joanmcq

Client had house he rented out mid last year. Tenants paid deposit, trashed the place and ran. Bank repo'd house in November, I think., and zillow shows house as being sold Dec 7th for $139000. Main mortgage was for $257952 when cancelled. Not sure of client's basis in house, but he bought it for $210000 and did a lot of improvements. Also had an equity line which issued COD on 12/10/07 for $109670. However, equity line is listed on 1099-C as VISA, not equity line, even though credit union sent out 1098s for the interest paid. Can I count debt & value of rental house when doing the insolvency equation? And if not, is there a possible loss on sale of rental property, if 'sold' to bank for $257952, if the basis was greater than that? Client went bk in Feb 2008, but since the credit union cancelled the 'visa' in december I can't use the bk. Clients owned another house they are upside down in, but not for the amount of the cancelled debt.

Its a pain that it opens automatically, even when not needed. Since its a form I charge for, I'm constantly checking and deleting it if necessary. But its better that it populates unnecessarily than how it was a few years ago when it had to be filled in manually, including for depreciation differences!

Any parts of the house used by the daughter (relative at below FMV) is personal use. So you can depreciate & take expenses based on the sq. ft of the bedrooms and any areas not used by the daughter (ie private bath), and probably take 75% of utilities. See the treatment of B&Bs.

Why would you need to file a state return with a 'stimulus return'? The stimulus return is one that only has to be filed to claim the stimulus. If there is no state filing requirement, don't file a state return. If there is a state filing requirement, there is probably a federal one too.

My eyes are crap. I do have my internet blown up to gigantor size.

The B & B rules are not like the daycare rules; actually they work pretty much like a home office or even more like renting a room. You can only take the rooms not used for personal, unless the personal area has living area, bedroom, bath and full kitchen, and the rental dining area, kitchen, etc are NEVER used for personal. The MSSP will give a lot of guidelines for what you cant do. My boss at work just did some very intensive research for a tax pro who was representing a client at audit on this issue. The client is going to get slammed; all of the remodel has to be capitalized and only the percentage that represents the rooms for rent can get deducted. We determined that if you are going to have a B&B, live in a cabin in the back yard.

I wasnt referring to her sex in the 750 hours. Its the amount of time you have to spend taking care of rentals. If she's rehabbing them, they are not available for rent (at least not usually...we did rebuild a foundation with a family in the house...), although those hours would probably count towards those spent in 'real property trades or businesses'. Another factor to consider is how many hours she spends in the taxidermy business. Another qualification is that the RE hours must be 750 as well as greater than 50% of all hours spent providing personal services.

Qualifying dispositions for an ISO are capital gains...but there are AMT issues. His AMT basis will be higher than the regular basis, and there shoudlbe an AMT adjustment. Means he held the stock for more than 2 years and none of it should be taxed as ordinary income. The disqualifying dispositions have an ordinary income component. What's wierd is that the qualified dispositions amount was apparently added to wages, and the disqualifying wasn't. Don't mix DISqualifying dispositins, with NONqualified stock options. Totally different animals.

I like the client copy watermark too. Helps me sort out the copies when I''m printing; which is mine, which is theirs. Only thing that ticks me off is that it prints 'client copy' on the frikking cover sheet so I have to make sure that prints from the preparer copy. At least it doesn't print on the letters like it did last year. I staple the client copies into one of the ATX colored folders, (hard to mail in that copy by mistake) and this year got a compliment from a new client that it was the nicest presentation he's seen.

Each rental unit would have to satisfy the material participation rules unless they elect to combine the activities, which could have unexpected consequences in the future, and she would have to spend at least 750 hours in RE trades or businesses at a minimum. I've owned 6 rental properties, and some had several units. Trust me, she doesn't spend 750 hours a year unless these were large apartment complexes or something. Why would they not qualify for the addtional child tax credit? And why do you feel sorry for someone who's tax liability is zero, and owns 6 rental properties?

have to do them on the Sch CA. I think there is a worksheet for them. I forget every year too. CA K-1 entry is the main thing I miss from Profx.

He did say the mother wasn't working & he provided more than half the support. So question is, is he providing over half the support of the household & is it his baby? did he & the mother live together the whole year? if he is supporting her 100%, maybe she is dependent too.

Jeez, and I'm working off a 15 inch laptop....

I think the phrase, estate or OTHER final reciepient means that it is taxed to the final recipient. If it is the estate, meaning the ESTATE cashed the bonds, then taxed to the estate. On a 1041, as income to the estate. But Sonny is the final recipient, cashed the bonds, and therefore pays the tax. at a lower rate, I might add.

Of course, then you get the nastygram from the IRS if you don't report all the interest. Per the Tax Book, you have to elect to report the accrued interest on the decedent's final 1040, or else it is taxed to the estate or other final recipient. So if whoever prepared the father's final return did not elect to report the accrued interest, then client has to. the only out is if the bonds were so old they had stopped accruing interest. At that point the father should have reported the interest regardless of whether he sold them. If this is not the case, sonny is outa luck and outa a lot of interest and penalties.

Good to know; one of my clients just took a job in NJ, so I may be dealing with NJ next year!

Dunno, is TN real estate as bad as some of the rest of the country? He could have a loss! So what was value at DOD? Has he been reporting the rental income?

Can an out of state preparer efile in MN and/or MD without any special registration as long as you are federally registered?

WOW! And you get a vacation too! May you be so FRIKKIN happy we can hear you all the way out here.

I've had a problem with PDFs not emailing through yahoo. I can send them through hotmail, but not yahoo. come up 'file corrupted'.

How could an s-corp sell property if it wasnt a corp yet? I hope you charge big bucks for each S. Too bad you aint here in CA; then you'd get to inform him he owes $800 tax for each entity...

Its taxable just like unemployment, at least for federal. Nontaxable for CA. You don't have to tell the program anything.

What my first thought from that ad was identity theft. Give my name, address, SSN, and income over the phone to someone? I don't think so!

And I don't think 100% shareholders can draw unemployment either.

Another one of those 'S-corp keep it outa the W-2 gonna save myself a lotta taxes' schemes. I'm sure she paid a lotta money for that tax planning strategy.