Maribeth

Well, I finally got my phone call yesterday, (7/23/09). They are using my same CCH number. A guy named dave said they would send the package in November. No other information, just the canned script. Maribeth

Wow, I am getting nervous. I haven't received my phone call yet. I was one of the last to be able to buy ATX through TRX so I hope all is going to be okay. Maribeth

A single owner LLC is a disregarded entity and the activity will be shown on a Schedule C (or E) unless the election is made to report as an S Corporation. Are you sure that the two exiting partners did indeed leave the partnership. They may still own their individual shares even though they are not actively working in the partnership. You cannot file an 1065 with only one partner. Maribeth

That is correct, you use the 1045 to carryback an NOL if you are still within the 12 months after the end of the NOL year. However, once you carry back the NOL, you must recalculate the tax in that year after the carryback. If you were in AMT in the carryback year, you may still be in AMT after the carryback. Maribeth

Towards the bottom of the 6251 is a line for you to put the AMT NOL amount in. Maribeth

I read the question that the client had income taxed by Vietnam and then his employer reimbursed the client for the taxes paid to Vietnam and that amount is included in Box 1 of his W-2. So if the client is taxed on it, then he should get the tax credit. For instance, client makes $100,000. All of this is taxed by Vietnam and the Vietnam tax is $28,000. On the client's W-2, Box 1 shows $128,000: the salary of $100,000 and the reimbursed tax of $28,000. Client is taxed on $128,000 for US purposes; client has $28,000 of foreign taxes paid eligible for the credit. Maribeth

That is correct. If there is no tax effect in prior years, then you have actually carried it back for those years, used none of it, and now you will carry it forward. As to how ATX will handle the carryforward, you will have to make sure that it is entered on the 2009 tax return. In addition, you will have to calculate the NOL used in 2009. If it is not all used up, then you will have to make the intervening year calculation in order to determine how much gets carried forward to 2010. ATX does not make that calculation for you. Maribeth

IF you can, before making the election to carryforward, determine what, if anything, would be the effect of carrying the NOL back. If there is no tax effect, then don't make the election to carryforward. That way, if there is unreported income in those prior years, you still retain the option of carrying the NOl back. Maribeth

We use a secure site called CPASecure. We upload the pdf file to the site; the client then downloads the file. No email is used; the client has their own folder and password in order to access the file. We've used this for a couple of years now. I absolutely love it. Maribeth

I have swapped out two computers so far this year and I have had to use the export/import function in order to get the files correctly into the new computers. You can also use the backup/restore function to do this. I believe the next time we have to do a new computer, I will use the backup/restore because I believe that function carries more data with it. If there is an easier way, I would love to hear of it! Maribeth

The NOL carryforward reflected on the 2005 return will continue to be carried forward to future years. The NOL's incurred in 2006 and 2007 will first have to be carried back. I assume that there is no income to offset in the carryback, so these NOL's will increase the NOL carryforward from 2005. If the corporation was dissolved in 2007, then you will have to determine basis in order to calculate the loss on the retirement of the stock. I would also assume that your client will have substantial loans to the S corporation in order to fund those NOL's. Maribeth

I, too, am very concerned that we have not heard from TRX. I have already purchased their product and they have already received payment from my credit card. If CCH does default on its agreement with TRX, I will look very closely at what TRX has to offer before I ask for my refund. And if CCH does default, I most probably will not renew with ATX. Maribeth

In general, the granting of an easement for a limited use or a limited time reduces the basis. See Rev Rul 68-291. If the proceeds exceed the basis, then there is gain. It is is a perpetual easement, then it is a sale, even thoough the title does not change hands. Maribeth

The K-1 has the correct amounts to report. They have been adjusted for any deductions that the trust has so the amounts from the K-1 should be lower than the amounts on the Edward Jones statement. Maribeth

Mike, if it is pretax, then it is not subject to FICA. It is just like any other §125 plan. And I might add that other than my AAA auto insurance, Alfac is the best insurance I have. A great company and great plans. Maribeth

My experience with these LTC policies is that if it is checked reimbursement, then it truly is a reimbursement process. My elderly client has a reimbursement policy and the insurance company is not paying her per diem, it actually reimbursed the nursing home charges. There is no income and no deduction. My other elderly client has a per diem policy. This policy is reimbursing her $80 per day for her care in the nursing facility. She gets the $80 per day. Of course, it only pays a portion of her daily charges so there is a medical deduction after the reimbursement. FWIW, Maribeth

Benefits paid under a §125 plan are not subject to federal income tax, social security tax or medicare tax. The amount of the benefit paid under the plan will not show up in Box 1, 3, 5 of Form W-2. Where you might be getting confused is thinking of a 401(k) plan. In that case, the amount deferred is subject to social security and medicare, but not subject to federal income tax. That scenario is just the opposite for s-corp s/h medical premiums which are taxable for federal income tax, but not medicare or social security. There can be a few other quirks but for your sister-in-law, her health benefits are not taxable and will not show on her W-2. Maribeth

Make sure you keep a copy of the invoice from the purchase of the boat in your files. I have had a handful of clients who have built their own homes over the last couple of years. The sales tax on this construction is deductible and every single one of those clients have had the deduction challenged. So keep a copy of the invoice, just in case. Maribeth

My experience with any entities efiling, be it corporation, partnership, or trust, the initial year filing return cannot be efiled. You have to paper file it. Maribeth

Send it to whereever your client would have sent this year's return. Maribeth

Well . . . . . you could put the 1099 info on a Schedule C and then back it out with an expense item labeled such as "not in the business of selling stuff". That would take care of the 1099 reporting. Then show the sale on Schedule D, showing the loss. And then limit the loss on Schedule D to zero. Maribeth

Tom, look at the 6251. I believe towards the bottom is the line where you add the AMT NOL. Maribeth

Last year I remember a post you made about this time, about how bored you were. That's what always gets me about this time, also. I am so tired and bored of doing tax returns. My brain need something else to do. Oh well . . . . Maribeth

I just received their offer to nenew my software for 2009, with a 10% discount if paid by 5/31/09. The email had a link to use to to see what my renewal price would be. I clicked on it and got the "ATX Server is down". Not too good a marketing ploy, would you think? Maribeth PS: I am not going to renew unless they fix that @$%&* button on the print routine about using their @$%&* pdf writer. And I am serious.