BulldogTom

I was not trying to go down this road, I was more looking at this from my own point of view, which may be very ignorant as an accountant and not a health expert. I was just looking at what I thought was a panic produced by the media, and I may still be correct about that, or I may be very, very wrong. My question was more if the media was driving our governments and policy makers to "do something" and they are trying to look like they are "doing something". Time will tell if the steps taken are proportional to the problem, or if "out of an abundance of caution" we have "over-reacted". Personally, I am starting to move my opinion a little bit as I try to understand more about the scope and the outcomes. The steps taken may be appropriate, and I am not going to throw stones at anyone right now... except the people who are standing in line for 3 hours at Costco to get a pallet of toilet paper...I still don't get that one. But if they are trying to get hand sanitizer, good for them. Tom Modesto, CA

From what I get from my client, they are got sucked in by one of those programs and they think this is how they are going to spend their retirement years. When you see the look in their eyes, like they are the ones who found the goose that lays the golden eggs, you know they are not going to listen to anyone but the guy who sold them the program

I have a new client that is buying tax liens. I understand the concept of the investment, but not sure of the taxation. Do any of you have a client doing this and if so can you answer a couple of questions? 1. Are the liens held as inventory or an "other asset". 2. If they are redeemed, do you show that in Gross Sales on the C or as a sale of the lien (same question as #1, just asked another way). 3. Do you split out the interest component paid on redemption from the redemption price paid? Or combine it all as one transaction? 4. If the purchase price is higher than the underlying liability, and it is redeemed, where do you put the loss. Taxpayer is just starting this business. I think it is a mistake, but they believe they can make money doing this. Not my job to give them financial advice, but I do need to prepare the return for them. I believe they should be treating this as an investment, but they contend they will be regularly and proactively engaged in this activity to earn a profit. Thanks in advance for any thoughts. Tom Modesto, CA

I guess I am just so jaded in this information age that we live in. I see everyone in the media (all media, internet, tv, radio) trying to get attention, so that I don't know if I believe any of it. I think of SARS, which was going to wipe us out. Before that was MERS. Before that Ebola. The list goes on and on. When you say the mortality rate is 10 to 30 times higher, I thought I heard it was 3%. I know that is not good, but the flu is like 1/10 of one percent. I have a lot of faith that our medical facilities will find the best way to treat and control this virus, just like they did with AIDS. When that one broke out, it was like a death sentence. Now it is able to be medically managed and people live a long time with that disease. I am sure in a year or two, this will be another virus that we will find a way to control. Not saying we don't need to be careful, and wash our hands, and take precautions, but I am not rushing to Costco to get a pallet of toilet paper. Tom Modesto, cA

Not to minimize the effect on those who have contracted the disease, but it does seem a little overblown. From what I understand, this is a very nasty flu bug that if not treated aggressively can turn to pneumonia pretty quickly. The transmission rate is equivalent to the flu. Is my understanding correct? But I look at the numbers and I don't get it. California has 40 million (give or take) residents. We have about 250 confirmed cases. Yet they are shutting down everything. No church, no sports, no events, nothing can happen if more than 200 people are going to get together. Because 250 people got the flu. Maybe I am just not seeing this the right way. If I am offensive, it is not my intention, but I don't see the end of the world happening, unless it is because our reaction to this disease leads to it. Tom Modesto, CA

Never was a more true statement made. Tom Modesto, CA

Possi is correct. Schedule S is for CA residents who file a 540 and have to pay taxes to another state and are double taxed on that income. You would file a 540 NR for the California Gain. Not sure how OR allows the credit for the double taxed income. Tom Modesto, CA

Please see my post below on SALT caps and final year deductions. I am asking the same questions about how the software is treating this. Tom Modesto, CA

I think I said that badly. The amounts of property taxes would have been allowed in full on the 1041 (not SALT Limited) had there been income to offset. When added to the schedule A property taxes of the beneficiary on their 1040 return, they would not be allowed because of the SALT Caps. Thanks Tom Modesto, CA

Following up, I am now preparing the 1040 for the beneficiary. I imported the K-1s from the 1041. The K-1 has the amounts in box 11 coded A. ATX took those amount and put them on the 1040 Schedule A line 16. Allowed in full, no limitations. I know that the amounts coming from the K-1 are for property taxes paid by the estate to the county on the property held by the estate until the disposition. I don't think they should lose their character when they pass through to the beneficiary, but I might be wrong (won't be the first time the code allowed something I thought it should not). On the other hand, they are not over the SALT limit if the return was for an individual. My feeling is I should place these amounts on Line 5b of the Schedule A, but I am hesitant to override the software. I also want to believe they can come through to the beneficiary without limitation. I would appreciate some input for the proper way to put these items on the clients tax return. Tom Modesto, CA

