mcb39

If her parents are paying the mortgage and RE taxes, there is nothing for her to deduct. The answer to your question is No.

Does your 1098-T for 2007 have a box checked at the bottom designating that the payments are for 2008 tuition? I have a situation this year where the parents paid the tuition in Dec, 2008 but the student didn't start school until Jan 2009. Payments are designated on the T for 2009 tuition and we will use them when we file the return for 2009.

Remember; a lot of us are "Older than Dirt!" I feel especially so today.

My understanding is that she has access to the funds to pay bills that she was left with. I know that prior to the divorce, she had to have signed permission from him to spend or sell anything (other than her wages.) I am waiting for someone to get me a copy of the divorce settlement. Her attorney promised to fax it to me, but he has not. I know that she had to pay both attorneys out of these funds. I so appreciate all of the interest and input I have received in this matter. The more I read about WI community property laws, the less inclined I am to think that she has an "out".

I got several state acks and a rejection on a Fed 1065. I think I'll just give up and mail 1065's rather than going through all the pain just like last year. I just don't have the time.

Divorce in 2/2009; Return for 2008 Separation in 4/2008 Divorce filed for in 4/2008 Thank you!

My left hand says NO! Mtg interest is deductible. Personal property tax is not.

KC we discussed this at the time that it first happened (the separation). She filed for divorce the next day. Of course, they had to make it take nearly a year to actually happen. Postponement after postponement with him trying to contest. I have always wanted to file her HOH and him MFS. However, at that time I had no idea how they were handling the 401K issue because she is not supposed to discuss any details. I wonder now about the ethics of filing that way since we do know his income. It was actually the attorneys who arranged the withdrawal of the 401K, much to their advantage it appears. I sure don't want to do the wrong thing here as she has been through enough already. Her attorney told me to prepare it both ways and fax the results to him. I really don't want to put any of this in his hands now as it will just put more feathers in his nest. The X husband really only had less than 4 months of earned income in 2008 and the 401K thing happened long after the fact. I appreciate your input.

Don't scare me like that!!!!!!!!!!!!!

The "or what" would be MFS because she could file HOH with 2 children. However, I am not sure it would make a great deal of difference with this being a community property state. If she hadn't gotten the 1099 for the 401K dist as well as his minimal W2, we could have maybe said that she did not have access to his info; however that would not be the truth at this point. I asked the attorney if there was any ruling on how they were supposed to file and that is when he said he would fax me the information, which he has not done. I would have liked to go MFS and let HIM bite the bullet for the 401K but am not sure that I would be able to do that now.

I would also like to add that my client is very naive when it comes to taxes and money management because her husband always handled everything and was (as we now know) pretty secretive about it. I am not emotionally involved. I just want to do the best job that I can for a client who just happens to be a friend who trusts me. I wanted this divorce to go through before the end of 2008. She filed the day after he was arrested and simultaneously lost his job. Due to the nature of the charges, she has not been allowed to talk about the details. The attorney told me last night that he would fax me a copy of the settlement, etc; but so far nothing. I am going away for the weekend and will not be dwelling on this as I have many other returns that need my attention. I will, however, have access to this board. Thank you all for your interest, advice and support.

When I spoke to him last evening, I asked him who had arranged this withdrawal. He said that he had and sounded quite proud of himself for having gotten these moneys for his client. When I said, "But, what about the penalty?" He said, "What Penalty?" and that is when he started to get defensive. He said that he works from 5 in the morning until 7 at night and I said that had nothing to do with any of this. (As if we don't know what working long hours is about!) I have found on numerous occasions that unless an attorney is a specific "Tax Attorney", they know very little about tax law. Which is why I have asked this board for insight, because I'm not going to get it from him. I am quite sure that part of the reason that he rushed the 401K distribution was so that she would have money to pay attorney fees.

The 1099 is in HIS name and SS. Yes, the return would be for 2008. I think you are correct that the distribution was made prior to the divorce in order to free up cash so the family could pay bills that he had run up and continue to live. I also think that this is why the attorney seemed defensive and patronizing; because he is all of a sudden faced with an "oops"!

My client (wife) was divorced in Feb 2009. 401K Distributions from husbands plan are reported on 1099-R, coded 1. Distibutions are $62900; 20% Fed tax withheld; no state tax withheld. Husband is incarcerated awaiting trial. Does the exception to the penalty apply in this case? They are supposed to file a joint return for 2009. I would have chosen to file her MFS, but delays in divorce.; and QDRO have negated this. Husband has been incarcerated since April 2008 on very serious charges. Can I protect my client from a $6290 Fed penalty and a $2076 WI penalty (under the law). Remember that this is a community property state. Of course, she is the primary breadwinner with 2 dependent children; except for this blasted 401K distribution. I am losing (more) sleep over this one. She is not only a client, but a friend which makes it worse. Spoke to her attorney last evening and he is being very defensive and patronizing. Obviously knows little about tax law. Please advise....anyone!

, I sent a letter similar to that in December to a great many of my clients. Of course, the letter covered other issues such as whether they wanted an organizer or not, etc. I have been amazed at how many have come to their interview with checkbook in hand prepared to prepay. Some have not returned (primarily the ones that the letter was meant for) and that is fine.

Had the same situation last year....client in WI sold land in IA. I had to do the IA 1040 as well as the IA 126 for Nonresident.

Now that we are on this subject...I also have one who brings Barnes and Noble gift cards because she knows that I love to read. Another (a Priest from Poland) brings pierogi and polish sausage as well as tickets to his church festival. I, in turn, buy advertisements in his church bulletin. I have gotten flowers, plants, candles and many gift cards over the years. When we get to this stage of crabbiness, we tend to forget. I have two cork boards on my office walls that are completely plastered with thank you cards and pictures of peoples' children. When you are in this business as long as I have been,; many of these small children and babies are now needing their own tax returns prepared. But OH, I am SO tired!!!!

"It must be an epidemic." In my client's case, the broker is her sister....go figure!

My neighbor lady who lost her husband in January, sends over lunch and dessert at least once a week. I call her Saint Marie. My husband and sons keep her driveway plowed and her vehicle washed. But, how I appreciate her cooking.

It must be an epidemic. I had one today. I told her I was going through past year returns to find the basis for the stocks she sold. She said, of course, "We didn't sell any stocks!" Same situation, stocks sold and reinvested inhouse. Is this some kind of a broker ploy to make money. My client has had these shares since 1999 and has garnered nice CG and dividends over the years. Even with all the addbacks, was still a gain.

Are a lot of things more complicated this year? Are clients more demanding? Are there less hours in the day and less days in the weeks? Or, am I just getting too old to be doing this? P.S. What happened to Jainen....I miss him, because if nobody else will set us straight, he will. P.P.S. Thanks to all the rest of you for wonderful and awesome support. Without you, I could not make it. The isolation of working alone in a home office would be impossible without the help of each and every one of you who answers questions no matter how trivial or unimportant they might seem to be. Nobody could possibly have greater coworkers or colleagues than we have right here. :dunno:

You are correct, Form 5695....that is a misprint in Quickfinders page 12-11.....

Yes,,,,form 5696 Residential Energy Efficient Property Credit.....30% of cost up to a maximum of $2000.

It is back in the works for 2009. Sure makes lots of people happy who hurried to replace furnaces, windows and doors before the end of the year. I do have one client getting a $2000 credit for putting in a Geo-Thermal heating system. Of course the system cost $24,000. Woe to the small guy once again.

When you click on Add New Forms for the return.; go to the box in the left colume and click on Estates. This will bring up the option for you to choose the 1041 K-1 worksheet.