kcjenkins

Well, Jack, the fact is that these seldom get to tax court, because of their very nature. The fact is that the reason banks want the resolutions is because their auditors know that if the corp did not dot the i's and cross the t's, the loan might not be enforceable. It's the same reason that IRS auditors care. And the biggest issue is with loans to and from shareholders, for the IRS. If they can challenge the shareholder loan, they may be able to turn it into a taxable dividend, for example. Why take the risk?

It may be a new thing for ATX, but it's something that CCH has been doing for years. Since TIME is the crucial item in short supply during tax season, I think that if I learn two or three time-saving tricks from it, it will pay for itself. Or even one really common step that I can speed up.

The IRS looks to see that the corp is acting as a corp. because it can be an argument for 'piercing the corporate veil', if the corp has, for example borrowed or loaned money without a resolution of the board to do so.

:bday:

:bday:

Yep, Eric, thats a great idea.

The primary software is called Worldspan. Here is a link, and on that site there is a link to 'opportunities'. http://www.worldspan.com/home.asp?fBUCatID...;fProductID=245

No, you are right, and it may well be that they don't ever ask about the other missing years. If they do, that will be the time to let the client worry about it, and make the decision. Three years is a good start.

:bday:

Actually, Jack, when the cash partner left he got his 25K back, but got it from the bus partner. So it looks to me like the bus partner sold half interest in the bus to the cash partner at the beginning, then bought back that half interest for the same amount at the end. Or you could say that he put the bus in the business, then sold half the business to the cash partner. I say he had income at the start, when he took out the 25K, whether you look at it as selling half the bus or selling half the business, and he has now bought an asset, the second partners 'share' in the business.

Well, I bit the bullet, and subscribed to the seminar in Tunica. I'd rather go to one of the hands-on sessions, but none of them is close enough. Tunica is about an hour and a half away, so it can be a one-day trip, no need to stay overnight. I'll report back, but since it's not until 11/15, I doubt my opinion will help much.

I think this is the one you need...... Or maybe :wacko:

I agree. It sounds like member A had a bus that they agreed was worth $50K. He contributed that to the business, member B contributed $25K, and member A took that as payment for half the bus. So then they had a business with a $50K bus, equally contributed by the members. Now, when the business ended, A buys back B's half of the bus. If you treat it that way, you should end up with a correct picture of what happened.

You make some good points, Gail. I will give it some more thought.

That is wild. Hey, maybe Eric and I should send them a bill? Seriously, though, while they have no business implying that they support this site, [unless perhaps they sent Eric some dough?], I don't mind them advertising this group for us, as our whole point is to help other users. And we can't help them if they don't know we are here. I hope a few more will ask the same question, and see if they are still implying that they are supporting this site. Of course, on the other hand, they are not objecting to our name, which they certainly could do, if they wanted to. If they do imply that, I hope you will ask them to donate to the site's support by clicking on the 'donate' button at the top, and give Eric some cash to cover his costs. As for me, I don't get a thing, and don't want to.

I too was a bit turned off about the price of this 'training'. I think if you buy the software, and certainly if you buy one of the 'premium' packages, the training should be free or at a very minimal price. For one thing, almost everyone who takes the course will be providing help to other users over the course of the tax season. I wonder if they will get enough paying customers to support those sessions? Or will we just skip them, because we see it as expensive enough to travel to take the session, without having to pay a hefty fee to learn to use their program? I'm interested to hear who and how many of our group intends to go to one?

Cute. I edited it to take out the 'explanation' part, LS. because I believe everyone here is smart enough to understand it. :D

The wife will get a legal notice when the house is to be sold, and then she will get notice of any remaining debt. You really can not say that the house "was sold to her about $50K more than real value" because it was sold to her at a price she agreed to. That means that, at that time, she considered it a fair value, as she was willing to pay that much. If she overpaid, that was her fault, not the bank's. As to who gets paid, the holder of the 'first' mortgage gets paid first, which means that sometimes the holder of the 'second' mortgage will bid on the house at foreclosure, to protect their interest, if they think the house is worth it. The odds are that they will not waste money on trying to go after the property in another country, unless it's worth a lot and the country involved has laws favorable to doing so. But they may well go after the husband's assets, if either she has an interest in his property, including dower rights. Or if he is a co-signer on her note. I'd advise her, if she were my client, to try very hard to sell the property herself, rather than let it go to foreclosure. Not only because it would help her credit, but because she might end up getting a better price for it. It's a sad but true fact that sometimes bankers sell foreclosed property to friends or relatives at bargain prices, when they believe they can get the difference out of the other assets of the borrower. Or they simply sell it at auction, where it almost always goes for less than it is worth. In many cases, properties bought at foreclosure auctions are then given a cheap face-lift with new paint, perhaps carpet, maybe a few cosmetic changes, and then resold at substantially higher prices. Why not advise her to do those things, and sell it herself?

OK, use the NR/PY form [You can get a fill-in form at http://www.state.ar.us/dfa/income_tax/docu...0NR_2006_re.pdf if you don't want to pay for the state from ATX.] The total Fed income goes in Col A [and B if Married] and the AR only goes in Col C. So in C you would show interest earned while living in AR, only, ditto for the Pension income and IRA distribution, and the interest income. Then his home state should give him credit for what he paid to AR. AR will want a copy of the Federal return, and his home state will want a copy of the AR return, to support that credit.

I, too, would have turned down these people, maybe not quite as politely as you did. But I would, had they asked, given a 'ball-park quote', prefacing it by saying, "this is just a ball-park estimate, but I'd say this was in the ____range" In that blank I would put my normal fee for such a mess, times 4. Not only would that get rid of them fast [my normal fees are fairly high], but it would be a help to prepare them to pay a fair fee to whoever they manage to talk into taking this on. Oh yeah, if I could see what they paid the last CPA, I'd make sure my quote at least doubled and maybe tripled that amount.

Did you fill in the boxes at the top of the line 19 worksheet? See the tabs at the bottom.

For that, a 'revocable' trust would probably be better. Those do get the stepped up basis, because they don't actually transfer title until the death of the donor. Lots of non-professionals mix up those two terms without realizing it. Revocable, irrevocable, same thing, right? Like flamable and inflamable, you know? :P

You could book the expense and cross account could be a payable to the client. Then let them pay him this year that payable, and also reimburse him this year and in future.

I agree. Unlike a revocable trust, what happens to the donor after the trust is given an asset is irrelevant.

Vertias hit it right on the head. Which is why OldJack's option 2 is a much better option, in most cases.