawal of savings Alimony paid (I heard this one is gone) Student loan interest deduction Tuition and fees. Domestic production activities (I think this one is gone, if indeed it was ever clear anyway)

Are the Bulldogs really that good? Scored 79 points Saturday. Football, not basketball...

Careful Mr. Golar - statements such as the above could subject you to the scorn of fellow comrades, identification with moral turpitude and worst of all, the dreaded "thumbs down" by other members, formerly reserved for Edsel and a few other ill-respected sources. You might have even destroyed any hope you have of being a "Tax Afficianado" - this board's version of designated knighthood...

Jack, I am again rushing to your defense. Not that it helps that much. John, in fact ours IS the only way!!

No, I'm not asking about Gilligan, Dirty Harry, or Jaclyn Smith. I'm asking about the items in the "adjustment" section of the postcard 1040...Did these survive the new tax law? The "teacher" deduction of $250... Occupational expenses of certain artists, reservists, fee-basis government officials... Moving expenses Self-employed health insurance deduction Penalty on early withdrawal of savings Alimony paid (I heard this one is gone) Student loan interest deduction Tuition and fees. Domestic production activities (I think this one is gone, if indeed it was ever clear anyway) Some of these may be gone, but under pressure from lobbyists for vested interests, may be resurrected. Incredibly, this could take place up to April 15th of next year. I don't begrudge anyone for maintaining these deductions, but it's funny how every time congress caves in to these special interest, they never react in such a way as to address the resulting deficit.

I can't believe anyone thought I was serious. Good grief, folks... I hope others read with the understanding of what is progressing with the mentality of the IRS. "The IRS released a statement that they will be cutting their audit staff from 10,000 in 2017 to only 100 in 2025. The commissioner stated that the accumulated savings of millions of dollars will be passed on the taxpayers..." I hope readers understand this is a spoof too... "Bell ringers??" noncompute...

Sorry Beth, you'll have to wait another seven years before their expansion of 8867 audit duties (yes, Audit! call it what it really is!!) are made public.

The IRS has released questions which will appear on the 8867 by the year 2025. These are the people who insist that tax preparers are not auditors. Do you maintain a file with the fingerprints of taxpayer and all dependents? If taxpayer files a schedule E for rental property, do you maintain a file containing closing statements of his initial purchase price and invoices for all improvements made since inception? Do you research from all juridictions the online property taxation records to confirm property taxes deducted? Do you keep records of your research? If taxpayer files a schedule C, do you maintain a file containing hard copy invoices to support all expenses including supplies, repairs, and other deductions? Do you maintain copies of all mortgage loans to support interest deducted on Sch A as well as cancelled checks or bank statements assuring that the payments were actually paid? ... ... ... ... 38...Please be advised that in the event all of the above are not maintained when your records are examined that the preparer penalty has been increased to embody all taxes that would have been assessed against the taxpayer, and the taxpayer will not be assessed. How much more of this are we as a group going to put up with from an agency who claim we are not supposed to be auditors? I've heard elaborate arguments that we are not really performing audits. Can we not recognize the devil when we see him? Get real. I'm ready to support a noncompliance movement en masse, and let the IRS auditors do their job.

Jack, everyone else is beating up on you - not me!! I believe in personally attending and not selling out to the electronic lemming-like slide into oblivion. I can go to sleep either way - listening to some boring presenter or bleary-eyed listening to a webinar. Most of the people I get to listen to are great and colorful speakers. Very few put me to sleep. Can't agree on live schooled being easier to spot, however. I can imagine what you're saying - those who go to live seminars are bright-eyed, well dressed, lilt in their step, and identify with the beautiful people. Sorry about you folks who listen in on webinars - obviously you slouch around in disheveled clothing, walk around with three days growth of beard, maybe even have athlete's feet or something. Not me and Jack, proud exhibitors of what is best in the world!!

What has happened to these under the new law: Personal Service Corporations. It appears this should now be defunct. The entire idea was to eliminate the lower tax bracket for professionals who used the corporation for little other than personal services. I understand there is no longer a lower bracket for a C corp, all income is taxed at 21% i.e. If taxable income is one dollar, the tax is now 21 cents. Personal Holding Corporations. Don't know about the future of this. The new law could still allow a special 20% tax on all undistributed earnings for C corporations with this kind of income. Anyone out there knowledgeable enough about the new law to help me out with this??

Disagree, on the foundation that "freight in" is value-addition, whereas "freight out" is selling expense. I should add that there is more involved than just freight - as "handling" implies other activities such as logging, scrap handling, etc. I'm relying on GAAP somewhat in the presumption that "freight-in" is inventoriable and adds to the value, whereas "freight out" simply charges against the amount of the sale.

