What To Do??

[Terry D EA]

New client dropped in today with two LLC returns. One got an extension and the other very well get one as well. Looking over the documents, I noticed that the previous preparer claimed 2K in depreciation and there were not any depreciation schedules or any information at all about what is(was being depreciated). Form 4565 is missing as well. form 4562 was used in 2010. I noticed a few mistakes in this return and it is sloppily prepared. Now, preparer is not available (may have passed away) and I can't get the information on the depreciation. What do I do with this?

[Guest Taxed]

First order of business is get an extension for the other return. Then when you have some time ask taxpayers to give you all previous 3 year returns. Hopefully you will be able to reconstruct.

Routinely I run into new returns that have depreciation but does not add up. Then i look at the previous returns and find that the asset was a sec. 179 the first year and then somehow it moves into a depreciation schedule the following year. I think what happens is that taxpreparers who have no idea how their software works or they convert software get nervous when an asset does not showup in the depreciation schedule and they override it messing it up.

[Pacun]

Ask the clients about the assets and when they were purchased. Maybe it is only one or two. Get an extension and if copies of tax returns don't have much info, get a copy from the IRS for the last three years.