Desk side manners, V

Collapse
X
 
  • Time
  • Show
Clear All
new posts
  • Bees Knees
    Senior Member
    • May 2005
    • 5456

    #1

    Desk side manners, V

    Same definition as given in Desk side manners, IV

    New scenario:

    A middle aged executive who is your tax client checks the yes box on your organizer that asks if he exercised any incentive stock options during the year. You ask him how much? You learn the difference between the FMV at the time it was exercised and what he paid was about a $600,000. You calculate his AMT liability to be an additional $168,000. He says, no you don’t understand. He never received anything for the stock…the company just went bankrupt last week and the stock is now worth zero. (Based upon a true life court case, Merlo, 126 T.C. 10) Based on his normal income, it will take at least 10 years of AMT credits before he can re-coop all of the AMT paid on money he never received.

    What do you say to him?
    12
    Last edited by Bees Knees; 11-24-2006, 07:29 PM.
  • veritas
    Senior Member
    • Dec 2005
    • 3290

    #2
    Here's the rest of the story.

    When you explain the devestating news in a very sympathetic deskside manner, client asks to see the organizer for "just a second". In a startling turn of events the box which was checked yes is blackened out and the no box is now clearly checked.

    What to do?

    Comment

    • DTS
      Senior Member
      • Jun 2005
      • 1852

      #3
      Great add-on!!!

      What to do?

      Tell him, sympathetically of course, that you need a new pair of glasses and that you'd of sworn that box was checked! Whew, thank God it wasn't!

      Dennis

      Comment

      • Bees Knees
        Senior Member
        • May 2005
        • 5456

        #4
        That is why the organizer needs to be filled out in pencil....

        Just in case your glasses get foggy.

        Comment

        • Black Bart
          Senior Member
          • Jun 2005
          • 3357

          #5
          Ask him

          to line you up with his secretary. If he agrees, shred the organizer and tell him that:

          * Unfortunately, your caseload won't allow you to do his taxes.

          * It's too bad that he doesn't have just W-2 income because those options are going to cost him an arm and a leg.

          * You've heard that H&R Block does good work.

          Comment

          • jainen
            Banned
            • Jul 2005
            • 2215

            #6
            AMT cost basis

            Explain that your fee is quite a bit higher this year because you have to track the AMT cost basis.

            Comment

            • Black Bart
              Senior Member
              • Jun 2005
              • 3357

              #7
              Good Call

              Originally posted by jainen
              Explain that your fee is quite a bit higher this year because you have to track the AMT cost basis.
              That'll calm him right down.

              Comment

              Working...