David

I never filed Form 8606 for the TPs. The previous CPA did. Instead of filing Form 8606, I would have advised them to withdraw their contributions before filing the 2004 tax return. Also, since there was no "earned income" (subject to self employment tax - remember they had no W-2 income and had S Corp income)they were not eligible to make any IRA contributions. Form 8606 wouldn't be appropriate in this case would it? If they were not eligible to make any IRA contributions due to income limitation, then Form 8606 would be appropriate. Thanks for your help.

Thanks for your help on this. Where is the IRA adjustment line in the ATX program? Isn't the only way to do this in the ATX program is to not show an amount in box 2a as taxable amount? Also, I will be filing an amended 2008 tax return to exclude the amount of IRA taxable income since the original tax return was filed showing the correcting distribution as taxable and also showing the distribution as subject to the 10% penalty. This is because of the distribution code 1 on the 1099-R. In this case, maybe all I need to do is change the AGI and the other taxes line on the 1040X to reduce the tax distribution amount and the 10% penalty? Is my thinking correct on this that none of the distribution is taxable since the TPs are pulling out the excess contributions made in 2004? Remember, the TPs never realized they had excess contributions since they were never told by their tax preparer. They would have pulled the amount out of their IRAs back in 2005 if they had known. Thanks.

The TPs DIDN'T know they had excess contributions. Their previous CPA didn't tell them anything and continued to assess the additional tax. It was brought to their attention by me when I picked them up as new clients. Again, since they never took a deduction for the excess contributions the correcting distribution is not taxable. How do I report this so the TPs aren't taxed since the 1099-R shows code 1? Do I simply leave box 2a (taxable amount) blank even though the 1099 filed with the IRS shows an amount in that box? Thanks.

Wouldn't the correct code be 8 since the excess contributions were never deducted? Yes, it would be best if a corrected 1099-R was issued, but the financial institution won't issue one.

Taxpayers withdrew excess IRA contributions in 2008 for excess contributions made in 2004. The excess contributions were not deducted in any prior year and the 6% penalty was assessed in prior tax years. The excess contributions was a result of no "earned income" since the AGI was from S Corp profit and no officer compensation was reported. The excess contributions were reported as non-deductible IRA on Form 8606- I don't think this is correct, is it? The financial institution issued a 2008 1099-R with distribution code 1. The financial instituion will not issue a corrected 1099-R with the correct code. Since the 1099-R has been issued to the IRS with code 1, doesn't the distribution and the incorrect code have to be reported in the TP's return so it will match the IRS records? How is this corrected in the tax return in the ATX program so that the distribution isn't taxed? I don't see an option to correct this in the 1099-R input section. Thanks.

The IntelliConnect link no longer appears on the right side of the MyATX page. Is there another way to get to the program? Usually ATX tells us if there is a change but I haven't seen anything. Thanks.

Does anyone know if we have the planning section in our new tax research program that replaced Kleinrock? I can't find it anywhere. I thought the new research program was supposed to be a lot better than Kleinrock. I still get zero results when doing searches. Thanks.

I have never been able to get the bulk disposition feature to work in ATX and the directions don't seem to help. When I set up a rental property, I will have several categories set up in Asset Entry - home, land and improvements. When the client sells the property, it would be nice to have a quick feature that will combine these categories so the sale price will be automatically allocated and the gain or loss for each category is calculated properly. I always have to manually allocate the sales price in order to calculate the gain/loss for each category. I'm sure that what I am attempting to do is supposed to be the purpose of the bulk dispositions feature, however, it never works for me. Can someone tell me how you are able to get the bulk disposition to work? Thanks.

Ok, I sure will. Thanks for your help.

Margaret, So far everything seems OK except that the trust ID # isn't carrying over to the K-1 - everything else is which is strange. I guess I can override the space and enter the ID #. I just added the info sheet and it got rid of the 1041. It kept all of the interest, dividends and other information I had already entered. Thanks for your help. David

I am preparing my first tax return for a Charitable Remainder Trust. Form 1041 does not need to be filed. Instead, Form 5227 needs to be prepared. Even though I have entered the trust name, ID # and other information on form 5227, the name and ID# is not carrying over to other forms or schedules such as Sch D, 1099-R, etc. If I open a Form 1041 and input the trust information then the trust name, ID#, etc. shows up on the other forms or schedules. However, then the income and expenses on form 5227 are duplicated on the 1041. Also, without form 1041 in the tax return, there is no option to e-file the Form 5227 and other forms/schedules for the CRT. Is a CRT tax return not able to be e-filed or do I need the form 1041 included in the tax return in order to e-file the return? This doesn't seem correct since the income and expenses are duplicated on form 1041 and form 5227. How does ATX handle filing a form 5227 and related forms/schedules for a CRT? Thanks.

