joanmcq

I went over every page of Mitt's return. And Obama's and every other presidential & vice presidential candidate's returns as they were released for at least the last 10 years (yay internet!). And no, I haven't seen the partnership return, but the losses were substantial. And that is one issue; he has so many partnerships, LLCs, etc. from which he derives his income, and none of them are available for review. Just a line item on the Sch. E pg 2. It's not like Clinton's Sch. C for speaking and book royalties which was easy to review. So even when you review his return, there is so much that can't be analyzed. Prizes in dressage are not like a champion thoroughbred racer. And most racers make the bulk of their money through stud fees, or at least there is the chance of that. Ann Romney does ride the horse in question, and in the media the Romney's responses as to the horse and her participation in dressage read as hobby or at best medical expenses. And I have seen many, many audits lost on horse businesses (and read tax court cases), so I do know of which I speak.

However, I believe the laws that allow the carried interest exception to be taxed as capital gains should be a part of any tax reform. I don't agree that Mitt's return is totally above ground; the horse partnership is a good example. We all know that using a partnership for something that would cause great scrutiny on a Sch. C as a hobby can be an aggressive way of bypassing the hobby loss rules. We know the partnership is just as subject to the rules, but is not going to raise the audit flags a Sch. C would. If this was one of our clients, we would say it doesn't pass the smell test for business purpose, profit motive, etc. And as the horse in question is a mare, even future income from stud fees aren't an option. How many other things on his return are just as 'aggressive'?

Of course, the act of cutting it out and gluing the back to the front is dumb. Why not just a photocopy of front and back on the same piece of paper like everyone else does? As someone who ran proof for a bank back in her school days (did the MICR encoding on the checks), we did NOT look at the back of the damn checks. And often one that had bounced was redeposited for processing.

If she cashes it, she will owe the interest & penalties if it was sent in error. I would never recommend just cashing an unexpected refund. A letter will come explaining the change if she made more in estimated payments "We have adjusted your refund".

Why not go on eservices to check on the client's account. Get a POA. Check both this year's and last year's. If you 'cash the check and wait for 3 years', if the check is in error, you've got interest due. Holding the check a few days to check the IRS account isn't going to hurt anything.

Since the cash prizes are awarded by the US Olympic committee, I would assume 1099s would have to be issued. The cash prizes aren't part of the Olympics itself. Remember when the athletes had to be amateurs? These days most of the winners in the popular sports are professional athletes; either true pros like our basketball players, or through endorsements like Phelps. Therefore I see no reason the prize wouldn't be taxed, and if pro, ordinary & necesary expenses deducted, and SE tax imposed. For amateurs, the prize should not be subject to SE.

If you're responding to what I wrote, I was trying to figure out how he could walk in the theatre dressed like that without someone noticing. Wasn't the why....the why is he's f&%@ed-up.

I did a lot of 'when spun, sleep on it' or at least took a break and let the problem continue running in my subconcious while doing something that didn't require much brainpower. It's great how a good night's sleep or doing something like watering the garden can give me new insight-or at least make the numbers and form instructions stop looking like they were written in chinese and make sense again.

Yup, that's pretty much what I had to do. Especially the CA AMT NOLs. This one rings the bell as the most charged for a single year tax return-even if you don't include his husband's return. But in comparison, next year should be a piece of cake.

I went through USAA and have a plan through Philadelphia Insurance Company. Deductible is $1,000 and per claim/aggregate limit is $250,000/500,000. $627 per year. and they worked with me this year to get my renewal date switched to May vs. February. Anyone who goes without E&O is nuts-like CPE it's a cost of doing business. Cost is based on your expected revenues and the type of work you do-for example, if I did financial statements the cost would increase. And if you have questions regarding anything legal, like doing the mortgage companies "comfort letter", or an IRS request for your records, you can call and speak with an attorney.

Hallelujah! I finished all the computations on the return indicated below.......just need the final K-1 for these two. I've been working on it since February.... Oh, Hallelujah!

I've had a few of those; circumstances changed and the taxpayer qualified for a year or so. For one of them it was a godsend since she was self-employed (realtor) and had moved to CA after divorce. She hadn't made estimated payments, and the EIC covered her SE tax. Happy ending; biz boomed, kid grew up and she remarried and they are doing quite well. But that one year kept her from having a tax debt at a bad time in her life. Most of the EIC clients I've had have been single parents-making ok money like $25-30k with one kid. Ok money if you are single with no kids and starting on your career that is. But then again, I'm a firm believer in birth control!

