Every year – not just every four years.

From a CPA:

Subject: Death of A Partner

Dear Tax Guru…

Re your reply to the 2/14/06 Death of A Partner question:

 

       The person asking the question needs to  be made aware of the IRC Code 754 election that may apply in this situation.

My reply:

 That’s a very good point. 

I will got some info on that posted soon.

Thanks for writing.

Kerry Kerstetter

 

Additional Info:

Proving again why no one reference book can be all things for all people, I compared the info included in both The TaxBook and the Small Business QuickFinder and have to give the nod to QF for including a lot more info on Section 754 than the brief summary in The TaxBook, such as the following quotes from the new QF Online Service, where they have the same content as in the books:

Optional Adjustment to Basis of Partnership Property (Section 754 Election)

Section 754 Election Because of differences between basis and FMV of assets in a partnership, inequities can result when partnership interests are sold or transferred.

Under a Section 754 election, the purchaser’s basis in partnership property is adjusted to reflect the purchase price and the partnership interest. This reduces negative tax effects when basis in acquired partnership property is less than the amount paid for the partnership interest.

Gain upon liquidation of a partner’s interest may occur from a Section 754 election. The election is used to remedy the negative tax consequence when an amount paid for a partnership interest is greater than the partnership’s basis in its assets. Since the election can increase the partner’s ability to deduct depreciation on partnership property, the gain upon liquidation of the partner’s interest may also be increased.

Bush Says Mortgage Interest Deduction Safe – This will hold off the much anticipated burst in the real estate bubble a little while longer. 

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Using the Web to Buy a Home

Q:

Subject: 1040 Express Answers

Hello, I noticed you mentioned that you are using the CCH 1040 Express Answers book. I am considering this book. How does it compare to similar products, such as Quickfinder and The Tax Book?? I noticed in one of your posts that you couldn’t find the updates page for the Express Book. I came across it doing a Yahoo search. I’m sure I can find it again, if you haven’t found it by now. Any feedback greatly appreciated.

A:

Check out this post from last December.

Since I wrote that earlier piece, I have been using The TaxBook almost exclusively and have rarely had to open any of the QF books, which I did buy this year.  I have been most impressed with the table of contents it has on each tab page.  It’s made finding things much more efficient. 

A few weeks ago, I finally received my copy of TMI’s All States Edition of the TaxBook.  I was similarly impressed with how they set this book up and already consider it superior to the comparable book from QuickFinder.

If you are looking for just one book to work with, I heartily recommend The TaxBook.

Good luck.

Kerry Kerstetter

Follow-Up:

Kerry, so I gather from your post, that you would recommend The Tax Book over the CCH 1040 Express Book? I am trying to find just one book to have as a reference. Thanks for your reply.

 

 

I just printed out my first 2005 extension form (Form 4868) for a client and was disappointed that nowhere does the version that Lacerte prints out say that this year’s first automatic extension is for six months. Knowing that this will create a lot of confusion, as well as a lot of anxiety around August 15, I used my Microsoft Publisher program to create a label that we will be sticking on each 4868 we prepare.

That’s still no guarantee that everyone will actually read the date, as I’ve noted with how many clients overlook the extended dates printed on the other extension forms.

From a reader in Iraq with a USMC email address:

Subject: Your web site

find your references to the filthy rich disgusting.

 Furthermore, if we had a decent tax scheme (VAT) we could do without most of you deadweights and lawyers and hope you found real work.  Talk about a filthy line of work…..

My Reply:

You obviously haven’t read much of my stuff because your anger at the tax system is very misdirected by blaming me.  I have long been a very outspoken and active member of the fight to repeal the 16th Amendment and eliminate the entire income tax system.  I actually worked in the 1996 & 2000 Libertarian Party presidential candidate Harry Browne‘s campaigns, which included a plank in his platform to eliminate the income tax entirely.  I was on some radio interviews with him expressing my 100% support for this objective.

I have been in this business for over 30 years and long ago recognized that it is well beyond any kind of repair, which is why I have also long been a supporter of the FairTax movement to replace the income tax with a national sales tax.

Far from being scared at losing a lucrative income stream, I would like nothing better than to be able to use my skills and knowledge for other tasks than helping people battle the IRS.

In regard to your problems with the filthy rich, I’m not sure what you mean.  You may have the same misconceptions as I addressed in several posts over the years, such as this one.

Thanks for writing.

Kerry Kerstetter

Follow-Up:

I  may have jumped the gun and apologize.  I was looking for 2005 tax schedules and your page came up on Google – all I saw were references to the filthy rich and no tax schedules….

I would love to see a flat user-based tax, and to see Congress go home part of the year with less taxes to spend, or tax laws to write.  The abolishment of the IRS would be a great side benefit.  I read long ago the tome, To Harass Our People by the Idaho representative who later was incarcerated for his cajones to take on the IRS…..

Mea Culpa and hang in there-