Discussion:A Classic

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Death&Taxes (talk|edits) said:

7 April 2014
As I drove to Philadelphia, I had a text from a client whose return was already completed, but not filed. "Please answer the email I sent you." Not possessing a smart phone, I had to wait until I reached my office, where I read this:

"As you may recall, in 2013 my brother and I inherited a house from our mother that we own jointly. We are each claiming half the rental income and half the expenses. Here is the problem: On Form 4562 Depreciation and Amortization you entered the $70,000 that is the basis for depreciation on line 19h with a recovery period of 27.5 years, for an amount of $2,015. My brother's accountant entered the $70,000 on line 19b as a 5 year period and a depreciation amount of $14,000. As this is the same property in both cases, we think that we both need to use the same method to calculate depreciation."

Comments!

Wiles (talk|edits) said:

7 April 2014
My first comment is, despite the fact that we tell our clients that they should review their tax returns before signing, they really should not. There are too many numbers and illogical terms all over the place. It is only going to create a feeling of uneasiness. It is our job to give them the peace of mind. They need to know that we are taking care of them, and we are keeping the big bad IRS off their back. Why would the client thwart the process by actually trying to read their tax return?

Nilodop (talk|edits) said:

7 April 2014
Tell him to split the difference.

Southparkcpa (talk|edits) said:

7 April 2014
Ask if he can have his brothers accountant do my tax return.

Coddington (talk|edits) said:

7 April 2014
Tell him we just make it up as we go along and no one checks or even cares.

Cricktaxea (talk|edits) said:

8 April 2014
To be serious, the one brother is your client, not the other one. Do your guy's return properly and explain it to him, show him the Pub if you have to. And of course tell him his brother's accountant is an unlicensed idiot, maybe you'll pick him up too.

I had the exact same scenario involving my client and his ex who happens to be a tax attorney. She had been taking 15 years on their rental property before the divorce and him coming to me. I redid the depreciation going forward for him and sent her a letter with cites explaining this. I remember that she seemed genuinely surprised and she probably corrected her return but that's not my problem, we represent the person who is our client, not the other party. This was some years ago but I think we looked at the possibility of amending the two prior years since they bought it and decided not to because it was all suspended losses and it didn't materially change anything or something, I can't remember now.

Bob

EZTAX (talk|edits) said:

8 April 2014
We have had some real doozys lately. A few days ago I overheard the client arguing with one of our staff - "but my last preparer said I could deduct my commuting! I explained the rules to him but he was not convinced. I got out pub 17 and showed him the neat little chart that shows an arrow between your home and your main job with the words "never deductible". He said - well that is pretty clear!

It got worse. He then said the last guy deducted his HOA. I patiently explained (at least I thought I was using my patient voice) how HOA was only deductible if you had a rental. I looked at his 2012 return and showed him how it was not in his mortgage interest so he must have misunderstood. I was about to let it go but had the sense that this last preparer was sketchy so I looked again. Yep - deducted on the 2106 with the commuting as "misc expenses". To top it off the guy had taken the clients kids tuition as a deduction instead of an AOC credit. We were going to amend but then when we saw the other issues and dropped it and just let the client know they should amend it.

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