Tax Prep by Deb

KC I do have a bit more info. Client contacted lender and all that they could say is that they were required to furnish IRS this information. She did in fact get a copy from the lender of a 1099C that shows the amount of the debt cancelled as well as the fair market value of the property at the time of cancelled debt. It is my understanding that the loan was an interest only loan. But that leads me to another question. This was the original loan used to purchase the home, it was never re-financed ect.... Were they writing loans for purchases that were interest only? Does anyone know? I don't have the 1099C in front of me tonight, but I will let you specifically some figures, and if anyone can give me direction on what to do next I would sure appreciate it. I knew I would be getting some of these foreclosure situations, and am sure when I do one or two I will feel more comfortable, until then I would really appreciate some help! Thanks, Deb!

She was current until around February of 2008. She was notified that the townhouse would be sold at auction at a future date. She has never received anything stating when or if the auction has taken place or whether or not the property has been sold. What estate? This was a single lady who walked away from the property and it was foreclosed on. We do not know were the $21,000.00 in interest has come from. If she had re-financed I would assume part of it was due to a pre-payment penalty, but this was not the case. Deb!

It was a nonrecourse loan I'm sure, but will have client double check. What I really question is the 1098 that listed 21,000.00. The lender was Chase Deb!

It's been over two days since I received any acknowledgments from California has anyone else gotten any? Deb!

Name of town withheld .... I wish I could say that we are famous for something, but here was all I can come up with: 1. Wind, Fog, and horrid summer heat! 2. A city council that is so divided that they will never be able to do anything. 3. A massive amount of foreclosed homes and absolutely no work! I live in a small town in the Central Valley, and don't get me wrong I do not hate the area, I just don't love it either! Deb!

I have a client who when she picked up her taxes last year told me that she was going to let go the town house she purchased and let the bank foreclose on it. She made 1 payment in 2008 and sure enough it looks as though they have foreclosed on it in August of 08. The only paperwork my client has received is the notices of foreclosure. She has received no 1099 of any kind except a 1098 from her lender for mortgage interest that they say was paid on the loan in 2008. The amount that is on the 1098 however is over 20,000.00. We both know she didn't pay that but our question is how do they figure it, is it deductible for her, are we missing pieces to this puzzle? Hopefully someone can give me some insight. I knew I would be dealing with a lot of foreclosure type issues this year, however this one is a bit confusing to me. I have advised the client to call the lender and try to get some clarification herself. But if anyone can give me some additional info I would surely appreciate it! Deb!

Me Too! Deb!

What they forgot to mention was the errors they found were ones they made themselves (haha) Deb!

I've been meaning to post the same info, just got swamped today and didn't have a chance. But that is really a handy tool being able to go right from within the program. Thanks for posting! Deb!

I agree. I searched to try and find where this was coming from and the only mention was on the ATX site under bank issues. From what I read this credit is not automatic we must request it, so I was very leary of omitting it from the return per suggested! Deb!

On line 7 of 1040, use the bunny hop and there is a place to include the income. Then you will need to file Form 4137 to report the social security and medicare tax Deb!

I just received all my CA acknowledgments. So it looks like CA is now up and running! Deb!

I am soooooooo verrrrrry glad that someone just mentioned this. I had just completed a return by which my client was just under for itemizing her deductions, but by going to the worksheet and claim the real estate taxes paid she was able to receive a larger refund than what I had previously told her. I love this board and the help extended to each other! Thanks again, Deb!

For those wanting to know where the info came from it was the MYATX website under bank issues. I agree with TAXBILLY, I saw the exact same wording as he did that if it matches all is well. It's just when it doesn't match with IRS that it will be hand processed and therefore take longer. But if we use the correct info all should be ok? Deb!

This was posted on the official ATX site and I was wondering if any of you have heard it or know anything about it? "Yes they are going to hold up returns that have anything other than a zero on line 70. The IRS sent us something on Friday that said they were having to many returns calculated incorrectly for the RRC. Therefore if the return has anything other than zero on line 70, they will hold the funds until they can manually calculate these returns for accuracy. The delay they said could be from 8 - 12 weeks. SBBT & Republic banks are denying all RAL's with anything on line 70 other zero also. To keep from having these delays and denials, the IRS and the banks are suggesting that you fill in the worksheet for the RRC with the maximum amounts so that line 70 will be zero. If the cllient is actually entitled to a RRC (i.e. added a dependent, etc.), the IRS will recalculate the return and send the client the RRC separately."

The only thing new about this message is the date. They posted the same thing last week, yet still no acks here in CA. Deb!

Thanks to All who responded! I agree hands on is the best teacher, I would just like to know a little bit more before I under take the task. I like to come across to my clients that I do know what I'm talking about. I will look at the reference books you sighted and I have considered a course at our community college. Thanks again for your thoughts! Deb!

Thanks ERC! At first my heart gave a lurch, but then I remembered same things happened last year! We've grown to love and respect this site and those who post here! Deb!

Out of curiosity I checked it out, pretty lonely over there! Deb!

Just received an e-mail concerning missing acks for CA, (actually my screen shows they've not been sent to agency yet) and I received a reply that the issue has been addressed on the MYATX website: updated 1-23-09--state acks--We are receiving Acks from state agencies now and are beginning to send those acks to customers. We step through each new state manually for the first few acks to make sure the files received comply with standards and process correctly. Most piggyback states acks we?ve received will be out to customers today. We?re working on states that use non-standard ack systems, including MA, CA, IL and OH. These will begin processing in the next day or so, and we expect to have all acks on autopilot by early next week. We have heard that both AL and CO are having issues getting Acks through to developers, but both states are actively working to resolve this issue. CCH SFS does not consider state acks late until 5 days after the federal accepted ack. At that point we research all returns missing acks and coordinate with the state agency to re-acquire all outstanding acks. Just thought you might want to know! Deb!

My experience with tech support this year has likewise been a wonderful experience. They are so much more knowlegeable with our program this year. It is a big improvement over last year. Deb!

I also see the message you are referring to. I don't believe it means a things and it has not prevented me from e-filing or receiving acks. I think it's just a quirk the same as me having to go and change my 1040 e-file info form to indicated NO bank products. That is annoying! Deb!

Take a look at your preparer tab and verify the info there. Sounds to me like maybe you have something invalid entered on the EIN tab. I'm a one person office so I don't enter anything on the EIN field, but rather I have a PTIN number that I use in the appropriate field. Hope this helps! Deb!

Yes, I have studies that publication extensively. I do have one client that I prepare a 1065 for and everything is small enough that I don't do the balance sheet, but I would like to feel comfortable in preparing more extensive partnerships. I have likewise done a very small corporation return whereby the CPA who prepared it likewise did not do the balance sheet, so I followed his pattern and feel O.K. with that one as well. But again I would like to feel good about doing one that is more detailed, but would prefer learning before doing! Deb!

Exactly! Deb!