rfassett

Aaawww - I see. I remember something like that. And then people stopped bringing me food. Go figure! Does a bag of pretzels and a reese's peanut butter cup count? That is what I had between pages today. So THAT is what a lunch is.

I know it is early in the game for this kind of comment, but the facts are the facts, what's a lunch, Jack and Eric?

Yes, Tom, please. I am interested.

Are we having fun yet? The advanced credit was based upon her projected income, family size and insurance plan she was buying and how the income flirted with the poverty level or 4 times that number or something like that. She would have had the choice of taking the credit in advance or taking it with her return. Since she took it in advance, as you are seeing, she may have too much advance credit and have to pay some back. Don't cry too deep of a river for her. It was still a good deal for her. But your point is very well taken - this is so weird! By the way, you are seeing first hand how the preparation fees are going to be higher for those that can least afford it. And trust me when I say that I have, six times now while I have been typing this, got up and then back down off of my soap box. I am fighting hard to stay off that.

Clarify a couple of things if you could. The attorney said that your client is going to receive a lot of money to manage the wife's care so she qualifies for aid? If she not well and needing care now? Or is this a plan to spend down the estate so that she WILL qualify for aid (when the time comes)? The personal service contract makes sense if she is not well, but what is the purpose if she is well. My understanding is that the spend down only works if the care that she is getting at home is just a substitute for the care that she would get in a nursing home. In other words, but for the care that she is receiving now, she would be in a nursing home. Not sure about the Schedule C - I would have to research that. If it is Schedule C, then I guess you could fund a retirement plan with most of it. That may be what the attorney is referring to. Anyway, those are just some things that pop into mind right now.

No reason to feel dumb. Geez, for real, if that is how we are going to gauge people, they do not come dumber than me. And I say that with complete sincerity. I would set up an intangible on the clients books and call it "Client list". I would take some reasonable number of years of payments for each client that Dad will receive payment for and call that the sale price and start amortizing that as of the day of the transaction. The offsetting entry would be to Note Payable. All payments then would be debited to the note. Now the right way to do this would be to take the present value of the revenue stream and use that number. The difference between that and the actual received would be the interest component of the payments. It would be interest expense to son and interest income to Dad. The rest of the payment would be capital gain to dad. If you are not comfortable with present valuing, put some real numbers on here and I am sure someone that does that can help you. And keep in mind that this sale price will be subject to adjustment at the end because you are using estimates (completely legit) now.

Thanks mircpa and Judy for confirming and validating my thoughts.

Deb, It really was a sale. Again, they can call it whatever they want. If Dad no longer has any interest other than a % of revenue, then he is receiving payments for the sale of his client base, goodwill, what have you. And issuing a 1099 Miscellaneous is the wrong thing to do. This is often the way professional practices are sold. The seller will get a payout % of continued billings that were in place at the time of the transaction. That is no different than what you are describing. If I sold my practice like I just described to fund my retirement, it would be a sale. Continuing the argument, in proposing the transaction the way you are, you are penalizing the Dad by converting capital gain income to ordinary income.

A rose is a rose, by any other name, it is still a rose. They can call this whatever they want, but on audit, my bet would be it is, for whatever reason, a disguised installment sale. Are there depreciable assets that Daddy does not want to recapture depreciation on? I would not treat this as any kind of 1099, but as what it is, an installment sale. That is my opinion, for what it is worth.

Absolutely. We will handle it correctly on our end. The only issue throwing me is why the realtor would need to issue my client a 1099. This should all be properly documented on the HUD Statement, no?

Facts: Client buys a residence in 2014 with the realtor giving a discount or credit on the commission. Realtor reaches out to client yesterday explaining that "I am going to have to give you a 1099 for the credit because they have added it to my gross income. I will call you tomorrow for your Social Security number." What say you? Is a 1099 required? If so, why? If so, where would it be reported? Thanks! Oh, and the only other fact I have is that this took place in Virginia.