Darn, is that all you can say? yeah, this is a mess, but I'm sooooo close to getting the 2011 return done. A bit more info: The CA 3801 has on line 1a $85330 Line 1b ($95,455) Line 1c (777,570) Line 9 $25000 (allowable loss) Line 10 $85330 (total income) Line 11 $110,330 Total allowed losses Sch CA Line 17 column A ($59,369) This is ($49,244 of S-corp losses, plus the federal ($10,125) of rental losses. Column B ($25,000)-brought over from the 3801 by ATX. Column C- I have a feeling I should offset column B by putting in $10,125. But my brain is fried by this point. Although sleeping on it helped. I had to go back to 2005 and correct all of the carryforwards-it's been truly icky. NOLs, CA NOLS, biz credits, contribution c/fs, and the passive losses. This is really the first return where I've had years of fed/CA differences on rentals other than depreciation...only client that has ever qualified as an RE pro. Oh, and if you want to know just how complex 2011 really will be for CA---client is a same-sex couple that got married in 2011 (different state, so they are married, not RDP). :spaz:

One thing I don't get....now I know a lot of people go to premiers in costumes, but it appears now that he bought a ticket and walked into the theatre, and then propped open the door. Did he go out the back door and get his gear, or stroll in looking like a SWAT team member armed to the teeth?

Seems like there was a lot of worry; just like we were saying, if you've been doing taxes and know your stuff, a little review and passing isn't a problem. Change is scary, but not necessarily bad. Congrats all!

I was hoping to get jainen in on this too.

Faxing to the auditor is immediate. I always use this method to get an appointment, etc, let them know I'm going to rep them. Then you can fax to CAF (if you don't have prior year AGI to use eservices) because the auditor won't always enter the POA into CAF.

I'm working on an RE professional return and am just blank looking at the CA passive loss adjustment on Sch CA. (For those of you in other states, CA doesn't follow federal in allowing RE pro for rentals; only the $25k active participation is allowed). Since this was a DIY since 2006, to satisfy myself that everything is kosher, I've been recalculating all this guy's carryforwards; NOL, AMT NOL, CA NOL and the Fed/CA passive loss adjustments-especially since none of the CA carryforwards from his prior year's returns are correct. When the rentals only had losses, it was fairly straightforward, but for 2010 he has a ton of income on one rental, and smaller losses on the others. From earlier years he has over $100k of CA passive losses. On the federal return, the rentals net to a $10k loss. So I've worked through the detail tab on Form 3801, and ATX is carrying over from the federal no losses on any of the properties. all of the worksheets show zero for federal---well for federal they aren't passive. And the program brings to the Sch CA $25000 to the subtraction column. Since for federal, he is still getting to take a 10K loss, shouldn't the adjustment only be an additional $15k? For the earlier years, I worked out the loss allocations using a spreadsheet. Because one rental has income, my spreadsheet isn't working properly. I've been working on these calculations on and off for weeks now, and I am so close to getting the 2011 return done. Oh, and just to complicate the calcs, he has a nonpassive S-corp loss too.

I admit I had the same thought; heck when I was 6 I had to be in bed by 7pm, summer or during school. And a 6 year old at a PG13 movie too. The baby is just rude to bring to a movie; not that the baby will see or hear anything in the movie, but a crying baby is as bad as a cell phone for other movie-goers. That said, moment of silence for all that died, and prayers for those that were wounded. The interview I saw with a young woman who was in the second row-what a quick-thinking, level headed, amazing young woman! To be staring at a gun barrel pointed at your head and react the way she did. That's someone I'd like next to me in a crisis.

Mine have income, but I have two properties without mortgages. As do several of my client's rentals. I stress to my clients with rentals or thinking about buying rentals that positive cash flow is a good idea, although in the early years you do often get a tax loss simply because depreciation is straight line and mortgages are front-loaded for interest. Any audit where you can show positive cash flow should fly. There are also a lot of situations now where people are renting houses they may have sold if conditions were better. In my area, rents are fairly high, while real estate price remain low. Getting some of your money from a house rather than selling at an extreme discount due to heavy foreclosure activity in an area (not to mention preserving your credit rating) could also be a decent business purpose to renting out a property.

