kcjenkins

50K ordinary income from dep recap. 550K LTCG, OF WHICH 250K IS EXCLUDED.

Looks good, Tom.

San Diego (November 19, 2014) By Michael Cohn A former CPA and tax attorney has been sentenced to 57 months in prison and ordered to pay $2.2 million in restitution to the Internal Revenue Service for stealing the identities of deceased children. Lloyd Irving Taylor was sentenced Monday by U.S. District Court Judge Michael Anello in San Diego. A jury had previously convicted Taylor of 19 felony charges, including aggravated identity theft, false statements to a financial institution, tax evasion, corrupt interference with the IRS, and making false statements on United States passport applications. Taylor has been in custody since his arrest in San Diego in April 2013. Taylor allegedly stole the identities of deceased children and used them as aliases to obtain fraudulent passports and other identification documents. He then used the passports (which he obtained from U.S. embassies throughout Europe) and other fraudulent documents to open and maintain multiple financial accounts so that he could hide his income and assets from the IRS. Taylor also misused the stolen identities to transfer funds between his nominee accounts, and to purchase various assets, such as gold coins, which he used to evade taxes, according to prosecutors. Similarly, Taylor fabricated over a dozen fraudulent religious institutions, and opened 31 related bank and investment accounts in the names of these fake churches. He then misused the tax-exempt status of these fake religious institutions to fraudulently claim that his income was not subject to federal taxes. Following a week-long trial in June 2014, the jury deliberated for just 30 minutes before finding the defendant guilty on all counts. Among the witnesses who testified at Taylor’s trial was the brother of one of the deceased victims whose identity was stolen, along with a blind elderly woman whose Social Security number was stolen and misused by Taylor. The jury also saw the $1.6 million worth of gold coins that he had hidden in a storage locker prior to the execution of a search warrant. Despite working and earning money for over 40 years, Taylor filed federal tax return only seven times. All told, Taylor failed to report approximately $5 million in income, on which he owed the IRS approximately $1.6 million. “Identity theft is a dangerous crime that not only traumatizes the unsuspecting victims and their family members, but also facilitates the commission of further criminal activity,” U.S. Attorney Laura E. Duffy said in a statement. “For years, Lloyd Taylor stole the identities of deceased children and travelled internationally to obtain fraudulent identification documents. Far from living up to his obligation to be an officer of the court and trusted financial advisor, Mr. Taylor took advantage of his victims to line his pockets and avoid paying his taxes.” Duffy praised the efforts of the San Diego Regional Fraud Task Force, working with the IRS and State Department, to uncover Taylor’s criminal activities and bring him to justice. “Mr. Taylor, a tax professional, tried in every conceivable way to avoid paying his taxes—from using the identities of dead children and fake churches to converting income to gold coins,” said IRS Criminal Investigation special agent in charge Erick Martinez. “Today’s sentence reinforces our commitment to every American taxpayer to investigate and prosecute those who use the identities of others to evade their tax obligations.”

That's because the IRS is still rolling out new rules, 'clarifications', etc. I hate the "retroactive" part, that really screws things up for everyone, and it's the hardest thing ever to try to explain to clients. They always think "you should have warned me", since most of them seem to think we are physic anyway! Right? Why not, since we keep their numbers on our ceilings?

There are two many variables because almost every state has different rules for how to calculate n/r returns. Having the tax paid 'flow' might work for some states, but not for those that only allow 'some' other state taxes to be deducted. If you really think you must have that flow, better be looking quite a bit higher in the price scale,

I've had clients tell me that "nothing spoils the Christmas spirit like getting reminded about taxes in Dec."

Background checks are not as reliable, IMHO, as your own gut feeling when interviewing them. Both good and bad info may be 'planted'. And, as Medlin said, the best is to start with a safe position and get to know the person before adding more responsibility.

"Trust but Verify" is good policy. When it comes to employees, I never employed one I did not think I could trust, but I also observed their behavior, and limited the access of support staff. It's always something you have to be concerned about, in this business, because of the extent of confidential info we handle. So, an emphatic NO to employing anyone you feel is not trustworthy.

