David

Thanks. Any idea why that form didn't pop up in the ATX program?

TP does not want to e-file. I thought there was a new form that had to be signed by the TP stating that they don't want to e-file. However, the form did not pop up in the ATX program. Does anyone remember what form is supposed to be signed by the TP? Or is only a statement signed by the TP required? Thanks.

Thanks for the input. The reason I am considering the ATC document manager is because I am already paying for it in my package deal and I figured I should use it if I am paying for it. Plus I have read posts on this site that had raving reviews for the doc manager. However, I don't see much difference between the doc manager and what I am doing now. I thought maybe the doc manager would be less manual, but I still have to print the tax return and anything else just as I do with my manual system. I thought maybe there would be a quick button or something that would automatically print the tax return, etc. Since it seemes as though many are using the doc manager program, I wanted to understand what I must be missing regarding the benefits of using the doc manager vs. my manual system. Thanks for any insight.

Thanks everyone for the input. It makes sense. As far as starting to use the document manager - have any of you used the manual system I am using and switched to using document manager? If so, how did you incorporate or merge the two systems? Or did you start a new directory with document manager? Thanks.

I have seen several posts where many seem to make a PDF copy of all of their clients' tax returns and save it to the client's folder. I am curious why this is done since we have a copy of their tax return in the ATX software. I'm sure there is a good reason and I am not realizing the benefit. On another note - I have a directory with folders for all clients and subfolders for each year. I keep tax documents, correspondence, etc. in each of these folders. I heard rave reviews about the ATX document manager. However, it seems as though I cannot incorporate my current system within the document manager. Is there any benefit beyond what I am doing by using document manager? Thanks.

Thanks so much for your help.

Thanks so much for your help on this. All LLC debt is amounts owed to the LLC members. Won't these amounts be offset against the member capital account? If I understand you correctly, I don't calculate any gain or loss for each member on their respective K-1. I just report positive or negative capital account balances on their final K-1 and it is up to each member to properly report their gain or loss on their personal tax return. Is this correct? Thanks.

Sorry if I wasn't clear. It is a multi-member LLC filing a 1065. My mistake - I thought that would be understood, since a 1065 is the default tax return for a multi-member LLC, unless I specifically said the LLC was taxed as a S Corp. Thanks for your help.

I asked this question last week and didn't get a final answer to my questions. This is my first LLC dissolution. The LLC has 7 members. Do each LLC member handle their own gain/loss from dissolution on their personal tax returns? Or do I report the gains/losses on the K-1? If so, where is this entered in the ATX program and where does it get reported on the K-1? 6 of the 7 members have no basis and have negative capital balances. Do I allocate assets and liabilities to each member and if there is a positive balance left in their equity account, that is reported as a loss? Likewise, after allocating assets and liabilites to the 6 members with negative capital balances and the balance in their equity account remains negative, that is reported as a gain to them on the K-1? As far as assets, such as computers, that are transferred to the members, are those asets transferred at book value and only when the member sales those assets would a gain or loss be reported? Thanks for your help.

Thanks for your response. Do I calculate the gain/loss for each member? Where is this entered on the K-1? BTW the members with negative capital and zero basis never took losses since they had no basis. Would the negative capital still be ordinary income to the members? Where is this reported on the K-1?

This is the first multi-member LLC dissolution for me. The LLC has 7 members. Six members have zero basis and negative capital balances. Basically, one of the members has been carrying the other members. Where in the ATX program do I close out the member accounts and book gains and losses? I don't see where that would be on the K-1 input. Is the gain/loss from dissolution reported on the K-1 or is it up to each LLC member to report this on their personal tax return? The person who records the QB information for the LLC did not make closing entries. Is it as simple as zeroing out the balance sheet accounts and allocating to each member account their portion of assets and liabilities? Thanks for your help.

OK, I forced section III. Nothing carried over to section III of Form 4797. Form 4797 only shows the sec 179 recapture in section IV. Since the asset was converted to personal use and there was no gain and only the sec 179 recapture, is this how Form 4797 should look? Or should there be information in section II as well? Thanks.

Thanks, KC, for your help on this. The options on the disposition worksheet to force the 4797 are for parts I, II or III only. Part IV is not an option. Do I still force one of those parts and then go to part IV to enter the recapture information? Or do I leave the force 4797 blank and enter the recapture information in part IV? Thanks.

TP had a Sch C business that she started in 2008. She took sec 179 on a computer purchased in 2008. I was just now notified that she did not participate at all in the business in 2010 and is no longer doing that business. I recorded the converted to personal use in the disposition tab of the Asset Entry. Asset Entry says that the converted to personal use won't be reported on the tax return. Why isn't the ATX program reporting the sec 179 recapture? How do I get this reported in the ATX program? Will it be classified as recapture due to less than 50% business use or classified as something else? Thanks.

