rfassett

IRC 269A clearly states that a personal service corporations (PSC) formed or availed of to avoid or evade income tax by reducing the income of, or securing the benefit of any expense, deduction, credit, exclusion, or other allowance for, any employee-owner which would not otherwise be available, then the Secretary may allocate all income, deductions, credits, exclusions, and other allowances between such personal service corporation and its employee-owners, if such allocation is necessary to prevent avoidance or evasion of Federal income tax or clearly to reflect the income of the personal service corporation or any of its employee-owners. So yes it is a violation of the tax code as I understand it to elect to be an S-Corp simply in an effort to recognize losses on a PSC that is no longer operational. You either loose those losses or you figure out a way for the PSC to make $$ to offset losses. However there is no language in IRC 1362 prohibiting a viable ongoing PSC from filing IRS Form 2553 Election by a Small Business Corporation . IRC 1362 address the election; revocation and; termination of Sub-chapter S status. In general a small business corporation may elect, in accordance with the provisions of this section, to be an S corporation if all shareholders consent to the election and the election is timely made and the entity is not listed as an ineligible corporation (bank, insurance company, 'possession corporation', or a domestic international sales corporation).

I do not believe that is correct for Federal purposes. Your State law may dictate otherwise.

Not sure I am in total agreement. When I started my practice, I was committed to doing whatever it took to make it work. As it turns out, I am that jack of all trades - master of some. Of course, my starting point was a Master of Taxation degree from a reputable school and experience of several years with one of the big four. So I was well in my comfort zone to take what came. Now that said, as time has gone on, I more and more hear that voice in my head stating "a man has to know his limitations". I can afford that now. Back when I started my practice, I knew no limitations. I would take the work and use whatever resources were at my disposal to get up to speed to get the job done. I appreciate that some of the questions posted on these list servs seem elementary; but so did mine when I was still wet behind the ears. We are all trying to eke out a living and doing what it takes to get the job done. Now....all of that said, I still break out in a cold sweat when I am forced to do a 1040EZ. And I am not in the least joking about that. I avoid EZ and 1040A s like the plague. A man has to know his limitations.

Look at part VIII (that's 8 in English), and in the other revenue section you will see Gross Sales of Inventory and Less Cost of Goods Sold. Is that what you are looking for?

I am so sorry Catherine! There are no words that can convey my sympathies. Life is hard, of that there is no doubt. The taking of one's own life, besides being an act of desperation, is also an act that defies logic. So often we frustrate ourselves by trying to figure out the "whys" and "what ifs". The fact of the matter, suicide is an act of non-logic. Trying to apply our sense of logic to it, simply frustrates us. My own son, also named Eric and 26 years old, stymied a would be suicide just last week. When the dust settled, he was more distraught than the would be suicide victim. Suicide, and everything about it, defies our sense of logic and rationalization. I will pray for Eric and his family and you and your family. And even so Lord God, I come to you with a heavy heart for Catherine, for her family, for Eric, for Eric's family. We do not know what troubled Eric to the point where he could no longer tolerate it. But we do not have to - because You know. I am so thankful Father that You are sovereign - in the big things, in the little things, in the things that we understand and most importantly in the things we don't. And so it is, O God, that I place these things in Your hands. I pray that all of those that are affected by the passing of Eric will be able to turn to You - not for answers to their questions, but to simply rest in the calm of Your love and peace. And even at a time like this, it is my prayer that each of them will be able to find that peace that defies all understanding; that peace that can only be found in Jesus Christ, my Lord! I pray that you will take Eric and Eric's family, and Catherine and Catherine's family into Your loving arms and just hold them. I pray that You will continue to be with them during this - their hour of need. And in this day and the days to come, I pray that You will be with each of them in every step that they make and every breath that they take. I pray that You will surround them with loving people that can help them through this time. And if not that, I pray O God, that You will send Your angels to stand watch. Please, O Lord, hear my pray. Thank You Father. I pray these things in the name of my Lord and Savior, Jesus, the Christ! Amen and amen!

I have three monitors turned portrait which effectively gives me six functional monitors. If I had more real estate, I would add a couple more. I do not believe I could function with just one or two monitors anymore.

Irrespective of number of heirs and to whom, you still have estate issues to be concerned about. You may have no issue whatsoever in efiling the return, but there also may be issues that arise.

I do not disagree with your point with the money that was there at time of death. But money coming into the account thereafter would not necessarily carry the same characteristics.

It is not making it an IRS issue; it is simply taking charge of an issue that may arise if not taken into consideration by the preparer.

I agree with Jack, but with the voiced caution that anything can happen to that account between now and when the DD occurs. I might error on the side of caution and re-do the return with a check being issued. Because really that money belongs to the estate and not the daughter. And there should be a record of that.