Yes, that is what I saw as well. On the federal side the carryover is indicated on the Schedule A and I can show it to the client. With the Federal amount fully utilized, and no CA schedule A, where do I show the carryforward amount to the client on their CA return? I don't think this particular client will ever be able to use it up, because they are older and very charitable. When the new law was passed to go to 60% Fed, they jumped their giving right up, so I assume they will exceed the CA limitations every year and just keep building this carryforward. Tom Modesto, CA

CA does not conform to 60% Federal Limit. Nor does it tax SS benefits. CA does not have a Sch A, it uses the federal and adjusts the deductions on form CA. Client charitable contributions for Fed are just under 60%. Part of the income is taxable SS. On the CA return, CA form, the deduction is reduced by nearly 9K. Part of it is because of the 60%/50% non-conformity. I think the rest is that CA is using their own AGI to figure the limitation. I know how it works on the federal, but I have never had this situation before where the charitable deduction was allowed in full for Fed and limited by CA. Is the amount of the reduction available for carryforward on future CA returns? I don't see anything on any form showing a carryforward, only the reduction of the deduction. Thanks Tom Modesto, CA

Thanks for the replies. I don't think ATX has the form updated to make the choice. I will look again but I scoured the form pretty good before I posted. Thanks for confirming my understanding of the changes to the law. At least I know I was not mistaken on what I learned at my seminars. Tom Modesto, CA

Right, but I think that is total AGI, correct? So if he has a job and makes 40K in WA, he has a non-resident requirement for CA because his Fed AGI is over the threshold? Am I reading that correctly? Tom Modesto, CA

I think one of the tax changes we got in December was the Kiddie Tax was reverting to the old method retroactive to 2018? Did I mis-understand what I thought I read? On the Kiddie Tax form, I don't see a place to put in the parents income. Is the form correct? Thanks. My brain is fried. Tom Modesto, CA

If a WA state resident receives a K-1 from a trust in CA, does the beneficiary have a CA NR filing requirement? Amount of distributable income is about $2,500. Tom Modesto, CA

Reminds me of the old CPA who said the size of the fee determined the reasonableness of the tax position. For the right fee, any position can be taken on a tax return. This is why the IRS commissioner keeps going after professionals, because we whore out our credentials to high paying clients to give them what they want instead of recording the facts on the tax return. Sorry, I just couldn't keep quite. It has been a tough day and I am just not willing to hear this crap. Some day justice will catch up to clients and their preparers who pull this $h1t. Unfortunately we are rarely ever to witness it. Judy, if that term is offensive you can edit the post to change it to whatever is the politically correct term for a person who sells their body and respect for money. I don't know what that word is, so I will just use the one I know. Tom Modesto, CA

Sounds like an Inventory Asset held for resale. Tom Modesto, CA

Yup, this is the crap we have to put up with. CCH/WK is a greedy worthless corporation. The website for ATX support is like hidden from the world (took me 4 trys today to get into it). Support is a joke. I think they realize though that if they kill ATX, none of us will go to their other products. Just my humble opinion. Tom Modesto, CA

ATX will charge you for the transmission. $5. Unlimited efile is only for the current year. It is pay per transmission for prior years. Tom Modesto, CA

This is very interesting to me. Have any of you who have eFax noticed that it takes a long time for the fax to go through? I have been on the line with the IRS before, sent a fax, and 15 minutes later it is still not at the representatives fax machine. I am looking for something that is more reliable than e-fax. I pay 16.95 per month for the service and I am not thrilled with it. However, it is cheaper than having a landline. Keep the posts coming please. I am learning as you post. Tom Modesto, CA

Not fun. Sending sympathy from CA. Would take you out for a cocktail or glass of wine but the flights are too long. Hang in there girl. Tom Modesto, CA

Did you prepare 2016? If so, I would contact the IRS with proof of filing. This could get ugly if the computers are messed up. If you did not prepare 2016, then it is a customer service issue if you want to get involved. If it were a client of mine, I would probably take a POA and call to get to the bottom of what is going on, realizing that I am not getting paid for it. Especially if I thought I could get some positive buzz from the client to his friends about my service. Tom Modesto, CA

Business to an individual. A company gives gift cards as prizes. Thinks they are not cash prizes. I told him they are cash equivalents because they have a cash value that is readily determined. It is printed on the damn card. Wants proof the IRS considers gift cards the equivalent of cash. This is stupid, I know. But the only thing I could find is in the definition of de minimis fringes that are not de minimis. I don't know why I am even trying. I know this, everybody knows this. How did I get myself into this mess? Tom Modesto, CA

I know that a gift card is a cash equivalent in the eyes of the IRS. But I can't find a pub or regulation that clearly states that. My research is taking me to sections 132 and 3121, but it is convoluted. I am trying to explain this to a non-tax professional and they are asking me to show them something in the code that says "gift cards are equal to cash in the eyes of the IRS". Any help appreciated. Tom Modesto, CA