Balance sheet with 982?

[fivetwos]

I am excluding COD income based on insolvency. What's the situation with submitting a "balance sheet" to show how the insolvency was calculated? The CPA I use says it is not necessary at this time, but I read some things that say it may be.

Thanks for any feedback......

[veritas]

Why

don't you trust your CPA?

[fivetwos]

don't you trust your CPA?

Something wrong with other opinions??

[Bees Knees]

Something wrong with other opinions??

Yes there is.

When you have a tax professional who knows all of the details about your situation tell you something, and then you go fishing for a second opinion on a professional tax message board and only give us 2% of the details, we have a tendency to get a little snippety with our responses.

[Jesse]

Veritas - I like the signature line!!!!!!!

I have a new attitude - when asked if I'm a CPA I will still reply, no, I am an Enrolled Agent, recognized and authorized to represent you before the IRS, and I've got REAL people.

[fivetwos]

I have sought two professional opinions. One said it's not necessary, the other says make sure you do it.

I did not intend to offend the two of you.

It would seem to me that there would be a clear-cut rule as to whether it needs to be filed or not, not a case-by-case situation. I admittingly do not know the answer or I would not be seeking opinions.

My post was an attempt to get some info on this. I had thought that's what this board was about. Maybe I was wrong.

[gkaiseril]

I have sought two professional opinions. One said it's not necessary, the other says make sure you do it.

I did not intend to offend the two of you.

It would seem to me that there would be a clear-cut rule as to whether it needs to be filed or not, not a case-by-case situation. I admittingly do not know the answer or I would not be seeking opinions.

My post was an attempt to get some info on this. I had thought that's what this board was about. Maybe I was wrong.

tax return is unique even with what appears to be just a simple W-2. The final return can be very different from another with a W-2 with the exact same earnings because of certain credits based on the age of the taxpayer and the amount of the earnings or if the same age depending upon if a parent could claim the taxpayer as a dependent.

You get what you pay for. If you have questions, you paid for a return so get the explanation from the original preparer. How many lawyers or doctors give out free advice or diagnosis? There are liability issues for a professional just giving advice.

Some preparers attach additional documents to clarify a given situation and try to prevent additional questions or correspondence from the IRS or state. This could also be personal preference by the preparer. I have had to prepare certain optional schedules for a rental property because a city or county clerk demanded a given worksheet be prepared before granting a county homestead exemption for the owner's unit within an apartment building. This schedule is not filed with the IRS or state but this clerk demanded the schedule because this clerk "knew" how the tax return had to be done, or the clerk just knew of one option available and did not want to "confused" by the IRS instructions.

[veritas]

I plagiarized it.

From The Bees.

I got the habit from The Gray Lazy.

Veritas - I like the signature line!!!!!!!

I have a new attitude - when asked if I'm a CPA I will still reply, no, I am an Enrolled Agent, recognized and authorized to represent you before the IRS, and I've got REAL people.

[bruehaus]

TaxTools new module

If you have TaxTools, there is a brand new module called Cancellation of Debt - Insolvency. It includes a Personal Financial Statement and Form 982.

[David1980]

http://www.irs.gov/pub/irs-pdf/f982.pdf

Balance sheet not required to be filed with your return.

If you are audited, you may need that, and perhaps other documentation, in order to prove you were actually insolvent. It would be a good idea to have the calculation used to determine insolvency for your files, but is not required to be filed. So your CPA is correct.