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I have an error on a clergy W-2. The W-2 looks as follows: Box 1 – 7108 box 2 – 42 Box 3 16800 box 4 – 706 Box 5 – 16800 box 6 – 244 Box 14 – Housing allowance – 9692 What are my options to correctly report? A corrected W-2 is NOT going to happen. I have to handle this on the return. This is a part time pastor who has a separate full time job. Is there any means by which to give the taxpayer credit for the tax that was incorrectly withheld from his pay for Fica and Medicare? Suggestions are welcome.

Praying for Don and strength for KC!

I seem confused each time I try to understand what property is section 1245. Real property is section 1250. Would computers and equipment be 1245? Please clarify. I've read the instructions to Form 4797 and in Publication 557 ( I think) and am still confused. Thanks

My client was unemployed for most the year and definitely meets the 750 hours rule. I also know that the 750 is per property unless the election is made to treat the 5 properties as one. My question is what happens if in 2012 they are no longer a real estate professional? Does that draw any red flags to IRS as the more favorable treatment was received for one year only? Real estate professional is determined each year, but once the properties are combined as one they are left that way forever or until they are all disposed of. Is this correct? Can you just combine two of the properties if you have documentation to prove that the 750 was met on those two properties alone? This client also has modified AGI of close to $150,000 so passive loss limitation is a factor in this decision. The losses are being severely limited. Will real estate professional help much as there is still a limitation?

Thanks - Mine used to be automatic as well. I wonder if it is a software glitch.

I have several clients that had the Federal returns accepted last week. The software is supposed to change the status of the state files to created but has not done so. They are still in held status. If I go into to the file and create the state return again for e file purposes, the software still puts it in held status. What can I do? The taxpayers will not get their state refunds if the software won't let me create the state returns to e file. Please help. Software is ATX. thanks

The dependent child of the taxpayer passed away during 2011. I know they still receive all deductions but is there somewhere in the software to tell it date of death? Will this cause an e file problem with matching SSN since one of dependents is now deceased? Thanks,

I do not have many EIC filers, but do have a few. I ask the questions required to determine if they are eligible and complete Form 8867. I utilize the EIC questions tab as part of Schedule EIC in the ATX software. However, on Form 8867, page 3, under Due diligence, the software is automatically answering no to question 21. Am I missing something? The questions on the EIC questions tab in ATX are the same as the worksheet in the 1040 instructions. Do I need to override this question for each taxpayer that qualifies? Thanks for any guidance. I do not want to miss something.

I'm having an issue in ATX. When the print screen comes up, it has the preparer column selected with the common forms for the return. Nothing is selected for filing or client copies. When I manually select filing and client copies, I have to individually select each form. Problem - In the preferences section, the default print copies I have selected are filing and client. Why is it not accepting my selection? It saves it, but does not implement it. I do not need to be manually selecting these forms all of tax season. I'm a one woman shop and need to save time where I can. I have gone out of software and back in but does not change anything. Any suggestions??? Thanks!

Client has NOL carryforwards for 2008 and 2009 that total $49732. The total is correct in software for 2010. How do I tell system to take amount allowed on line 21? Also, what amount is allowed for 2010? Here are the numbers: Schedule c income -$77,122 HSA - 4000 SE ded - 5449 SEP contribution - 13152 standard deduc - 11,400 exemption - 10950 Taxable income with no NOL is $32,171. Any guidance is appreciated. I have tried researching and utilizing IRS worksheets but it all seems confusing right now. Thanks!

Figured it out. Just had to save my work for the system to recalculate and show the changes.

I understand there is a basis limitation. How do I input into ATX? The taxpayer has losses of $131,227 that have not been deducted. Income for 2010 is $43,000. Should be taken off Sch E page 2. Not sure how to get this done.

I have a corporate question. The entity is an S corp. They developed land but ended in a bad situation due to economic downturn. Land costs on books – 5.6 million 1099 A received for 2010 showing balance of principal outstanding as 2,620 ,000 and fmv listed as 2.6 million. Based on my calculations, they have potential cancellation of debt income of $20 k and loss on disposal of land of 3 million. Is this correct? Where does the cancellation of debt income go on the 1120S? I’m not sure if the bank will send a 1099-C or not. The folks basically stopped making loan payments and walked away from the project. The corp still exists because there are some rentals within the company. I have contacted the bank to see if there will be any future 1099-C filings but do not anticipate hearing from them. The loans on the books for this land was 3.7 million. I have tried to research this but to no avail. Where would I find information when it is within a corporation? Of course, this return is due 9/15/11. Any guidance would be appreciated.

