ILLMAS

There is a box the you check off "CORRECTED" and yes she would have to redo all of them and re-issue them, however it makes no difference for the recipients that the received the correct one in the first place.

Thank you, I do have all that info of when I prepared the new basis, I just did not know where to start.

TP sold an investment property in 2006, he deffered the gain by doing a 1031 exchange and using about 100K as a down payment for another investment property. In 2010, he filed for bankruptcy and he forclosed on the property. Now since he deferred the gain on the sale back then, is the TP on the hook now for taxes on the 100K? Anyone?

Will verify with TP but I believe she was making deposits and checks from the corporate account, it seems she notified the state agency of the new corporate account but never changed from SS# to FEIN.

TP in prior year has run a daycare out of her house (Sch-C), last year she told me she had incorporated because another person who runs a day care recommended to her and even helped her fill-out everything needed to incorporate. I told her then, she had to open an account and start writing and depositing the money into the corporate account, today she brings all her paper work and she never notified the state agency to use her FEIN from the corp, so she has a 1099 under her SS# for subsidies the state paid her. Also, since she is a day care provider, another state agency pays her self-employment health insurance, however she was on the payroll for most of 2010 (on the corporation), she recieved a 1099 Misc for the value of the health coverage, last year I would report the premium under Self-Employment insurance and the 1099 amount as other income, basically it was a wash. I don't know if I should just include the health insurance premium as income only, and forget about the self employment insurance? Also, the day care 1099 is for a large amount, I already adviced the client to correct it with the state, however I know that the 1099 can be reported on the corprate return, then just straighten it out with the IRS when I notice comes, but I really don't want to that because I don't want to spend more time later on. I quit, no I have 3 more hours to go :(

IRS agents cannot prepare tax returns for others, they are breaking their own rules LOL :)

Materiality - Amending a client return for $20, $30,... $500 and to charge him a minimum of $150 to amend a return, you decide if it's worth it? Now here is the question to you, what do you consider materiality? Any where you look (books, IRS) there is not such amount as material, you have to make a reasonable judgement as to what is materiality. Last year one of my associates client was being audited by the IRS, you always want to know in what industry the auditor has work, in this particular case the auditor was a tax manager at a CPA firm prior to joining the IRS, once we knew his experience we knew he would want to see pretty much line for line of everything on the tax return. Well that was the case, we gave him support of everything he asked for, now this is a multi-million dollar company, meals of 30K for a +10M company were being deducted 100%, so we were trying to reason with him and telling him the amount was so inmaterial for the amount of revenue the company generated, and he said no, not to him and as the auditor he has the right not to agree with us. Anyway we talked to his supervisor and he agreed the amount was inmaterial in his eyes, but it was the decision of the auditor not let go of the finding. Now if you were get someone who was an auditor for an accounting firm, they have a better sense of what is materiality, because of the years they deal with it and have a better understanding. If I may add, the auditor was a real prick, the day he came to pick up the check for the balance due, the check included amounts for the shareholder and he asked me why the shareholders didn't make a check out from their accounts and if they were going to pay it back to the corporation, what the hell does he care, tax and interest was paid in full!!!

Form updates usually don't require a restart of the program, the restart thing is when there is an update to the actual program. Think of it as Windows update, critical updates require and full restart. MAS

As I suspected, well I will see what the client brings me tomorrow, but I did a google search and found this, it seems the IRS is so great other countries want to copy it: http://www.bir.gov.ph/about/about.htm

A client of mine, today recommend a friend of his, that wants to claim her 10yr daughter as a dependent that lives in the Philippines. He was telling me that they went to the IRS office and the agent told them it was possibly, they just had to fill out the right form and provide the supporting documents. I don't know if this is true, from what I remember the W-7 was for dependents in Canada and Mexico, but if someone knows what form, can you please let me know. Thanks MAS

Hello Tom, I am trying to figure why the vehicles are being depreciated beyond it's use life first? Or they they pickup trucks and campers were bought and the depreciation is for the campers? Or are you trying to match book depreciation to tax? You setup the vehicle as an asset on one of the rental properties, in the case you are trying to match depreciation between books and tax, don't break your head, just book the difference on Sch M reconciling difference. MAS

I think if her employer asked her to get rid of it with the condition of employment is discrimination, my wife works for large corporation and they are really serious when it comes to tattoos, don't show don't tell. I think she is trying to pull your leg and agree her with.

I have seen where the employer pays for uniform rental and laundry for example car mechanics and cooks, i would say NO if they require you to wear black slacks, tie and a white shirt.