I only send the page that has a change and write at the bottom - "As amended". So in your case, I would have a 1040X, 1040 as amended, Schedule D as amended and the one page of the 8949 as amended. Seven pages in total. If the IRS wants more info, they will ask. I have only had two cases in my 30 plus years of practice where the IRS asked for additional info. I guess my disclaimer for the above is that I do not know if there are any other pages in the return that changed because of this change. If so, I would do the same procedure.

Are you absolutely certain that you were not out on a shopping spree to celebrate the end of another grueling season and now have amnesia? Sorry to make light of a very serious issue. I have been down that road a couple of times. Very inconvenient - but it could be far, far worse. My latest episode was with Staples. I noticed a charge on my card and it was someone trying to charge a laptop and having it sent to Miami. Staples claimed it was a known perpetrator. Really? Then why the heck is that person allowed to charge ANYTHING at Staples. That also told me that the issue must have been an inside job at Staples - but they would not admit that. We do not allow any company to save our credit card information. And the Staples charges (there were two on the same day) were the only unauthorized charges on that card. I am doing less and less business with Staples.

I do not do that either. But I never miss an opportunity to let my clients know that they, each and everyone of them, is the reason I have a practice at all. Without them, my firm is not. And I do not hesitate to communicate that sentiment. It is just a fact! i do not have a great deal of client contact during tax season, but I do not miss the opportunity to look up from my work whenever a client comes or goes and shout out a thank you and use their first name. Found out this year, though, that I might need to rethink that. I called a client by the wrong name. My vision belied me.

I would bet that the files are bigger at this later date and your computer resources do not have the capacity to open both returns at once. I agree, could do it with no problem early in the season - hit and miss now.

5 of my 40 extensions sent a payment with the extension. But then I get a call today from a 6 or 7 year client who earlier this year said he was going to get his return done for free this year on base. He was in a panic about what they said he owed - about an $8,000 swing from last year. He wants me to do it now. I have no idea if he is going to owe and it is too late too worry about it. I filed the extension with no payment.

In ATX, you select which fed schedule c to associate with which pa schedule c. Simply un-selecting the association should solve your problem. If not that, try deleting the pa schedule c. I should mention that their is a tab at the bottom of the pa schedule c where you select the association.

Completed 464; filed 40 extensions today; still have 10 corps on extension; have one 6 to 8 hour return to do tomorrow. And then I am done. It truly does feel good to run the business instead of the business running me. Good luck to all of you as you race to the finish line! btw, those extensions were all because we did not have the info.

But you can do that. A gift tax return and a quit claim deed is all you would need to do. Of course the quit claim deed would preferably be dated January 1 of 2015. I have, however, seen later dates on the quit claim deed and as long as the evidence "proved" the intent, it is usually a no harm no foul sort of thing. In my opinion, the real issue here would be when your client wants to report it again on her return some time in the future. That might get a little dicey in the eyes of the IRS. Either way, I would extend this return and invite the client in for a meeting next month to sort it out. And of course, it would have to be a client I would want to keep in the first place.

Go to the "dividends" tab at the bottom of the A/B schedule, click on that and you will see "dividend income earned while a nonresident of PA". Put your number in that box. I believe that is what you are looking for.

Agreed! That will at least get the entity extended. That will give you six months to determine what return type will need to be filed.

So you filed the 2014 as an S but did not have a signed 2553? And still do not have a signed 2553 for 2015? You are most likely correct that the IRS has this return coded as an 1120. And that is not going to change until they receive a signed 2553. Review the late 2553 rules and see if your client can fit any of the different forgiveness patterns. Otherwise, the corp is going to be taxed as a C. And for the record, you are already late to have year 2016 considered to be an S. Now all of that said, if you are looking to mount a consistency in treatment argument, you should continue to treat your filings as if the Corp is an S. You do realize that the deadline for fling corporate extensions (C or S) was 3 days ago, right? Good luck!

This question will garner different opinions. I always file a final return. It may not be required but it puts the tax world on notice. And I find that most especially important in this era of rampant identity theft. Now, that said, I have never filed a return for someone that has "passed away a few years ago". All of mine have been timely. For sure, MFJ is not an option. Not sure what I would do with his - maybe go back to the year he passed and file with that year form. But hers I would file now.

I always look at 03/15 as a soft deadline! Got through that with only 25 corporate extensions. Yahoo!

Did you drill down to the under-lying detail worksheets? That should provide an answer. I have never seen anything on line 14 that I did not put there. As Lion suggests, it could have something to do with the auto-balance (which you can turn on or off in the options tab for the 1120). I have never used that option, so I can not tell you where the adjustment to balance would end up.

For ease of mind - one way or the other - efile the extension now and see if it flies. Not sure about Michigan - is their Corp deadline 03/15? If so, can you also attempt to efile that extension? Failing that, i.e., if the Corp has in fact been terminated, it makes sense that the uncollectible receivables were distributed to the shareholder at the end of 2014. If the S-Corp was a cash basis taxpayer, your client would HAVE to put them (and any new activity) on a Schedule C. Your options are pretty limited. Be sure to keep at the fore front of your mind, that YOU did not create this debacle.