Another point, most likely not required on your 1065, but I ALWAYS do the balance sheet even if not required. Keeps things cleaner from year to year.

Not guaranteed payment unless the partnership (LLC operating) agreement says so. Not salary unless the LLC is set up to do payroll. It would be a draw just like you would have a draw on your Schedule C clients. The bottom line of the 1065 goes to the K-1 which goes to the members individual 1040s. My guess is it, the K-1 amount is also self employment income. Are you certain that the multi-member LLC has not elected to be taxed as a different entity, say 1120S? Just asking to cover all bases.

Yeah, I had the same thought. A lot of pricing discrepancies are the result of location and culture. You are somewhat higher than my minimum but I live in Podunk USA where the cost of living is less. My minimum get out of bed fee this year is $200, higher for business returns. I had an email from a multi year client (a PITA client I might add) stating that he did not have much activity in his S-Corp last year so he is wondering how much I am going to charge him and "oh, I need it done by the end of January". I email him back a quote of $500 because in PA, S-Corps are never that easy, even with minimal activity and the end of January is problematic because the forms may not be available and I may not be doing returns yet by then. He emails me back saying he is going to have to shop around - for his own peace of mind. Well, if and when he gets back to me, the price just went up a $100. And if he balks one iota I will tell him to not let the door hit him in the back side. He is one that does not really fit my client profile so if this is a parting of the ways, no big deal. The vast majority of my clients would never treat my firms services as a commodity and do appreciate our work and will pay what I bill them without hesitation.

That is precisely the reason I gave up thinking several years ago. (My client think I have a lisp when I say that out loud and they think I am saying I gave up DRINKING. If they knew the truth they would probably bolt. )

Had an attorney in my office yesterday with a mutual client. I do not work with this attorney much but he was sharing with the client and me about his recordkeeping system. He keeps everything in a desk draw until it gets too full (and in his car console) then he transfers that to a big box in a closet and repeats that exercise until the end of the year when he goes through it paper by paper to get it organized for his tax return. And he went on to share what his wife does for a career. Are you ready for it? She is a CPA. Some people just can not be helped.

Issue the 1099. The vendor received the money. Your client's issue is with the bank, not the vendor. If the vendor claims he received the money, issue the 1099 to remain compliant. The checks are still outstanding and it is assumed that they will at some point clear the bank. So your client is entitled to the deduction. If for some unexplained reason, the bank never ever clears the checks, then your client would need to pick them up as income at some point in the future.

Chowdahead - thanks for a detail and very informative dialog of your TT experience. I guess the only thing I would question is that your attempt to be an average taxpayer is tainted. You are too much of a professional to think like the average taxpayer. I imagine the average taxpayer is looking at the refund amount and clicking a bullet and saying "that increased my refund so I will leave that one clicked". Or, "that decreased my refund, I think I will unclick that bullet". You are, in my opinion, giving the average taxpayer too much credit. Just sayin'.....

Actually, I have not heard much about the wireless charging but the tech doing my pacemaker interrogation last week said that the technology for the interrogation (where he checks the leads, the pacemaker and makes any necessary adjustments) is Wi-Fi technology. My pacemaker is in a pocket just below my collar bone and it is very visible. Apparently when it comes time for a battery change (which is the changing of the whole pacemaker) they just open the previous incision and pull the old pacemaker out, unplug it, plug the new one in, stick it in the pouch and stitch up the incision. Funny story about my implantation. It was an ordeal that had me flat on my back for over 15 hours but that is a story for another day. This story has to do with when I got home. Rebecca (my wife) right after we got in the house and were standing at the dining room table says, "let me show you what I got at the gift shop while I was waiting for you". She pulls this long box out of a bag and opens it up and pulls out this long magnetic address bar to put in the front yard. I think I must have JUMPED fifteen feet backwards. Magnets are not a friend to pacemakers. The size of that magnet could have stopped my pacemaker. I still wonder about her motive. :)

