kcjenkins

I agree, either he's in the business of acting as a fiduciary, in which case the income is subject to SE tax, or he's not. If he's not in a business, the income does not qualify for earnings eligible to contribute to a ROTH. Nor do I think that acting as the fiduciary for two relatives would qualify him as 'in business' with a profit motive. I'd strongly advise the client to forget that one.

Question is still not clear to me? Could you expand it a bit?

There is NO basis with 'self-generated' goodwill. Only 'purchased' goodwill has a basis.

Basically, you value the equipment at FMV and then the rest is 'goodwill', which includes the customer list.

Well, I got those prices directly from their website, Carolyn. Including the description of what it included. I think you better check again. I could not find anything on that reseller, when I goggled it. Do you have a link?

Jack is right about the situation he's talking about. The unions were a good thing, at the beginning. But like many good things, they became something else over time. They started out as people banding together to get fair treatment. But over time, they raised seniority to the highest good, and protected workers who were not doing the job, if they had that seniority. And they used strikes not just to get 'fair' pay and benefits, but to get pay far in excess of the value of their 'skills'. When someone who's entire 'skill' is to use a power drill to attach screws to a frame, gets paid $25/hr plus the best medical benefits in the world, plus unusually high retirement benefits, something is wrong. It's not at all surprising that when he loses his job because the company can not sell the cars that are overpriced to pay those inflated wages, he can not find another job paying nearly as well. As for the savings, I've seen people who made minimum wage their entire life, and when they retired they had a paid for home and cars, and savings in the bank. And I've seen people who made over $120K and everything they own has a debt behind it, and they are maxed out on their high limit credit cards. It's the choice of lifestyle that makes the difference, not just the amount of pay they earned. The big problem with many kids today is that they expect that they should be able to afford, right out of school, the same lifestyle their parents have, after a lifetime of working to earn it. And that their parents should pay for that school, while they should be able to afford fun trips for spring break, a nice car, clothes, and lots of 'toys' like iPhones, XBoxes, Wii, laptop and iPod, etc. And then, when they finish, no matter how close they scrap by, they should get a starting salary that will enable them to a nice apartment to go with the nice new car. And they can't understand why that attitude turns off employers who interview them.

Jainen is correct, as usual, it's a no-go. But it IS an opportunity to emphasis the value of getting quality tax advice, when making business decisions that involve taxes, as so many business decisions do. Not to knock the other preparer, who may have told him more than he 'remembered'. In fact, I'd want to look closely at the original purchase year return, to be certain that the election was not there. Because if the preparer was wise enough to give him that good advice, it seems strange that he would not have prepared the election. Remember that clients do not always remember all the details. They often just remember the part that they like hearing. And most of them would not recognize an election if they saw it in their folder.

Yes, you are correct, the basis of the new property is the basis in the old one, plus costs. I think your math is off, to get a cash balance of $40K he must have sold it for $201K. And the gain is recognized to the extent of the cash received. As a long term capital gain. But the first $16K is 'unrecaptured Section 1250 gain' which will be taxed at a maximum 25% rate. And of course we are always assuming that everything was done exactly right on the exchange, including timing.

Seems to me the biggest thing is that it costs a lot more than ATX, Their TaxWorks Combo A (Includes 1040, All States & TaxPlanner) costs $1,695 for a new user, and the 'List Price' is $2,095. Heck that has NO business returns, and yet costs as much at the special 'New User' rate as ATX Total Tax Office???? Sorry, it would have to be a LOT better program to attract me at that price. The package that is comparable to ATX TTO costs $2,195 for the New User rate, and the regular List price is $3,195 which is almost double what I renewed ATX TTO for.

