Thanks for your responses they were very helpful.

Would anyone know what I should expect an accountant to
charge approximately for my situation? $300? more?

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<googlegroups.domain.benalt[at]xoxy.net> wrote:

- quote -

If you want some good, low-cost software, and are only doing
your own return, get the professional edition of TaxAct.
It will do individual tax returns. You will also need a
State program which you can also purchase from TaxAct.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

<googlegroups.domain.benalt[at]xoxy.net> wrote:

- quote -

TaxAct is a good program. The professional version is
probably worth the extra cost. You will need one program
for the Federal and another for the State.

Get Publication 17 from the IRS to answer your other
questions regarding the sale of the property and the
charitable deduction.

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<googlegroups.domain.benalt[at]xoxy.net> wrote

- quote -

Yes, the over-the-counter tax software can handle this
situation, but as the data entry person, can you?

The thing is, you have several separate issues to deal with,
and not all of them happened in 2005. Those parts that
happened in 2004 (when you first rented out the townhome)
flow from 2004 to 2005 (when you sold the townhome). Based
on what you posted, you might meet one of the exceptions for
the gain exclusion on the home, but you will still have some
gain to report based on the depreciation taken on the rental
period.

If I were you, just because this is going to be a complex
year, have the prior accountant do your 2005 return to wrap
up the rental and gain from the sale because they are more
familiar with it.

- quote -

It's based on your check date, but it also has to look
reasonable if you get audited, that you wrote the check in
December but they didn't cash the check till like, April
14th will draw some attention. If it concerns you, ask the
charity to promptly negotiate the check.

--
Paul Thomas, CPA
paulthomascpapc[at]bellsouth.net

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Any tax program will handle your taxes if you give them the
correct answers. If you are going to go this route,
however, you should read the IRS 1040 instructions for every
line item you have, and whatever publication are available
for the individual items. Without some concept, even if
it's just following last year's return, you won't be able
to recoginise poor output. As the saying goes GIGO.

ed

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<googlegroups.domain.benalt[at]xoxy.net> wrote:

- quote -

I would guess so, since nothing you mentioned seems terribly
complicated once you have done your first dozen or so rental
properties and Schedule A's. Any conumer tax oftware should
be able to handle it.

But tax software requires you correctly enter everything,
and if this is your first rental, including placing into
srvice and disposing of it, it is real easy to misstep
somewhere.

Incidentally, taking the profits and giving some to charity
does not change the nature of the gift nor the taxability of
the profits.

- quote -

Usually the date of gift is the date you place the check in
the mail.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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Software programs are really easy. Problem is - what do you
enter? Very old saying in the computer industry is: GIGO for
garbage in, garbage out. Accounting for a rental (basis,
depreciation, percentage of expenses business vs personal
since I doubt you rented on January 1 and stopped on
December 31) is something it takes time to learn. And
selling an investment property involves more forms than you
realize. You need a professional this year.

Nan, EA in LA

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- quote -

Good tax software, such as TurboTax or TaxCut, will handle
all of it. But it's not totally automatic. You have to know
what you're doing to some extent. You do appear to have a
significant level of complications, including real estate
rental, sale of rental property, and large charitable
contributions. If you have never done your taxes yourself,
and are not familiar with the rules for these situations,
then this would not be the best year to start using
software. You should go to a professional preparer. Try out
the software in a year when your tax situation is simpler.

- quote -

OT: This is one of my pet peeves. If they can't be bothered
to cash the check in a timely manner, maybe they don't need
the money that badly.

- quote -

Neither. It's the date you mailed the check or gave it to
the charity.

Bob Sandler

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- quote -

I use the software packages for their arithmetic accuracy
rather than tax advice. Three of the forms I file now
approach fifty lines of computation. A single mistake by
hand can cause a mess. In a decade of using turbo-tax it
only clarified one tax law I had misinterpreted before. It
does ask several hundred questions to cover a lot of ground
if your finances are elaborate.

I fear the three tax questions you ask are so elementary and
covered frequently in advice books & columns that perhaps
you should not be doing your taxes yourself.

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googlegroups.domain.benalt[at]xoxy.net wrote:

- quote -

Well it sure can be easy, IF you have typical wage earner
income, and simple itemized deductions.

- quote -

But with issues that you describe, esp the rental income, I
would strongly urge you to continue with outside help, be it
an Enrolled Agent (EA), a CPA, or a commercial outfit.

ChEAr$,
Harlan Lunsford, EA n LA

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googlegroups.domain.benalt[at]xoxy.net asked:

- quote -

Most software programs are probably capable of handling
this, BUT because you have special "unforseen circumstances"
(the loss of employment) after one year of owning an
occupying the home (See Pub 523), complicated by the
Schedule E issue for the rental period and recapture issues
for depreciation during the rental year, I would strongly
recommend this is the year you _really need_ your
accountant.

- quote -

The date you wrote and mailed the check is the controlling
factor.

Bill

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<googlegroups.domain.benalt[at]xoxy.net> wrote:

- quote -

You'll have Schedule E rental income and expenses plus a
Form 4797 sale of rental property and Schedule A itemized
deductions (possibly).

- quote -

Sure does.

- quote -

Your deduction is effective when you surrender control of
the funds, which is when you mail the check.

You didn't ask, but although software can prepare your
returns, your questions indicate you don't know what should
be on them. I've worked with taxes since 1971, and when I
sold rental property I paid to have my return prepared.

Hire someone.

--
Phil Marti
Clarksburg, MD

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We were considering doing our taxes via software instead of
getting an accountant since many people have been telling us
how easy it is...

I have a question though regarding our situation (in MD). We
bought a townhome and lived there for a year when we lost
our jobs and were forced to rent it out and live elsewhere
for 1 year. At the end of that year we sold the townhome at
a profit. Half of the profit we gave to tax deductable
charities. How does all of this effect our taxes? Would
anyone know if the popular tax software out there handles
this kind of thing?

Also, we have given to various charities that have not yet
cashed our checks. Does it go based on the date on the check
or when they cashed it regarding tax deductions?

Thanks for your help...

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