YourCoronaCPA.com
AN ACCOUNTANCY CORPORATION
2007 YEAR-END NEWSLETTER
January 5, 2008
Dear Valued Client:
Happy New Year! I am really excited to share with you all the new and good changes.
We have:
Moved to a bigger facility and now have four people to service your account.
Our new address is: 13ê7-A W 6th St. #105, Corona, CA 92882
Changed our name to reflect what we do for you.
We are now: yourcoronacpa corn, an accountancy corporation
Gone paperless so you can now downLoad your income tax return from on the web!
For Individual Taxes
Shareholder basis - The IRS is requiring any loss from an S-Corp must be documented on a shareholder basis worksheet. This will involve spending a little more time on the corporate tax return to complete the basis worksheet Even if you don't have a loss, we will be completing the worksheet in the corporate return. The corporate return transfers that information into your personal return so there will be no fee increase to your form 1040 to file the additional information. This service will be done when we prepare your corporate return.
Domestic Partner Income Tax Returns - You may consider changing your status in 2008. Here is the problem, if one of the partners significantly earns more than the other or one partner is the sole income earner and the non-income earner partner is receiving medical benefits from the income earner's company those tax payments and medical payments may become taxable. If you are in a registered domestic partnership, you will need to prepare a minimum of three income tax returns.
Real Estate Short-sales or Foreclosures - If you can sell/give back your house for more than you paid for it, you have a gain. Some of that gain may be excluded based on the requirements for section 121. If you sell/give back your house for less than what you paid for it then you have a loss. The loss is not tax deductible and the difference between the price you paid and the short sale amount may be taxable income to you.
For Business Taxes
Shareholder basis - The IRS requires the basis of the S-corp shareholder to be reported if they want to take an operating loss. We are going to start keeping track of the shareholders basis regardless of any losses. We are also going to start requiring complied financial statements to prepare the corporate returns. We are going to be peer reviewed in 2008 and it makes the audit easier if the tax returns are prepared from compiled financial statements.
Your CPA
The IRS preparer penalties have increase and we need to be reasonable with our estimations. The position percentage went from 40% (possible) to 60% (reasonable). So if I cannot justif' that 60% of what we reported is within the IRS code section, I cannot report without a possible penalty.
PLEASE CALL TWO WEEKS IN ADVANCE TO SCHEDULE YOUR TAX APPOINTMENT.
Your Corona CPA,
Ed Harold, CPA