Well, actually, I did not miss it, Joel. I just considered that 1) I did not want to just 'assume' that his client was in IL just because of his name. I have clients in at least 12 states, and at the highest, I had them in 19. And 2) I did not want to take the time to look up IL state sales tax laws, just to answer the question, when it is something that he probably needs to become familiar with, and I don't. As for the 'candy undies', I'm not about to get into that discussion. :blush:

A Russian woman married a Canadian gentleman and they lived happily ever after in Toronto . However, the poor lady was not very proficient in English, but did manage to communicate with her husband. The real problem arose whenever she had to shop for groceries. One day, she went to the butcher and wanted to buy chicken legs. She didn't know how to put forward her request, and in desperation, clucked like a chicken and lifted up her skirt to show her thighs. Her butcher got the message, and gave her the chicken legs. Next day she needed to get chicken breasts, again she didn't know how to say it, and so she clucked like a chicken and unbuttoned her blouse to show the butcher her breasts. The butcher understood again, and gave her some chicken breasts. On the 3rd day, the poor lady needed to buy sausages. Unable to find a way to communicate this, she brought her husband to the store... (Please scroll down) * * * * * * * * * * * * * * * * * * * * * * * * * * * * * What were you thinking? Hellooooooo, her husband speaks English!

I will just add that SOME ministers may, in fact, be self-employed, and file a Sch C. Depends on the denomination, the particular set up in the church, etc. But when you said "Priest brings in a W-2 from Diocese... " that let this one out, for sure. Only option for him is filing his expenses on the 2106, although he may have some breaks on the housing side of things. the nice thing is that with the Clergy Worksheet that they added this year, it's easier to do it and get it right, and also easier to defend it if needed.

On the W-2 input, in the box above box 1, select 'Clergy' from the drop-down menu. Then add an SE, and on Page 2 of that form, on line 2, the W2 income should appear. Next, on the tab for Line 2, you will see line 1b, 'From Clergy Worksheet". Click on the bunny and it will add the worksheet, and on that worksheet you have several pages, where you can enter properly his expenses. Worksheet 3 is for his business expenses, but do worksheet 1 first, as it calculates the percentages the other pages use.

Amy, I actually do not have any disagreement with you on the wage, as such, as long as we are honest on the fact that it is a job killer at the low end. And since that low end is where the job ladder starts, it means that the kids have to be able to jump higher to reach the first rung. Which is what Tom is talking about. What most places even here in rural AR were paying for beginning jobs was around $6.5 to $7, without the new law. BUT, that also means that the worker needs to prove quickly that he/she is WORTH that much. And it means that some jobs simply disappear. Because they are not worth paying that much to get them done. Or, at that price, it makes more sense to buy a machine that can do the job, with none of the related problems that workers have, no requests for time off at bad times, because they just can not miss __________[fill in the blank] or even worse, just not showing up for work, without even a request for time off. No need to pay overtime, and no need to deal with the ever-present new job problem of employees use of their personal cell phones on the job!!!!! Thank you, also, Amy, for making this a real discussion about the issue, not a political issue so much as an economic one. I edited the original quote [twice] to take out as much of that as possible, while keeping the point. I don't think it is really either party, I think both of them are using the min wage as a political point, and personally, I don't believe it is any of the government's business what I agree to work for, or to pay someone. It should be between worker and employer, and if they both agree, especially in these days of low unemployment, when there are always alternative jobs to go to, that should be none of the government's business, IMO. But every new law has consequences, and I do think it is useful to look at the actual consequences of changing laws, and debate honestly and openly whether the actual outcome is a good one or a bad one. Or whether, since most outcomes are 'mixed', part good and part bad, whether it accomplished it's goal. If we only pretend that it is all good or all bad, we don't really learn much. Like many laws passed for good reasons that had bad, or unexpected, consequences, if we can not face those fairly, and weigh them against each other, we will keep on making the same mistakes over and over. I personally enjoy such debates on groups like this, made up of tax professionals that I respect, because even when we disagree, we usually learn from each other's experience and different point of view. Unlike political boards, which tend to be full of rabid partisans who sometimes seem to live in a very different world than the one I know, a group of tax professionals tends to be much more realistic and practical. Even those I often disagree with are usually able to make some valid points that either help me modify my position, or at least strengthen my reasoning behind my point. And while there may be some sarcasm thrown around from time to time, it's usually done without insults and personal attacks, which makes it OK.