Washington. D.C. (November 11, 2014) By Michael Cohn The Internal Revenue Service has issued guidance clarifying the impact that a 2014 rollover of an individual retirement arrangement has on the one-per-year limit imposed by the Tax Code on tax-free rollovers between IRAs. The clarification relates to a change, announced in April, in the way the statutory one-per-year limit applies to rollovers between IRAs. The change in the application of the one-per-year limit reflects an interpretation by the U.S. Tax Court in a January 2014 decision applying the limit to preclude an individual from making more than one tax-free rollover in any one-year period, even if the rollovers involve different IRAs. Before 2015, the one-per-year limit applies only on an IRA-by-IRA basis (that is, only to rollovers involving the same IRAs). Beginning in 2015, the limit will apply by aggregating all an individual’s IRAs, effectively treating them as if they were one IRA for purposes of applying the limit. To help taxpayers by allowing time for transition to the new interpretation, the IRS announced shortly after the January 2014 Tax Court decision that the new interpretation would not apply before Jan. 1, 2015. In Announcement 2014-32, posted Monday on IRS.gov, the IRS made clear that the new interpretation will apply beginning Jan. 1, 2015, and said that a distribution from an IRA received during 2014 and properly rolled over (normally within 60 days) to another IRA, will have no impact on any distributions and rollovers during 2015 involving any other IRAs owned by the same individual. This will give IRA owners a fresh start in 2015 when applying the one-per-year rollover limit to multiple IRAs. Although an eligible IRA distribution received on or after Jan. 1, 2015 and properly rolled over to another IRA will still get tax-free treatment, subsequent distributions from any of the individual’s IRAs (including traditional and Roth IRAs) received within one year after that distribution will not get tax-free rollover treatment. The guidance makes clear that a rollover between an individual’s Roth IRAs will preclude a separate tax-free rollover within the one-year period between the individual’s traditional IRAs, and vice versa. As before, Roth conversions (rollovers from traditional IRAs to Roth IRAs), rollovers between qualified plans and IRAs, and trustee-to-trustee transfers—direct transfers of assets from one IRA trustee to another—are not subject to the one-per-year limit and are disregarded in applying the limit to other rollovers. IRA trustees are encouraged to offer IRA owners requesting a distribution for rollover the option of a trustee-to-trustee transfer from one IRA to another IRA. IRA trustees can accomplish a trustee-to-trustee transfer by transferring amounts directly from one IRA to another or by providing the IRA owner with a check made payable to the receiving IRA trustee. More information on the rule change can be found at http://www.irs.gov/Retirement-Plans/IRA-One-Rollover-Per-Year-Rule.

Changed it for you.

He qualifies under both the ownership and the use tests, but he cannot exclude the part of the gain equal to any depreciation allowed or allowable as a deduction for periods after May 6, 1997. Also consider Unrecaptured section 1250 gain. This is the part of any long-term capital gain from the sale of your home that is due to depreciation and cannot be excluded. To figure the amount of unrecaptured section 1250 gain to be reported on Schedule D (Form 1040), you must also take into account certain gains or losses from the sale of property other than your home. Use the Unrecaptured Section 1250 Gain Worksheet in the Schedule D instructions for this purpose.

Clearly, the cost of the cancellation fee should have been included in any comparison of whether moving was a good deal.

Great answer, Sara. What about attaching the foreign return?

