BulldogTom

I don't. I see 36K of income and28K of losses. Taxpayer's standard deduction cannot create an NOL. there would have to be a schedule A with business deduction on it to make it part on the NOL. What am I missing that makes you think there is an NOL? Tom Newark, CA

Taxpayer sold business to child in 2000, long before I got them as a client. Child and husband still operate the business. The sale was recorded on taxpayer's return as an installment agreement. Payments have been made and recorded every year on the 6252. When I picked them up in 2011, I took the information as it was and continued on with the same gain percentage. This year, taxpayers gift to child and spouse maximum amount (56K) to relieve most of the remaining debt on the note. In 2015, they have gifted the remaining balance. My take: these are payments on the installment agreement and need to be recorded as such on the 6252. In 2015, the 6252 will be marked as final and all deferred taxes will have been paid. Am I correct or is there something else that I am missing? Thanks. Tom Newark, CA

Filing the 8606 does not create basis, making a contribution and not taking a deduction for it does. Filing the 8606 only tells the IRS what you have done. But the transaction still stands on its substance. If you can determine the amounts of the non-deductible contributions, that is the basis. Think of it this way, if the taxpayer was selling his home and had made significant improvements to the home, would you allow him to add them to basis? Sure you would, if you could figure out how much it was that he spent on the improvements. Can you figure out and document the contributions in the intervening years? If so, that is what you should use. You should be able to get the brokerage to give you the amounts added every year. They should have that record. Then pull a transcript for the years you can from the IRS and see what he deducted. Not easy, but doable. I would not even consider a 3115. Tom Newark, CA

You should treat this as a purchase and capitalize and depreciate. As well, I would create an amortization schedule for all the payments, busting out the interest from the purchase price of the equipment. The contractor should know what the purchase price is of the equipment and it should be easy to take the "rent" payments and get to the principal and interest on the amort schedule. The interest should be currently deductible and the rest depreciated. I have done many of these in my position in the construction industry. Tom Newark, CA

Second cbslee. Make sure you know if it was refinanced and what the refinance funds were for. Other than knowing that information, I agree with the other posters. Tom Newark, CA

I used to think that someday, I would like to have the problems that you all have with being backed up. Until this year, I never had returns laying on my desk that were not waiting for more information or just signature pages from the client. Everything that came in got started that day and was done within a day if the information was all there. This year is different. For a lot of personal reasons and a lot of client personal reasons, I have a stack of returns waiting for client information, and 3 returns that I have not even started on my desk. I was going to get 3 of them done last night, but only got 1 Scorp almost done when I ran into a little bug in the software. I usually can get caught up on the weekend, but last weekend and this weekend, I have family in town and I just feel like I am sinking. I need 2 quite days to get my returns caught up so I feel inferior in the size of my practice to all of you again. Tom Newark, CA

Any CA preparers found a way to get the R&TC number into the Sch B,C Part II tab? The software is not allowing an override, it is not flowing from the override on the main form like it did last year, and I can't find a place to enter it anywhere in the form or the Fixed Assets. Return will not e-file without the number in the field. HELP! Anyone have a workaround or know how this is supposed to work? Tom Newark, CA

Your situation was the first thing - ok second thing after "WTF" - that I thought about after I read the post. Tom Newark, CA

Maybe Obamacare will send out checks to the preparers who have to amend the tax returns. But then we would have to sign up on the website and wait 3 months for approval of our credentials, which would have to involve a new back end process for the programmers, at which point the IRS would issue new regulations saying that you don't have to amend until we can get the system up and running, and that regulation would come after 250K of the people who have already amended their returns, which would lead to a congressional hearing at which time the programmers will take the 5th to avoid the inquiry of congress, which will lead congress to further cut the IRS budget. Or something like that. Totally political disgust in this post, so Judy or KC can delete it if they think it is inappropriate for this forum. Tom Newark, CA

First year in business sounds like a great reason to take a modest salary until you see how the business is progressing. Given the facts you just presented, I would leave it alone for the first year wages and make the adjustments going forward. I think I could win on audit with that argument, especially if I can show that the amount was increased for the following year. This may not make you comfortable, so do what you think is best. I would let it ride as is. Tom Newark, CA

What were his wages in the prior year? What was the income in the prior year? Is that reasonable? Get all the facts together and see if what he was taking in prior years was similar to what is on the W2. If not, make a change, if yes, changing salary going forward to reflect the new prosperity of the business sounds reasonable to me. Not enough info to make a call right now, but you should be able to get everything together and make a best judgement call on what to do. I would only go into the 4th quarter if there was a change needed. JMHO. Tom Newark, CA

Deb, I have not done enough to get you an accurate opinion. I will watch for it and see if my results mirror yours. Tom Newark, CA

What did you do? Inquiring minds want to know (just in case I end up with this situation later this year). Thanks, Tom Newark, CA

I feel bad for you all back east, but I am actually not happy that it is in the upper 70's this weekend. I had to cancel my trip to go skiing with my boys on Presidents day. So we are going to Santa Cruz on Monday and check out the beach weather. Hope I don't get sunburned riding the Giant Dipper. Tom Newark, CA

TP purchased a solar gate opener for the front of his house. I don't think it is qualified solar property for the Solar Credit. Am I correct. What I read is that it has to create electricity for the home, and I don't think the gate on the front of the property qualifies. Any way to shoehorn this credit onto the tax return (legally)? Thanks Tom Newark, CA

I ran into a similar problem with 100S schedule B where in the past I could override and enter the correct amounts, but this year I could not. I had to get them to open up overrides on the form because they did not have another way to populate the form. May be the same situation for you that they locked down the overrides they used to allow. Not a comfort I am sure, but it is the best I have for you. Tom Newark, CA

What Lion said. When there is a same day transaction, the gain is put on the W2. You end up with a loss equal to the broker fees. Tom Newark, CA

Not Quite. She loved him, they enjoyed life together. The kids were close to mom, but did not like the boyfriend. They are doing their best to uphold her wishes. But they don't like him and never could see what mom saw in him. Tom Newark, CA

Thanks KC. Tom Newark,CA

Frikkin' Unbelievable Nonsense FUN Tom Newark, CA

I think you should refer them to their exchange. I am serious, not making a smart @$$ remark. I believe it is the responsibility of the taxpayer to inform the exchange of a change in their eligibility. Tom Newark, CA

I think you did it correctly. Tom Newark, CA

Sometimes, I would like to secretly record something like that and send it to the 6 O'clock news and see if they would air it. Tom Newark, CA

The boyfriend is supposed to pay the costs of utilities and upkeep on the home. The taxes and mortgage are not addressed in the trust or the will. The home appraised at 125K DOD and is subject to a 30K mortgage at DOD. Loan from trustee to trust is documented and will be paid back upon sale of the home with the remainder to be split 3 ways by the sibling beneficiaries. I think I am asking 2 questions: 1. Is the Mortgage interest really investment interest to the trust, as there is no income and never will be on the home? (I think it is) 2. If the answer to #1 is yes, where does the carryover of unallowed interest reside, in the trust or with the beneficiaries? Thanks for your input. Tom Newark, CA

Trustee is given broad discretion to classify all costs as Income or Principal at his sole discretion. Trustee, who is also a beneficiary, is loaning the money to the trust to make the payments. (protecting the asset from creditors until the boyfriend moves or dies) Tom Newark, CA