It is way too early in the season for these things to be bothering us. Make no mistake - they are bothering us. But I think all the angst surrounding this season has us all on edge. I am also fighting the battle to tell some folks to take a flying leap and I will supply the take-off module. We are still knee deep in payroll reports and of the 60 some that we have done we have had to re-do two. Who told these folks that they are allowed to critique our work. Fact of the matter, neither mistake was ours. One duplicated a paycheck and did not bother to tell us. The other forgot to include the pension contribution for the Pastor. On another note, I had a call today from a long time client that bought a pickup truck from a dealer on the other side of the state line. Client calls to ask me how he pays state sales tax on the truck. What, the dealer did not know the answer to that question? Fortunately that call came today and not a month from now. I still have some stored up "nice thoughts". I used a couple of those up today.

I have a mental battle going on over how to respond to this. My initial thought was "Wow! That was a real kick in the gut". But then I thought, "Wow! 85 days is a long time". Then I thought, "I will never get all of them done!" And then I thought, "oh the heck with it. Get to work."

JJStephens - I would tend to buck what seems to be the consensus. I believe the purchase of air time is a product and it does not warrant the issuance of a 1099. I don't have a cite. But I could put together a pretty convincing argument if it came up. I would not issue a 1099 for the purchase of advertising spots either. If I had someone design the ad for me, the I would issue a 1099 for that service. In the present case, if I am paying someone to do something inside that airtime, I most likely would issue a 1099 (or W-2 if warrant). But I do not believe the act of just purchasing airtime warrants a 1099.

Naveen - I have no words of guidance. You are walking a path that is frightening beyond measure. I have been married for over 41 years and just cannot imagine the emotional turmoil thrust upon you. Life is very hard at times and can seem so unfair. I cry with you - even now. You have received some very good counsel on this thread. Just know that you are not facing this emotional trauma alone. I can say without hesitation that you will never get over the grief. You will learn to cope with it as time goes on. And grieving is like finger prints, it is different for everyone. A time limit cannot and should not be placed upon it. I would encourage you to rely heavily on family and friends. And know that this group is strong with prayer warriors. I too will continue to pray for you. I have no strength of my own, but the God of all creation hears our prayers. And that is why I pray for you - because I believe He hears when we pray. So even now Lord Jesus, I come before You with a very heavy heart. I do not know Naveen or his wife, but You do. And You know the situation. You are a sovereign God. And not just sovereign in the big things. You have told us that You care even about the sparrow. And so too, You care about Naveen and his wife. You are in the situation, even now, with Naveen and his wife. I pray, Oh Lord, that You will guide Naveen in every step that he takes and every breath that he makes today, tomorrow, in the time to follow this heart wrenching time, and forever more. Father, I am mindful of just how deep Your love is. I pray, even now, O God, that Naveen would feel that love completely and unquestionably wash over him and that he will know that he cannot take one step outside of Your incredible, unsparing love. This is a hard time for Naveen, Father. We take great comfort in the knowledge that You have known these kinds of times and You will carry Naveen through this. Father, please wrap Your loving arms around Naveen and his wife and let them feel Your peace in this, their hour of need. Father, I also pray for every member of this extended family. I pray, O Lord, that You would keep us mindful that You are with us now, and always. Help us, Father, to be there emotionally for Naveen as this situation develops . And, Father, if there is anyone here that is near to Naveen physically, I would pray that You, O God, would lay it on his/her heart that he/she needs to be "boots on the ground" right now. But, Father, if none are here, I am confident that You will rise up Your people to be with Naveen and his wife as this situation unfolds. Father, our hearts hurt for Naveen. Please be with him and let him feel Your presence in a very real way. Father, thank You for hearing my prayer. And I pray all these things in the name of my Lord and Savior, Jesus Christ. Amen and amen! Naveen - please know that we care!

That is one return completed. Schedule C, no assets. Very clean. Health insurance coverage for all persons on the return with same health insurer for the whole year. Would that they would all be like this. Amen? Oh - and BTW - it is really nice to be back in familiar territory!

Really? Come on man! That is just too funny! LOL out loud!