David

Can we e-file an amended 2007 1120S? I know we can e-file earlier years for corporation tax returns but I'm not sure if amended tax returns can still be e-filed. There was nothing regarding this on the ATX Knowledgebase. Thanks.

Thanks for your help. I guess I may have been looking at this incorrectly. Since the primary purpose of the LLC is to provide funds to clients to purchase, rehab and sale/rent properties, I thought only the return on the loans was considered revenue. Since the LLC also purchased, improved and sold 3 properties in 2009, I thought this was reported as sale of properties on Form 4797. Since the top section of Form 4797 asks for the gross proceeds from sales reported on Form 1099-S, I thought Form 4797 was the appropriate way to report the gains from sale of these 3 properties. Now I'm wondering if the gain from the sale of the 3 properties is really subject to the SE tax. Since the sale of properties is not the primary purpose of the business are the gains from selling the 3 houses really subject to the SE tax? I just don't want the client to pay more tax than he should if the gains from the sale of the 3 houses shouldn't be subject to the SE tax. Thanks.

Ok, so how should the property sales be reported on Form 1065? Is the gain from sale of these properties subject to the SE tax? If so, where does it get reported so it shows up in SE earnings? Thanks.

LLC business provides funds for clients to rehab properties and when these clients sell the properties, the LLC gets a return on the funds provided. Real estate funding is the main business purpose for the LLC. The LLC also purchased and rehabed 3 properties and sold the properties for a gain. When I reported the gain from the sale of the properties on Form 4797, the K-1 excludes this gain from line 14, self-employment earnings. The gain is properly reported on line 6 of Form 1065 and the return on funds provided is properly reported on line 1 of Form 1065. Both the returns on funds provided and the gain from the sale of properties is properly reported on Sch. K-1, line 1 ordinary business income. I thought the gain from sale of the properties is subject to the SE tax since the property sales are part of the LLC's business. Why is the ATX program deducting the gain on line 14 of the K-1 schedule? On the detail - items tab for the K-1, the formula for line 14 is subtracting the gain shown on line 17 of Form 4797 (ordinary gain) from the SE earnings amount. Is this a program glitch? I thought any gains reported on Form 4797 was subject to the SE tax when reported on Form 1065. Can anyone clarify what is going on? Thanks.

OK, I see the problem. When the health insurance premiums are entered on line 10 as guaranteed payments (line 2 of the input screen)this amount is not carried to box 4 of the K-1. However, it is carried to box 13, code M of the K-1. I wonder why the ATX program carries it to box 13 but not to box 4. Is this a program fluke that made it all the way through tax season? Thanks.

It doesn't seem as though the ATX program is handling partner's health insurance premiums correctly for the K-1. The orinary income reported in box 1 on the K-1 is already net of the health insurance premiums paid for the partners. The health insurance premium is also reported on line 13 M of the K-1. When the K-1 is carried to the 1040, it is allowing the health insurance premiums to be deducted on line 29. It seems as though the health insurance premium is already reduced from the partner's taxable income and from his self-employed earnings. So I don't see why another deduction should be allowed for the health insurance premiums. Usually, the program is right and I am not looking at things correctly. That may be the case in this situation but I thought I would double check to make sure. Can anyone shed some light on this for me? Thanks.

TP received a 1099-MISC for $5K reported as nonemployee compensation box 7 on a 1099-MISC. He told me this was for stock options paid out when the company was sold. He had this in a prior year and his tax preparer reported it on line 21 form 1040 as other income and subjected it to SE tax. Shouldn't this be reported on line 7 as wages? I'm not sure this is subject to SE tax. I can't find anything in the Intelliconnect research program that says whether this would be subject to SE tax. Kleinrock had a wage finder feature that listed the various types of income and how the income was reported - e.g. subject to FICA and medicare. I can't find a feature like this in Intelliconnect. Does anyone know if there is a "wage finder" type feature or if Intelliconnect has a section that shows how various type of income is reported? In the meantime, I need to know how to report the information on the 1099-MISC and whether I subject the income to SE tax. Thanks.

Linda, thanks for your help on this. If I click on help when I am in that field, it gives me the menu for program instructions, government instructions, etc. What button are you referring to that will specifically address what goes in the field on the disposition sheet? Thanks.

Thanks everyone for your responses. Yes, I know I need to take actual cost less depreciation to calculate the gain/loss. My question is how do I adjust the depreciation basis to actual cost basis in the asset disposition tab in the ATX program? Do I just add the additional value to the basis adjustment line of the disposition tab or is there a better way to do that. Thanks.

OK, let's try this again. I posted this the other day and no replies, just views. I guess no one has ever had this problem or no one is crazy enough like me to use a low FMV for rental property (based on comps) vs. using cost for the depreciation basis of the property. Here goes again - Client received a 1099-A for rental property that is going back to the lender. When we set up the depreciation basis we used a much lower FMV amount (based on comps) than the amount he paid for the property - he originally used it as his principal residence. When I calculate the gain, the basis, less depreciation, should be adjusted to represent his cost less depreciation. The much lower FMV was only used for depreciation puposes. surely, the gain from abandonment shouldn't be the principal amount outstanding less the adjusted basis based on using the much lower FMV for depreciation purposes. How, in the ATX program, is this handled? The only way I see to adjust this is in the disposition tab line 13, basis adjustment. Is this the correct way to handle this or is there a better way in the ATX program? Thanks.