Tomorrow I will confirm if this is indeed the case, two weeks ago I did a "what if" scenario for TP, I created a copy to project 2011 outcome with new salary. I will check the the original return and if I see the W-2 info has changed then it definitely a problem with atx, don't know the reasoning but I hope it's a good one. Now that you mention that Pacun, in 2008 I amended two returns to include dependents after itins were approved. I rolled over the amended return because they included the dependents, and guess what they were gone, had to re-enter them again, I just thought I didn't same them.

Today I had one of those TP what wants to know much is his refund, if had not gotten married and included his wife's income. So what I did, I created a copy and removed the wife, her W-2 and changed his return to single etc... saved and explained the differences. Well later on when it was time to efile the original return, not the copy, it gave me an error message and all the wife information was gone, I swear I made the changes to the copy and not original, so now I am wondering if you make a copy of a return, what ever change you make affects the original one? I don't want to believe that happens when you create a copy, but just want to make sure I am not losing it yet.

Today a client called me and was telling me that I am hard to reach, that I am always with a client or working out of the office. He jokingly said he almost wanted to wait in front of my house to talk to me, but recently my attitude hasn't been the same and everything he said got me upset because I do so much for him for free. I prepare zero sales tax for him at no charge, deliver documents to his business and I always take the time to explain to him everything. So I was very surprised to hear this from him, worse I have to wait months to receive his payment. He is stopping on Monday and I want to clear things out, I don't want to remind him of all the frebies he gets but in a professional manner let him know he is not my only client.

I know, but if you cannot find it use "Not listed" in place of COVA and you should be ok.

Use "Not Listed" scroll all the way down and you will see it. MAS

Just wondering what others tell their clients when issuing their returns? I usually them tell, your return was prepared based on the information you submitted bla bla, I do not verify theses amounts nor I'am performing an audit etc.... Then I finish by telling them, you will be solely reponsible for providing support for expenses in case of an IRS audit. This mostly applies to my Sch-C clients. I believe there is a similar disclaimer on then client letter.

RitaB, you need to put a trap door under your office chairs, you can use it to get rid of clients or to escape from them. I wish the easy button would do the trick.

Thanks but I am still a he, the picture you see is of my daughter, now she is the one that takes my money and she is only 2:)

Thanks, but why would you refund your fees?

Facts (not using real numbers) TP bought investment property thourgh a 1031 Exchange in 2006 for $450K (TP did not live there 100% rental prop) TP recieves a 1099-C: Date of canceled XXXX 2010 Amount of debt canceled $335K Was borrower personally liable for the repayment of the loan? Check off as YES FMV $170K From 1031 exchange: TP paid 435K for the property, $85K was used a down payment from the 1031 exchange, so his mortgage was for $350, he paid for a couple of years until he couldn't, now my question is, is he on the hook for the difference of between the FMV and canceled debt and on top of that on $85K which he deferred? From the 1099-C, box 6 Bankruptcy is NOT check off, and supposely everything was included the brankruptcy, I just want to make sure I inform him before doing any work, and of course he went through bankruptcy because he was not able to. Your thoughts?

I just put on the side until they call me, I usually get a call 3 weeks later, what is the status of my return and that is when they remember they never sent me the missing info. TIP don't baby sit your clients :)

In 2009 I only had 1 FTHBC and in 2010 had 2, one was for my sister, had no problem with hers, amended her return sent a copy of the HUD and and a copy of the loan and in two months she recieved the credit, the second one is the one I mention above, TP and had no income, paid 30K cash for the house and qualfied for 3K credit. Anyway we are going to send the requested information and wait. Q. What do I have to attach to my 2009 or 2010 return to prove that I bought a new home in order to claim the credit? A. If you claim the credit on a 2009 (or later) return, you must attach a copy of your settlement statement. For most homebuyers, this will be a properly executed Form HUD-1, Settlement Statement (U.S. Department of Housing and Urban Development) that includes: Names and signatures (if available) of all parties involved, Check Property address, Check Purchase price, and Check Date of purchase. Check If you purchased a mobile home and do not have a settlement statement, you should attach a copy of your executed retail sales contract showing all parties' names and signatures, the property address, the purchase price and the date of purchase. N/A If you are claiming the credit for a newly constructed home and you do not have an executed settlement statement, you should attach a copy of your certificate of occupancy showing the name of the taxpayer, the property address, and the date of the certificate. N/A As you see, what was required on the HUD statement (Name, signature, address, price and date of purchase) was submitted This was not a mobile home or construction in progress, so you can say we complied with the required documentation.