From where I sit, I see two differences of opinion: Errors in accounting methods, depreciation methods, etc. require a 3115. If there is simply a data error, no 3115 should be necessary. Given a list of depreciable assets sufficiently long, there are bound to be errors in the data somewhere. To issue a 3115 for each one that is discovered means virtually a 3115 every year. If the changes you describe result in no change in taxable income, it would be a freak co-incidence. An amended return is most likely necessary. It would appear that Form 1120-S and 4562 (at a minimum) would require amending.

I believe for estate valuation purposes, IRS ignores commissions or other "selling" cost. If consistent with this precept, the FMV of the equipment discussed would be $600, and the selling expense $300. This is a $300 loss. If this rusted out stuff is classified as personal, there is no capital loss. If it can be classified as "income-producing" (no doubt at one time there was no question), then the loss should be allowed.

I agree wholeheartedly. Basis issues are accommodated in tax software, but inadequately instructed with confusing narrative menus instead of direct entry. Basis and Capital Balances are rarely the same. Accumulated E&P is another problem. I have gone behind other preparers who have done corporate and partnership returns, and immediately see there is no balance sheet from the prior year. Regardless of how small the entity, if we do not prepare a balance sheet, together with reconciliation of taxable-to-book income, we are failing the customer. Balance sheets are promulgated by GAAP, not by taxable income, and we should be on top of this, or we need help.

Not sure I know the intent. I believe one of the houses was bought before the crash in 2008-9 and the buyer moved out and couldn't sell it so he began renting it conventionally. Another was small and the guy got married so he needed more space. At any rate, they could easily sell now but the idea of "short-term" renting is in vogue. I'm virtually certain there is an agent involved who specializes in finding ST rentals for those who need it but cannot arrange for themselves and unwilling to enter a long-term lease.

Thanks to all who replied. Edsel

Probably not, but both situations I am encountering involve homes already owned. The question remains. Like Max, I'm not aware of anything that would be treated different...but wondering if the low occupancy would result in such a loss that the IRS might require a percentage to be applied to the expenses.

The Nashville population and housing market is exploding. There has never been a better market for "Short-Term Rentals." People move to Nashville and look for something to rent for 2-3 weeks while they look for a permanent home. Companies rent short-term so they have somewhere for their executives to live for a few days' visit, often on a repeating basis. Rental price is sky-high. My question is what happens to the deductibility of expenses if a rental property is available all year, but only rents 100 days a year (for example)? Assume also that the owner does not ever stay in the facility - or at least not more than 14 days. Remember the large number of vacant days is by design, not the same situation as a property being vacant for month or two just because a former tenant moved out.

Speaking of IRAs and charitable gifts: If a charitable gift is directed to be paid from an IRA, does the amount reduce a RMD? Example: Mortimer's RMD for 2018 is $2500. He directs the IRA to pay $2500 to the Cleveland Symphony as a charitable gift. Is he required to take any more distribution in 2018? With so many people unable to itemize and receive any deduction for charity, the idea of directing IRA money to charity is an idea that is quickly catching on as a strategy to minimalize taxes. Slightly changing the topic, but an important question nonetheless.

Makes good sense. Thanks. Any conveyance of property thus becomes an "inheritance" instead of a "gift."

Can a decedent (died in 2018) still gift to recipients after death, so long as gift was made in calendar 2018?

With the benefit of itemizing deductions gone for most taxpayers, will there be more MFS returns? Particularly for spouses of equal income. Are the rates still prohibitive for doing this, or they halved as they were last year? Out of 200 returns, in the past I have only justified 1 or 2 separate returns in the course of a year.

This lively discussion with Judy and Abnormal is appreciated. Drake technical support is not supposed to tell a preparer how to fill out a tax return. I call technical support when I know the facts and can't get their software to return an acceptable entry on a line where it should be correct. If technical support personnel suspects the preparer doesn't know what he's doing, they will back off. And they should. That is not their job. There are no hot answers with the instance in question. Only a couple of lines in Drake that allow an adjustment for same. The Drake manual link doesn't provide much help when the link opens a document of 80 pages and neither the table of contents nor the topical index gets you where you need to go. Thanks folks for your interest and willingness to help.

Abnormal, Thanks. But easier said than done in Drake. The other available elements there involve s. 754 and hot assets. Adding basis to avoid the negative basis also gives the preparer the notion that the taxpayer zeroes out and avoids having to report a capital gain.

If it is California-source income, he should be liable, and file a non-resident California return. He can get credit for taxes paid to California on his Georgia resident return - up to the rate Georgia would charge him on the same income. There have been squabbles about people working from home, and I imagine court cases. Would like to know more about how the court cases turned out. Problem is, these are state court cases and not from the federal system, so the decisions can be inconsistent.