Can't use Sec. 179 on rentals...Depending on the year, there may have been some bonus depreciation, but if the rental was taken out of service, the capitalized repairs are no longer 'new'. Ugh, now I have to finish getting ready for what might be the first ever RDP community property random compliance audit. Tomorrow at 12:30. Don't have much of an idea what to expect; there are transfers between one partner and the other, but the non-audited partner's statements (or anything else regarding the partner) are not included in the audit. Just love blazing new ground.... :wacko:

Why don't they call it 'Heritagecare'? They're the ones that came up with the policies that made it into the PPACA way back when Hillary Clinton was trying to do comprehensive heath care reform. Face it, it's been Taxmaggedon for the last 12 years or so, with all of the sunsets, extensions, new credits, rehashes on old credits and a lack of the ability to plan due to the sunset provisions that have been in place since the Bush tax cuts were put into place. 2011 & 2012 were the only years I can remember that nothing new hit the stands, and we were actually able to project for our clients.

Well, the first mistake was that the tp decided to represent him/herself. What the tp said to the auditor regarding the repairs is unknown, but he or she probably said something like "Oh, I was fixing it up trying to sell it, and so it wasn't rented then. But then I couldn't sell it, so I put it up for rent again". If the tp was trying to sell the property, it is probable the repairs were not deductible rental expenses, but selling expenses (capitalized to basis if the property had been sold). Therefore, it's likely the auditor is making the arguement that the property was not available for rent during that period, and so the expenses would not be deductible as rental expenses. However, when put back into service, you could argue that the repairs would be capitalized, and depreciated.

Actually, I found the first to be a thoughtful analysis on education and critical thinking. As an anthropology/archaeology undergrad major and enthusiast for all things historical since I was a kid-(and I do mean kid, I was reading history & archaeology in grade school) I particularly agree with the 'things left out' of history as taught over the years. I do agree on age appropriate learning: do third graders need to know that US soldiers crushed indian infant's heads at the Sand Creek massacre with their rifle butts to save bullets, an act which led to Custer's defeat? No. Do high school kids? Yes, I think so. The list of banned books makes me sick--To Kill A Mockingbird? Really? The second refers to 'Nickle and Dimed', a journalist's attempt to survive on minimum wage jobs and her struggles thereof. I haven't read it, although I mean to. Since I haven't read it, I don't know the context of the quotes. But I also don't know how 'anti-capitalist' the book is....and might inspire some high school students to stay in school, since the jobs the writer takes are the ones they'll get without a decent education. The last one....well I don't again know the context of the quotes, and the site was such a mish-mash of indignation, it's hard to see what point was being made except that they didn't like the quotes. Things taken out of context can often make any point you want to. But from the writing level of the quotes, I'd say it was at least a high school class. That said, I am all for teaching critical thinking and analysis. And right now, a bit of deep analysis of the Gilded Age (aka Robber Baron era), the economy of the 1920's, and subsequent Great Depression would come in handy around now. I also believe you cannot understand a person or culture until you see the world through their eyes. That does not mean that I like what I may see, or agree with it, but this country could use a bit of 'global perspective' as the first article put it. Might help us to stay out of a few wars, or at least conduct them a bit more efficently if we understood the area we were fighting in (think Viet Nam, Afganistan, Iraq) to name a few....

I'd like to see your back up for the opinion that kids are taught in school that profit is bad. On LBO's: This is the definition of leveraged buyout from Investopedia-not exactly a bastion of radical left-wing thought: Definition of 'Leveraged Buyout - LBO' The acquisition of another company using a significant amount of borrowed money (bonds or loans) to meet the cost of acquisition. Often, the assets of the company being acquired are used as collateral for the loans in addition to the assets of the acquiring company. The purpose of leveraged buyouts is to allow companies to make large acquisitions without having to commit a lot of capital. Investopedia explains 'Leveraged Buyout - LBO' In an LBO, there is usually a ratio of 90% debt to 10% equity. Because of this high debt/equity ratio, the bonds usually are not investment grade and are referred to as junk bonds. Leveraged buyouts have had a notorious history, especially in the 1980s when several prominent buyouts led to the eventual bankruptcy of the acquired companies. This was mainly due to the fact that the leverage ratio was nearly 100% and the interest payments were so large that the company's operating cash flows were unable to meet the obligation. One of the largest LBOs on record was the acquisition of HCA Inc. in 2006 by Kohlberg Kravis Roberts & Co. (KKR), Bain & Co., and Merrill Lynch. The three companies paid around $33 billion for the acquisition. It can be considered ironic that a company's success (in the form of assets on the balance sheet) can be used against it as collateral by a hostile company that acquires it. For this reason, some regard LBOs as an especially ruthless, predatory tactic. Read more: http://www.investopedia.com/terms/l/leveragedbuyout.asp#ixzz20Fxl7esG