It seems I included 3 K-1's from 3 L.P.'s on my client's 2007 tax return only to notice this year, they are all IRA's. I went in and temporary deleted all 3 to see the difference of what my client would be before and after and its a net gain (includes both states) of $27.
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What kind of client? If they are a good client who understand things like that can occur (mistakes) I would tell them and let them decide if they want the extra $27 from an amended return or as a discount on their next tax prep fee. If this is a client with an attitude and thinks you better be perfect all the time, I wouldn't say a word."A man that holds a cat by the tail learns something he can learn no other way." - Mark Twain -
sorry, but i have to disagree.
i treat all my clients the same. if that means i have to admit one of my mistakes to a person i would rather not, well, too bad, i made the mistake to begin with.Originally posted by taxmandan View Post
i feel if i don't treat all of my clients the same, i operate no better than how the worst of them treat me.
have a nice april 16.Just because I look dumb does not mean I am not.Comment
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My Notion
I think you have to come clean with the client as a matter of integrity. Also think that if there is an amend there is no charge for it. However I would strongly advise client to accept a substantial discount on next year or simply a $27 check from me instead of bothering the taxing agencies over this trivial amount.Comment
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Back to Original Post
AZ, how can you have a K-1 from an IRA?? I've seen some strange things, but this one is like a statue blowing smoke rings...Comment
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They are coming in left and right. All these K-1's are sent to the taxpayer, when in my opinion, they should be sent to the custodian that has the IRA. I don't know why they are doing this, but I have caught myself a couple of times putting them on the tax return only to realize it (thank goodness) before it is finalized. The TP does not know the difference and always includes them in with their papers. Note the FEIN of the recipient is not a SSN but the ID# of the custodian. However, the only way you know it is an IRA is that EIN and sometimes they have CUST in the address, sometimes FBO. It seems that brokers have fallen in love with an LP called Powershares -- I have seen tons of them.Last edited by Burke; 04-08-2009, 04:15 PM.Comment
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You have to watch those K-1's coming in for IRA's. Sometimes they are reporting UBTI and may expose trhe client to the requirement to file a 990-T. They can be a huge headache.
As for what to do about the $27, I agree with the suggestion to send the client a $27 check and then call them up. I'd explain that if the amount were larger & therefore worth the time & trouble, I'd amend the return for free. But for this amount, just making them whole with the least amount of hassle is my primary concern."The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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I'll avoid future attempts at humor on forums
I guess my attempt at final tax week humor fell flat. So I will avoid any reference to the Geithner Rules of Integrity.Originally posted by erchess View Post"A man that holds a cat by the tail learns something he can learn no other way." - Mark TwainComment
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Oh, now I get it...."The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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They recommend that you do not put things into a tax deferred account (IRA) such as shares of Kinder Morgan Energy Partners because of the tax treatment. These, although sold as stocks are, are actually limited partnerships. As such, they issue K1s which have numbers in a lot of the boxes. They are very popular because of the high percentage return on investment. However, much of this is actually return of capital and is lowering your basis.Originally posted by Nashville View Post
Charles Schwab sends out a notice to holders that they will get a K1 or K1s and that if certain income exceeds a specified amount (I believe that it is $1,000), you must notify Schwab and they are required to pay an amount to the IRS. I don't remember all the exact details, but this is the general idea.
LTOnly in government or politics is a "cut in spending" really an increase. It's just not as much of an increase as they wanted it to be, therefore a "cut".Comment
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taxmandan
Don't avoid humor but in the future use a smiley when you are being funny.
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