Well, two things, Gail. That cartridge is rated at 3000 pages, so it will cost less than the ink for a cheap ink-jet printer, I believe. About 2½¢ per page if you did pay $75. Two, that is the normal price per cartridge, but you can get them cheaper from several sources. And of course, refilled ones are even cheaper. I found new ones as cheap as $37 [ which would work out to at 1¼¢ per page], at http://www.eforcity.com/isamml2010d3.html?...06=isamml2010d3 The second thing is that you are going to pay for ink or toner with ANY printer, and this one is not any more expensive than other laser printers. For example, if the price of an ink-jet cartridge is $34 and its yield is 800 pages, then its cost per page will be 4.2¢ per page. And that of course leaves out the issue of speed entirely. Laser printers are much faster than ink-jet printers, as a rule. I've never heard of any but the very high-end ink-jets that could reach the speed of this low-cost laser, even for plain black text printing.

“It wasn’t Bush, it wasn’t greedy corporations, or free trade, or history’s most over-predicted recession. It was not the oil companies, income inequality, or the excesses of cowboy capitalism. None of these things caused the unemployment rate to jump a half a percentage point in one month. Ask yourself a few questions: Why did unemployment surge at a time when unemployment compensation claims are historically low? More to the point, how could unemployment spike this much without a coinciding spike in corporate lay-offs? The answer to all of these questions is same: because very few people lost jobs last month. This huge jump in the size of the unemployed comes from new entrants to the economy—hundreds of thousands of them. In short, well over 600,000 people who were not job seekers in April became job seekers in May. And who starts looking for work at the end of Spring? That’s right—students. Hundreds of thousands of students are looking for work right now, and they’re not finding it. Congress is to blame. Last year Congress ... passed the Fair Minimum Wage Act of 2007, which started a phased hike of the minimum wage from $5.15 an hour to $7.25. Free market economists warned them that this would increase unemployment—that rapid increases in unemployment compensation hit teens and minorities the hardest. But ...they.... saddled America’s pizza parlors, municipal swimming pools, house painting businesses and lawn mowing services with a huge cost increase. Now, we see the perfectly logical outcome of wage controls, rising unemployment among the most economically vulnerable. Jerry Bowyer ...edited to take out some slightly inflammatory and unnecessary political language

I really liked the replies you wanted to use, by the way.

Yes, that stinks, big time. You don't need a client like that one, he will always be more trouble than he's worth, no matter how good a fee he agrees to. You could not sign a return with that bogus rent on it, and refusing the work is your best option, IMHO.

http://www.buy.com/retail/product.asp?sku=...amp;dcaid=17070 Samsung ML-2510 Laser Printer - 25ppm Monochrome Laser - Desktop Printer - 1200 x 600 dpi Monochrome - Mac, PC This is an amazing price for a laser printer with 25ppm printing, if you need a new printer, or a faster printer. Check it out. It's not for a high volume office, of course, because it only holds half a ream of paper at a time. But for those who have lower level needs, it's a laser printer for about the cost of a typical toner cartridge.

Might that not depend on what the dancer is doing with that hat, Jainen? :D

Yes, it's wonderful. I'd attach a picture, if I knew how to do it.

This is a STATE issue, so the answer depends on the state involved. It may be in your state that the entire bill is subject to sales tax, or it may be that certain portions of the bill are 'exempt'. Remember that is what you look for, what is exempt, rather than what is taxable, because most states say it is all taxable, except when something is exempt. So you are looking for specific exemptions, and you should notify your client IN WRITING, IMHO, citing the code sections, which things and services may be exempt. That lets you off the hook, if he later gets hit with a sales tax audit, and he uses the old 'my accountant told me.....' defense.

You don't have to say that you are not capable of doing the job, you can say that you do not have time to handle it as it needs to be handled, or you do not have the time to deal with the IRS followup that such a return is sure to require, etc. Just resist the more tempting ones you mentioned, and don't put either in writing, including in an email. And even over the phone, assume it is being recorded, and don't let him pull anything out of you that you don't want to explain in a court room. Use the, "I'm sorry, I have to go now, the fire alarm is going off." if you have too. ;~)

So you think the 'rent expense' is either bogus, or paid to him, right?

No, the fact that she is here does not take away his need for extra time, which is why the law gives a longer time for a taxpayer who is out of the country.