Yardley CPA

In an earlier post (copied below information from that earlier post) I indicated a partnership was looking to dissolve. It's actually an LLC. Would that make any difference to the below scenario: Newer client. He and his wife were in a Pennsylvania partnership with one other individual (we'll call the individual, Joe). They have one rental property. A small amount of income and expenses are paid through the partnership for the property. All income is distributed and expenses paid equally to each partner (1/3 to Client, 1/3 to Client Wife, 1/3 to Joe.) All the partners equally contributed $100,000 each ($300,000 in total) to purchase the rental property. They would like to dissolve the partnership and continue renting the property in the same fashion outlined above. I assume they would both attach a Schedule E to their respective returns when that happens? I have very little experience with partnerships and would appreciate any input. I have found the forms needed to obtain a tax clearance certificate from Pennsylvania. It indicates that a distribution of assets schedule and a copy of the federal Schedule D must accompany the application of tax clearance. Since they would like to continue renting the property together after dissolving the partnership, what assets are being distributed? What would be on Schedule D? Thanks for your input! Appreciate anything you can share to help me.

Arrived at work this morning and received my AICPA Tax E-Alert. Within the email was: The IRS will close the PTIN and EIN systems at the end of the year, so act now if you need to use these systems. I renewed my PTIN last night. Wondering what happens if you don't renew by the end of the year? Are you still able to transmit returns? Does the IRIS penalize preparers who do not renew? In any event, Merry Christmas and a happy and healthy new year to all members of this great community!

Thanks, JKL...we will continue with the partnership.

My apologies. I meant to say the husband/wife would include a schedule E showing 2/3 ownership on their personal return and Joe would include a schedule E on his showing 1/3 ownership. Based on CBSLEE's post it sound like that can't be done? Thank-you again.

Newer client. He and his wife were in a Pennsylvania partnership with one other individual (we'll call the individual, Joe). They have one rental property. A small amount of income and expenses are paid through the partnership for the property. All income is distributed and expenses paid equally to each partner (1/3 to Client, 1/3 to Client Wife, 1/3 to Joe.) All the partners equally contributed $100,000 each ($300,000 in total) to purchase the rental property. They would like to dissolve the partnership and continue renting the property in the same fashion outlined above. I assume they would both attach a Schedule C to their respective returns when that happens? I have very little experience with partnerships and would appreciate any input. I have found the forms needed to obtain a tax clearance certificate from Pennsylvania. It indicates that a distribution of assets schedule and a copy of the federal Schedule D must accompany the application of tax clearance. Since they would like to continue renting the property together after dissolving the partnership, what assets are being distributed? What would be on Schedule D? Thanks for your input! Appreciate anything you can share to help me.

I installed a mail slot on the wall of my garage. It has been great for me and allows my clients to drop off information at their convenience.

I know the ATX program provides a 1040 comparison between the current and previous year (showing number and percentage differences), but is there a report/form that provides a detailed comparison of a Schedule C (or Schedule E). That would be nice to have as well. I don't think there is but figured I would ask.

Thanks for the feedback. I was planning on filing but wanted to get your thoughts. Since the extension is filed it would just make things more clean to file the return. In regards to the paperwork, chances are good we'll probably amend this return as other stuff is sure to flow in after its filed.

New client came in late in the season and I ended up filing an extension. Client did not have all the paperwork and told me he normally filed extensions in the past when he was unable to file by April 15th. He finally brought me all the info and after looking through it over the past couple of days, I determined he does not need to file a 1040 (income is below the limit). Since the extension was already filed, is it necessary to now file the 1040? Thanks!

Thanks for the reply.

New Jersey Resident. Taxpayer has Florida single family home that they began renting on 1/25/2014. Basis (net of Land) is $72,380. In ATX I loaded the information on the Asset Screen as: R - Real Property 4-27.5 Res Rental Rel Estate New Asset: Yes B-Bldgs and other depreciable asset Bus percent 100 Recovery Basis is $72,380 Recovery Period: 27.5 years I've chosen 200DB Method, MM Convention for Federal. I've chosen 200DB Method, MM Convention for Federal AMT Ive chosen SL/GDS Method, MM Convention for New Jersey Fixed Asset screen calculates the same current year depreciation for all three methods, $2,522. Is that correct? By Choosing R-Real Property and 4-27.5 Res Rental Real Estate, shouldnt the system automatically choose the correct Method and MM for Federal, AMT and State???? Any input is greatly appreciated.

Thanks, Jack.

This may have already been discussed but now that the Supreme Court has legalized same sex marriage in all 50 states, is it safe to assume we will be able to file jointly in all 50 states as well?

Thanks for your replies. Based on your feedback, it sounds like they should be listed as wages within Part II of the Schedule C and not in the COGS section. I'll place them there (fingers crossed it doesn't raise anyone's eyebrows at the IRS since I placed them in COGS last year.) So here's another question, also listed on the Schedule C, Part II Expenses is "Contract Labor" on line 11. It was on this line that I was going to include the amount paid to the one subcontractor that the Landscaper uses (we did issue a 1099 to that person). Would that be correct? Thanks again for everyone chiming in!

I have a Schedule C Landscape Business as a client. This was a return that was extended and I've begun working on it. When I prepare the Schedule C, I list employee payroll as "Cost of Labor" in the Cost of Goods Sold section. Want to make sure they should not be listed as "Wages" in Part II Expenses section. The business does not offer any benefits or 401K, just payroll...so I'm wondering if the payroll should really be listed as wages? Thank you!

Great post, KC!

Received email from one of my clients asking for assistance. Her mother lives in a memory care facility. Her brother has POA for the Mom. The Mom has a 401K plan and they would like to use those funds to help offset the cost of the care. The bank holding the 401K will not disburse any funds from the 401 to the POA. I am unfamiliar with this type of situation and was hoping some of you can lend some advice. I assume there would need to be some legal intervention? Any ideas on where go to? Possibly directly to a lawyer?

Lots of food for thought and all of this information underscores the importance of being informed and making the right decision for your practice. Thanks to everyone who chimed in! Have a good weekend.

I do not have E & O either. I did not realize that E & O would cover what Sara mentions above. To Jack's point, I was under the impression that scenario would fall more under a general liability policy versus E & O. I always thought E & O covered "error and omissions" on a tax return and provided some sense of security in the event a client brought a claim against you. I didn't think it covered any type of theft or loss of content.

Wondering if anyone practices without having an E&O Policy?

Anyone know when the IRS will offer the PIN for the 2015 filing season? Not looking to rush things here considering we just got through tax season; just want to prepare and send a letter to my clients suggesting that they obtain the PIN for the coming year. I had one client experience a fraud and want to try and ensure this does not happen to any of my clients as we move forward. Currently, the IRS website still reflects 2014 information: http://www.irs.gov/Individuals/Electronic-Filing-PIN-Request

I see OLT has its on topic listed at the bottom of the ATX Community home screen. I'll look through that.

Has anyone used OLT Pro Tax Software? If so, what were your thoughts? Received a flyer indicating a cost of $399 for web ($499 for desktop) for "unlimited returns" including personal and business. I've already renewed with ATX but was curious as to the capabilities of this program. www.oltpro.com

I agree with cbslee. I'd write a letter to the IRS and provide the information you provided here. The worst they can do is say no.

We'll look around and see what we can find. Thank you again for all your efforts!