I must have not been clear in my previous post. There are 2 children with different amounts of investment earnings. Their OTHER CHILD, not the same child that had $5K of stock sales, had $300 of dividends and interest. Since this is less than $950, no tax return needs to be filed for the OTHER CHILD nor does the $300 of dividends and interest need to be reported on the parent's tax return - correct? Thanks.

lYNN, Thanks for your response. Their other child only had around $300 of dividends and interest. Since that is less than $950 they don't have to report this child's dividends/interest on either the child's or the parent's tax return - correct? Thanks.

TP's minor child received a 1099 from their broker with ~ $300 of dividends and $5,654 of gross proceeds from sale of stock. The stock sale generated ~ $2,700 of loss. Does this need to be reported on the parent's or the child's income tax? I think if nothing is reported and this is ignored, the TP will receive a letter from the IRS. Thanks for your help.

Client received a 1099-A for rental property that is going back to the lender. When we set up the depreciation basis we used a much lower FMV amount than the amount he paid for the property - he originally used it as his principal residence. When I calculate the gain, the basis, less depreciation, should be adjusted to represent his cost less depreciation. The much lower FMV was only used for depreciation puposes. surely, the gain from abandonment shouldn't be the principal amount outstanding less the adjusted basis based on using the much lower FMV for depreciation purposes. How, in the ATX program, is this handled? The only way I see to adjust this is in the disposition tab line 13, basis adjustment. Is this the correct way to handle this or is there a better way in the ATX program? Thanks.

Thanks everyone for your help. I tried creating the 1040 EF Info but not setting it up for e-filing. However, it seems like everything (EFIN and direct deposit info) all linked back to the 1040 EF Info. The error message said that the direct deposit info had to come from the 1040 EF INFO, and then the client letter would still say a check was being mailed. Everything was not linked until I got rid of the e-file forms. I didn't have this problem last year. What changed? Any other ideas?

I would still like to e-file state tax returns for the first time homebuyer federal returns that have to be paper filed. Last year we were able to paper file a federal return and still e-file a state return. This year I can't seem to be able to e-file a state return if the federal return is paper filed. The state EF Info wants my EFIN. I try to hard key (override) but it will only accept the EFIN from the 1040 EF INFO. I can't seem to get around this so I have just paper filed both federal and state. Has anyone figured out how to e-file just a state return and get around the EFIN issue? Thanks.

This is my first Sch D for an S Corp. In addition to normal stock sales the client also has option puts and calls. How is this filled in on the 1120S Sch D? The transaction type doesn't have as many listings as the 1040 Sch D and there is no transaction type listing puts, calls or expired options. BTW which transaction type should be used for normal stock sales and which transaction type should be for puts and calls? Thanks for your help.

I can't find anything on the knowledge base that addresses this e-file error. I have an IRC 1341 credit on line 70 of form 1040 for a repayment of amounts under a claim of right which was included in a prior year taxable income. I followed the directions in pub. 525 and have the credit listed on line 70 with "IRC 1341" noted beside that amount. When I tried to create the e-file, I received the following error message - Error: IRS E-file Exclusion: Amount of other payments must equal the total from the 2439 input worksheet and Forms 4136, 8801 and 8885. It appears that the program expects one of those forms to be completed if an amount is included on line 70. However, none of those forms apply to this type of credit. Furthermore, pub. 525 doesn't say that a certain form needs to be coompleted for this credit. Does anyone know how to handle this issue so that the tax return can be e-filed? Thanks.

I would like to have 2 different client letters available to insert into tax returns. One letter with my customized letterhead information typed at the top for those tax returns that I email. Another letter with no letterhead information so the letter can be printed on my letterhead for hard copy tax returns. Has anyone figured a way to get this done? If not, how do you handle this without having to add the letterhead information on each letter for tax returns that are emailed? Thanks.

When I click on Enrollment Center Fee Collect in the Support Center, my correct information shows up and the status says "at the bank". I am guessing this is because of the switch from SBBT to Meta Bank? Does this mean that I am automatically enrolled for the 2009 tax season and we are waiting for the approval to the new bank? Or do I need to enroll again this year? If so, where do I enroll again? The create/modify your enrollment form still shows SBBT. Is this the correct form? I rolled over a tax return that used fee collect last year and the fee collect form references Meta Bank. Does this mean that I am enrolled and set to go? Also, is the fee still $15? I noticed there appears to be some mention of an additional $11 fee to CCH but I'm not sure if that is for something else. Thanks.

I am preparing 4th quarter employer reports. The 941, state withholding and state unemployment reports for 2009 are prepared in the 2008 tax program. However, unlike last year, I can't find the 2009 version of Form 940 in the 2008 tax program. As far as I can tell, the Knowledge Base says that the Form 940 for the 4th quarter of 2009 is prepared in the 2008 program. Why are the other 2009 reports in the 2008 program but the 2009 Form 940 isn't? I updated the 2008 program, just in case anyone asks. How have others of you prepared form 940? I would like to be able to prepare it in the 2008 program so it is included with the other reports in the client instructions. Thanks.

Are the organizers done the same way in the 2009 program as in prior years - customize in 2009 program and create in 2008 program? This isn't addressed in the program instructions nor in the knowledge base. Thanks.

I don't recall that we have to re-enter the preparer information each year. It seems as though the preparer information rolled over automatically from the prior year program. Did this change for the 2009 program? The preparer information is blank. What do I need to do to have the preparer information automatically show up in the preparer manager tab? I did check rollover preparer and ero information in preferences. Thanks.

i did READ THE INSTRUCTIONS. That's why I am saying that the Form 8606 should have never been filed for the excess contributions.

Each TP had excess contributions of $3K in 2004 and $4K in 2005 for a total of $7K each.