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Desk side manners, V

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    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.

    #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


      #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

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

        Just in case your glasses get foggy.

        Comment


          #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


            #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


              #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.

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