November 6, 2014 By Mary Ellen Biery Singer-songwriter Joni Mitchell was referring to environmental impacts when she sang, “Don’t it always seem to go/That you don’t know what you’ve got/Till it’s gone” in Big Yellow Taxi. But chances are, many accountants have the same thought after a client leaves the practice—especially someone who was with the firm for several years. After all, numerous studies show that attracting new clients costs a lot more than retaining existing ones. Studies have also revealed that the reason a client leaves may not be what accountants expected it to be. Many accountants believe pricing plays a bigger role in clients’ decisions than it actually does. So what are the top mistakes that accountants are making when it comes to retaining clients? Here are a few, along with some suggestions for preventing your firm from making them. Mistake #1: Believing that clients will ask for help when they want it. Accountants who expect clients to inquire about additional services or to seek advice on financial issues are not only missing out on cross-selling additional services, they are also putting client relationships at risk. Technology provider The Sleeter Group recently surveyed small and medium-sized businesses about why they left their accountant, and the top reason was because the accountant gave only reactive—rather than proactive—advice. Tip: When presenting financial statements or tax returns to a client, identify one or two open-ended questions to ask so that you can start the dialogue with clients about their business concerns and begin to offer proactive advice. It can be something like, “What was your biggest challenge last year?” or “Is there anything I can help you with in the year ahead?” Mistake #2: Assuming clients understand what accountants do. Sageworks chairman Brian Hamilton says many business owners don’t use their accountants to help manage their business because it doesn’t occur to them. “When they think of their accountant, they think of taxes,” he says. It may not occur to them that you can help them decide whether leasing or buying equipment makes better financial sense, or that you can help them identify ways to prevent fraud or speed up payments from customers. Hinge Research reported recently that two-thirds of buyers of accounting and financial services admitted they don’t know all of the services offered by sellers. At the same time, 44 percent of those buyers said they were interested in additional services. It’s up to you to educate your buyers. Tip: Include a list of all services your firm offers when you communicate with clients (presenting financials/returns, or when sending a thank-you note for recent business). Break the services down into language the client can understand rather than industry jargon, using examples where possible. Mistake #3: Assuming clients already know what to do to run their business better. Obviously, business clients aren’t stupid; they’re running businesses very successfully in many cases and have solid expertise in many aspects of operating the business. But many of them don’t know finance, and they may be so caught up in the day-to-day running of the business that it doesn’t occur to them that they can take simple steps to improve financial results. Many of them are also intimidated by their accountants because it can seem like they’re speaking a different language. Tip: Use plain-language reports and graphics to show a business client how their business is performing and to offer suggestions for improving financial performance.

Yes to Sch D. Not sure about attaching the Indian Income tax return, I'd be inclined to say wait until/unless it's asked for.

Well, the way I see it, this is the 'General Chat', and should continue to be. The 'Private' forum is for things like pictures, bragging on kids, etc, but an occasional joke here is not going to hurt anyone, as long as the Topic name indicates it's not tax. Anyone can skip it if they don't want to take any time out for a smile. And I think experience clearly shows few use the specialized forums we already have, so I don't think we need more of them. So often, software and even hardware questions are actually tied into tax questions. I'd just ask that we all try to make our Topic Headings as clear and informative as possible. And most all of you do that. I've been on boards where headings are cluttered with headings like 'Just a Question..". Thank goodness, that's really rare here. So if the post is headed "Anyone going to the Rangers game?", I won't care, because it should be easy for anyone to skip.

And even worse "with Intuit issuing payments for completed clients on a monthly basis" ? Wow, how could anyone resist an offer like that?

That was my favorite, too.

Yes, don't forget, it was that feeling between 'us' and 'them' that led to the creation of THIS BOARD, when Eric, at that time an ATX employee, understood how bad the decision of CCH to close the 'official' board in early April! Might be a good time to use that 'Donation' button again........

Yes, VITA serves SOME people OK, the very simplest returns, but so often they don't know enough to know when they should not try one. They mean well, but screw up lots of times out of ignorance. Which says more about our complex and convoluted tax code than about the volunteers.

He needs to have an 'arms-length' transaction to have ANY loss, Selling to his nephew won't cut it. Has he been taking any payments? Or putting more in? Did he put the whole 300K in at the start, or has he been putting in gradually over time? In which case, if so, did he get more stock for the additional money, or were those loans? You can not time travel to change what they started as, but you can look at what they've done recently. But to take a loss, you need an event to establish the loss.

My objection to them is mostly to their advertising methods. They run ads implying that "anyone" can prepare their own return just as well as a professional by just using their software. Clearly untrue. They do the same thing with their other software.