Are we able to e-file corrected 1099-MISCs? I have always e-filed 1099-MISCs for clients and have never paper filed them before. If I am not able to e-file the corrected 1099-MISC, can I use the 1096 form from the ATX software? Or does the client have to use the preprinted 1096. For some reason, I remember years ago that a paper filed 1096 had to be on the IRS printed form. Thanks.

Well, that is exactly how the 1099-B detail lists it and it does have a notation stating that it is a short sale. Thanks everyone for you input. I will simply change the type as a regular sale.

All of the dates acquired are before the dates sold and the data entry is exactly per the broker detail information. Also, all are short term gains or losses. Have you had short sales before and were able to e-file the return? Did you enter the short sale code 14 or leave the code as non-business gain or loss? Is my only option to leave the transaction type as code 1? It doesn't make sense that there is a transaction type code for short sale but the return can't be e-filed if you use it. Thanks for your help.

I am getting a message that I have to paper file a 1040 because Sch D includes some short sales. What is the problem? This doesn't make sense. Have any of you been able to work around this? All of the short sales happen to be short term gains or losses anyway. Instead of putting code 14 "short sales" for the transaction type, would it be a problem to use code 1 "non-business gain or loss"? Or will this raise a red flag with the IRS since the 1099B indicates short sale? Thanks.

The 2007 depreciation amount was only $135 and the total tax return was a loss. So I'm wondering if it makes sense to file and charge the client for an amended tax return. My question is related to the error message we get when the client's prior year balance sheet for assets does not match the asset values per the asset manager. What is the best way to handle the beginning asset balance? For those of you who have had this problem in the past, have you just changed the beginning asset balance on the balance sheet or did you just file with the error message? Will the tax return be able to be e-filed with the warning error message? Thanks.

New client has a real estate partnership. The previous accountant overstated one of the rental properties by ~ $34K. A small amount of depreciation was reported on the tax return since the property was purchased 12/07. I am making an entry in 2008 to correct the value of this property. What is the best way to correct this on the asset manager and 2008 tax return without getting the error message that the beginning balance sheet asset does not match the asset manager? Thanks.

Do we have 5 business days or 5 calendar days to correct e-file errors? Thanks.

I noticed there are two lines for the trust name on the SS-4. The second line says TR UTA December XX, XXXX I tried again using only the first line of the trust name. Could this be the problem? Thanks.

Thanks everyone for your help. I check the name control and it is the first four letters of the last name listed in the trust. Any other ideas as to what is going on?

What's with trust tax returns being rejected because the name or ID # doesn't match the IRS database. I have entered the exact name and number on the SS-4. After that, I have tried different variations of the name. The e-file has been rejected now for 4 variations of the name. What do you have to do to get these returns accepted?

New client had a SMLLC business reported on Sch C in their 2007 tax return. During 2008 they switched to an S Corp. For those of you who have had this situation, do you see a problem with filing an 1120S for all of 2008? Or is it necessary to file a Sch C for part of the year and an 1120S for the rest of the year? Thanks.

TP pays child care for child who lives with him. Ex wife claims the child. The instructions for Form 2441 seem to indicate that he can take the child care credit for this child since she lived with him for most of the year. However, I can't find in the ATX program how to list the child as a qualifying child on form 2441. It ssems as though the child has to be listed as a dependent before the program will allow the child care credit to be taken. Has anyone done this before and figured out how to input the information? Thanks.

Yes, I checked the box for simple trust and it is populating DNI. I thought the $300 exemption would reduce the TP's taxable income on the K-1 but I guess the exemption is only for the trust. Thanks.

Well I must be getting brain fry. TP is required to file a tax exemption trust income tax return. Income is required to be distributed to the beneficiary who is a surviving spouse. The only income is $400 for storage fees- she rents space for people to store their collectible cars. The K-1 is showing all of the $400 as taxable to the TP. Shouldn't $100 be the amount that is taxable income on the K-1? Doesn't she get the benefit of the $300 exemption? Thanks.