Another thing regarding this issue - Since the 2010 program will not allow the converted to personal use date to be 12/31/09, I have to use 1/1/10 as the date the asset was converted to personal use. This will calculate some depreciation in 2010, which shouldn't be correct since the TP did not use the asset at all for her business in 2010. How best is this handled in the ATX program? Thanks.

TP had a Sch C business that she started in 2008. She took sec 179 on a computer purchased in 2008. I was just now notified that she did not participate at all in the business in 2010 and is no longer doing that business. I recorded the converted to personal use in the disposition tab of the Asset Entry. Asset Entry says that the converted to personal use won't be reported on the tax return. Why isn't the ATX program reporting the sec 179 recapture? How do I get this reported in the ATX program? Will it be classified as recapture due to less than 50% business use or classified as something else? Thanks.

We used to have a tax planning strategies section in our Kleinrock research that gave us ideas to help client with tax planning. I can't find anything like that in Intelliconnect. Does anyone know if there is a tax planning strategies section in Intelliconnect and how to find it? Thanks.

Thanks for your help on this. The $6,000 is reported on Form 8606 as a nondeductible IRA contribution. I realize that she isn't allowed a deductible IRA contribution. However, is she allowed a $6,000 nondeductible contribution in addition to the SEP contribution? Does anyone know why the $594 2009 Roth recharacterization (code N on the 1099-R) is subject to tax on Form 1040 line 15b when the 2008 Roth recharacterization (code R on the 1099-R) is not? Thanks.

Client made 2008 Roth contribution for $3,450 and recharacterized it to a traditional IRA in 2009 due to income limitation. Client also made a 2009 Roth contribution for $600 and recharacterized it to a traditional IRA in 2009. The 2009 1099-R for the 2008 recharacterized contribution shows $3,413 Roth distribution code R. The 2009 1099-R for the 2009 recharacterized contribution shows $594 Roth distribution code N. The amounts reported as Roth distributions on the 1099-Rs are lower than the original contributions since the account incurred losses. Client also made a $6K contribution to her traditional IRA in 2009. Client is over age 50. Client's husband had wages of $214K and has a retirement plan through his employer. Client had $13K Sch C profit. Client also made a SEP contribution for $2,500. The ATX program reports the 2009 recharacterized Roth distribution of $594 on line 7 of Form 8606. Why is this? The ATX program is also reporting a portion of the $594 (Form 8606 line 7)as taxable income on Form 1040 line 15b. Why is this? The program isn't reporting this for the 2008 Roth contributions recharacterized in 2009. The client prepared and filed her own 2008 and 2009 tax returns but did not correctly prepare Form 8606. She wants help with the 2009 Form 8606. The 2008 Form 8606 shows nondeductible IRA of $3,450. The 2009 Form 8606 should show the nondeductible IRA contribution for $6,000 as well as the $3,450 nondeductible amount from 2008. However, I'm not sure why the program reports $594 on line 7 of Form 8606. I want to make sure the Form 8606 is correct before I get back to the client. One last question - can the client make a $6K traditional IRA contribution in addition to the $2,500 SEP contribution? The ATX program is allowing this. However, I thought an IRA contribution was not available if the TP has a retirement plan through their employer, including a SEP for their business. Thanks for your help.

Yes.

S Corp TP has beginning basis of zero and a prior years loss carryforward of $291K. Current year income, and increase in basis, is $164K. TP also took distributions for $332K resulting in $168K distributions in excess of basis. Year end basis is zero. I will report the $168K excess distributions on Sch D subject to the LTCG rate of 15%. Is this normally how excess distributions are recorded? The ATX Basis Statement shows the total income items for $164K and the $291K prior years loss carryforward. However, at the bottom of the Basis Statement the loss carrover still shows $291K. Shouldn't the loss carryover be $$127K which is the $291K p.y. loss carryforward less the current year income of $164K? Has anyone else experienced this problem? What do I need to do to show the correct loss carryover? The TP should not be taxed on his 1040 for the current year income of $164K since he should be allowed to offset the income by the p.y. loss carryforward. Thanks for your help.

LLC has 4 rental properties - commercial and residential. Rental properties are the only activity for the LLC and all revenue and expenses are reported on Form 8825. In 2009 one of the LLC members loaned money to the LLC. The explanation was that the LLC needed funds. A note is in place and interest and principal payments have been made by the LLC to the member. I think the interest expense should be reported on the 1065 as guaranteed payments- line 10. However, is this interest considered loan interest used for the operation of the rental properties? Therefore, should the interest be reported along with mortgage interest on Form 8825? Thanks.

Thanks so much for the information.

Hmmmm is right. Why does the ATX site say that only one drain a day at 11 am local time will be done by the IRS?

Since the IRS is only doing one e-file drain per day at 11:00 am does this mean that if a corporation or partnership tax return is not e-filed until 5 pm, that the return will be cosidered filed late? Or will the time stamp show that the return was set up for e-filing before the midnight deadline and the IRS will consider the return timely filed? If not, then that is a bummer not getting the normal midnight deadline. Thanks.