Tax Prep by Deb

I've had a couple of communications with them, and the feel I get is like back in the good old days with William Tasker and the others that helped us so often. I was very impressed! Deb!

Well I took the plunge today! I signed up with TRX. So far with all the communication going on with them on this site, especially Braeden, it reminds me of the good old days with William and ATX. William was easily accessible and I feel that way with the various ones from TRX that seem to be on top of things and have tried to keep us informed on this site. There is a feel of personal interest and I like that. Only time will tell how things turn out, but the way things have been going with ATX they could decide tomarrow to no longer carry our program just like when they decided to shut down the old forum or when they laid off support staff for us last year. I'm ready to try something different, especially when I will be using the same program. I love the money that I saved! It's been a really tight year and I can use all the extra savings I can get. Deb!

So then, correct me if I'm wrong. The way I am understanding all of this is that this release, acknowlegment, or whatever you want to call it is basically just a statement that we understand we are being serviced by TRX and not ATX? I could understand this because if we purchase the software from you and then expect ATX to do something if there is a problem, there stand is that we didn't buy from them. Any problems we have with the software is to be handled by TRX and this is what we are acknowleging, and releasing ATX from? Deb!

You will need to designate one of the computers as the server. Uninstall ATX from the other computer, then you will need to map a drive to the server computer, navigate and find the ATX folder, locate the file netsetup and run it on you work station. I use this every year and have had only minor issues, (annoying as they may be) it has worked well for me. Deb!

I'm no expert, but I think the real problem is in the timing. 2003 returns had to be ammended along time ago. Had you caught it earlier I don't think there would have been a problem, but I think it's going to be difficult changing a return that old. Just my two cents worth, but then again, I'm no expert! Deb!

Likewise! It feels so good not to have to answer the phone! I did about 220 returns this year as a one person office. Most of those returns were done between January 15th and February 28th, and then I slew the last week before the deadline. I was in my office till 8:30 last evening waiting for one more person to drop off signed docs, just as I called and left a voice mail that I was calling it a night and would file an extension, (which I pushed the button to send as I hung up) she called back and said I'm right around the corner. I went ahead and sent the return through expecting perhaps a rejection because of the extension that I had just sent, but both went through. It did make me take a hard look at how I will do business next year on April 15th. I will not stay open just so these procrastinators can meet the deadline. Any return completed will have an April 14th deadline or it will be extended even if completed and just waiting for signatures! I would like to devote my April 15th to any NEW walk in clients, the rest will be on extensions. The point is I finally found out what my mom has been telling me for the past 16 years when I rant and rave about these late ones, that the more leadway you give them, the more they will take! Looks like I'm finally growing up and will let others take responsibility for themselves! At any rate it was a better than expected year for me. I expected my income to go down by about 50% because of the economy and so many of my clients lost their homes and moved out of town. But as it turned out I am about where I was last year and found so many new clients this year. Nothing feels better than to have someone refer a friend or family member to you, and this was my year for referals! I hope everyone has a very wonderful and prosperous rest of the year. As for me I'm taking the next couple of days off to catch up on a few things, then I will start up on my quarterlies, and try to catch up on some neglected bookkeeping. Enjoy the rest of the year! Deb!

For those of you who like me, have the program set to hold the state returns until the federal has been accepted, keep in mind that today is the last day to timely file returns. Because volume is going to be heavy do not expect the federal acknowledgments to come thru quickly. I have begun sending both federal and state at the same time. At least if they reject we have the additional time to correct them, and even if Federal rejects and the state doesn't, at least then we can ammend the state but still show it was filed timely. Deb!

Tom, I know for a fact that you will stay active on this board even on the off season. I read and respect your posts, and you've been a great help to me and others! Deb!

Oh My Goodness! I totally fogot payroll for one of my clients! Thanks for mentioning it in your post or I would have gotten a phone call from a very upset client! This board is wonderful in sooooooooo many ways! Deb!

I too want to say a big thank you to all and especially for this board. What I learn by reading the posts are far more valuable than any resource info out there. This board is packed with years of experience, and I really appreciate the fact that no question is to small or to big. You all are wonderful and I count it a pleasure to be apart of this family! Deb!

Done? Are you kidding? I have three new clients coming in today, one client from last year coming in this evening, and I am expecting at least two more from last year. I am never done until April 15th. And then there is all those extensions that I have already filed and it goes on and on and on and on and on! But I will be thinking about all those who are done, I would like to be done, but I like to eat too! So I will take on as many as I can before the deadline, then I will crash on April 16th! Deb!

I am counting the days, hours, seconds! This has seemed like a verrrrry long tax season and I am so ready for a break for my mind. I actually think my brain is hurting! Deb!

Thanks LindaB, I was hoping you would chime in on this. I had come to the conclusion this weekend that this is what I was going to do, but I really respect your imput on this and other issues regarding these foreclosure messes this year. I have paperwork in the clients folder that will substantiate our decision, providing of course the mortgage holder doesn't make any changes which they have indicated that under no circumstance will they. So at least I can wrap this one up, now just one more to go however this one will be much easier as it was their main home prior to foreclosure! Deb!

The creditor has been contacted and advised of the error's however there stand is that they will not correct it. The say it is what it is. Thanks for your reply! Deb!