I need to look at the actual IRS code covering Rental properties. Is there one section in the code covering rentals or is it just all over? Thanks!

I did not prepare the original return. However, when attempting to e file the 2010 return, became aware that the taxpayer received a first time home buyer's credit in 2008. This was the one that was required to be paid back. During 2009, the taxpayer filed bankruptcy. The house was sold during the bankruptcy. This information was not reported to the IRS. Does this change that the taxpayer is required to payback the amount? Is it all required to be paid back at the time the house was sold? I know how it would be handled if the house were sold in an arms length transaction but since it was done as part of bankruptcy, not sure if that changes the treatment. Thanks for any guidance.

Bumping this to the top. Does anyone have any thoughts regarding this?

There was no estate - everything went to spouse and children under age 18

Spouse passed away with credit card debt. The credit cards were only in his name. 1099-C's have been issued in his SSN. He passed away on 1/11/09 but the 1099's were issued for 2010. Can these be ignored? Minor complication is that one of the cards issued the 1099-c in the name of the estate with the SSN of the spouse. She was not listed on the card. Can I put it on line 21 and subtract out without drawing any red flags from IRS? What other recommendations do you have? The credit card company was wrong to issue in her SSN with the facts that I have been given.

You can actually calculate the number yourself or allow ATX to figure the number. When I have one who I'm not sure, I go to the Pub 575 and calculate with the information I have. I do assume they were not taxed on a portion for each year. Usually, if you ask, the client can tell you when they retired - you will need that exact date. In future years, ATX will figure the amounts once you tellthe software how much has been excluded in prior years. On the bottom of the 1099R worksheet, there are boxes to fill in to calculate simplified method. Hope this helps.

Here are the additional details requested. construction Equipment - original purchase 7/15/09 Section 179 claimed 10,000, 7 year life asset Total depreciation at time of disposal - 16,011 sold 4/5/10 Sales price - 24,000 Gain on Sale - $20,511 This equipment was sold within the S corporation with my client being 100% shareholder. Corp return was done using ATX. $20,511 gain was shown on Schedule K-1, Line 17 code K What would be the amount of Section 179 recapture and how should it be reported on Form 1040? I currently am showing it on Schedule E page 2 on separate line for Miscellaneous income. Thanks for the help.

The both have SSN's. The wife is a US citizen. The husband has a visa that allows him to work in US(not sure what kind of visa though). They came back to the states in June of 2010 and now work for Wycliffe Bible Translators. All the Wycliffe w-2 was earned as residents of the US. They do not qualify for Foreign earned income exclusion. They currently are raising funds to move to NC and work as maintenance/facilities supervisor of the home office. The wife will be doing office work. They each have separate W-2's. Thanks for any further guidance on how to treat this unique situation.

Clients changed jobs during 2010. They are missionaries in the states and receive a W-2 from the home office. The W-2 has Federal wages and withholding but no SS or medicare entries. It looks like the W-2 from a pastor that I prepare but these folks are not ordained ministers. There is no housing allowance given. Is this treated like a regular W-2 or should I ask some additional questions and what would those questions be? Thanks, Bonnie

Taxpayer has a rental property that has been rented at times for the past 5 years. They use this property as a means to provide housing to Missionaries or friends that are in need of short term rental, usually one year or less. They advertise to select groups when the house is empty. In order to avoid FMV issues, the taxpayer has reported rental income the past 3 years equal to FMV monthly rent, although that amount was not always received. The rental property is a separate residence. Now, due to work promotion, taxpayer will have their tax return audited by the IRS and they want to make sure of proper treatment. ( I do not prepare their return. ) My research from Pub 527 indicates that since the rent is below FMV, it is all considered personal use and only expenses equal to income received can be deducted. Is this correct?

An amended return is necessary because the AMT adjustment did create tax due.

Client just called and forgot to tell me she exercised some stock options during 2010. It will result in an amended return. I am trying to understand how to treat properly. Form 3921 was issued and shows the following: Date option granted - 11/22/01 Date option exercised - 03/04/10 Exercise price - 7.76 25,000 FMV on exercise date - 20.00 64,420 # of shares - 3221 There was nothing shown on the W-2 with code V. I understand that the AMT adjustment would be $39420. Would this indicate that she exercised the option but did not sell the stock? I have a phone call into the client and am waiting for the return call. Thanks for clarifying. Bonnie