This would be soooooo easy if only this was their main home, but about 9 months before the date of foreclosure they purchased a new home and moved into it. At the time of the foreclosure this was not their main home, at least the way I see it. As to the other ways to not to have to claim it as income, insolvency was my best bet however I can't make it all go away they will still be left with about 50,000 of cancelled debt. My point is that the mortgage company will not budge on the FMV even though it's easily disproved through comp sales and listings for same homes in the area. If I simply go with the figures on the 1099C it appears that the FMV of the home more than satisfied the loan balance, therefore as I see it their should be no cancelled debt. I would not have a problem at all if the form was a 1099A, I would report the sale and be done with it. But this shows a cancellation of debt, so I know I have to deal with it. Deb!

Any takers? Deb!

See Publication 17 Page 24 If this is a 2008 return they can if they do it before April 15th. If it's any other year they are stuck. They can go from MFS to MFJ anytime within the three year statue of limitations period. http://www.irs.gov/pub/irs-pdf/p17.pdf Deb!

I have been working on this one and going in circles. I would appreciate anyones thoughts! My client abandoned their home (Prior to doing so they purchased another home where they now live) In August of 08 their home was foreclosed upon and they received a 1099-C. The figures on the 1099-C are as follows: Box 2 amount of debt canceled $393,534.71 (of which I verified from lender's statement to be the actual amount owed at time of foreclosure). Box 7 FMV of property $416,748.00 which exceeds the amount canceled. My client challenged the FMV value as other homes in same condition and size are selling for less than $200,000.00 but the mortgage company says they will not change the value. My question is that because they are claiming the fair market value is more than the amount cancelled, do my clients have to include the cancelled debt as income? It seems to me that by the mortgage's own admission the property has more than paid the former debt. Again I want to emphasize that my client's year end summary clearly shows that the total amount due on this loan at time of foreclosure was in fact the $393,534.71. So therefore adding the box 2 and box 7 would be incorrect. By the way I am absolutely sure of this as I have every closing doc, ect... from the time they purchase the home, all of it's refinances, ect... up to the day of the foreclosure. Second question: If there is no cancellation of debt for my clients to claim, how do I handle this 1099C? Do i ignore it other than reporting the sale or do I need to do something else to show IRS that we have acknowledge the info? Thanks to all who may respond! Deb!

I have received so much help from this community so I am so glad I was able to help someone else! Deb!

I'm not sitting in front of my computer right now, but if I'm not mistaken there is a spot on the 1099R worksheet, (2a taxable amount, and then right below it you put the amount that was rolled over. Then it should include the full amount on the 1040 line a, but on the actual form it will show the correct taxable amount with the words rollover. Hope this helps., Deb!

When this happens, I do like all suggested. I peer over the return until I find the difference. Then I try to explain. If it is due to taking a pension prematurely, or some other one time thing I make that clear that this is just a one time hit and that everything should go back to normal next year. I will even pull the info out that is making the problem so that I can give them the figures both ways so that they can seen it was due to something not normal. Most of my clients appreciate this. If it is the first year for a client and they owe and I don't care if it's just one dollar, I usually do not get them back the next year. But if I have a client who walks in with a notice from IRS and I work with them, especially if I find errors on their return that will more than take care of the notice, I have them as clients for life even if the first year I do their taxes they owe. People are funny. The problem I have is distancing myself from their woes. But I have tried very hard this year as I have enough of my own woes to worry about! Deb!

KC, she is older but not old. As to confused, this poor lady doesn't have a clue. It's possible there is an insolvency issue, I am waiting for figures but when I asked for a list of her assets and liabilities she looked at me like what are you talking about. So I explained to her things that would be assets, and as for liabilities the only thing she owes would be whatever taxes this is going to generate. She is currently living with her youngest daughter and prior to this she lived with her older daughter. I believe all through her married life she was sheltered by her husband especially when it came to finances, and now that he has passed away she is relying on her children, not for support financially but in just about everything else. As to why she didn't try to sell it, it was sold as a short sale, and it sold for enough to cover all of the first mortgage and a tiny bit of the second. It's the second mortgage that issued the 1099C. Thanks for responding, Deb!

That also was my take on it. I do not know even if he paid her anything or paid the mortgage company directly until he decided he didn't want to pay any more. As to how long this has been going on, my client said that the house was purchased two years prior, so if it was foreclosed on in 2007 that means it was purchased in 2005. My real question is how do I treat this? It was not her personal residence, it was not a rental, could I go investment property and deduct the loss? If I could go this route it would offset the cancelled debt, but not exceed it. Any more thoughts? Deb!

Does anybody have any additional thoughts? Deb!

I guess it should have, and if I had been doing her taxes that's the way I would have set it up, but keep in mind that this lady didn't even know she was the sole owner until she came to me. It's when I sat down and looked at everything that she became fully aware of the fact that she did not co-sign, but rather she bought. She assumed both were on title and loan, and that within six months of taking out the loan, she would be removed and son would be sole owner. This was the lie that was fed her either by her son or the mortgage broker or both. So it has never been treated as a rental. As to investment property, this was sort of how I was leaning. Does anyone have a opinion if this would be possible? Deb!