Gene,

You said it can I get you a bigger soapbox, megaphone or
perhaps time on the Emergency Broadcasting Network that
seems to interupt every TV program I'm watching to a test.
Your information would me more of a public service.

Regards,

Mark

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BobLeavitt wrote:

- quote -

The noise you hear is me dragging my soapbox over so I can
jump up on it! This is one of my pet peeves. I'm not only
an EA, I'm also a Registered Financial Consultant. Every
year I meet with a few clients who "handle" their own
financial affairs and put themselves into situations just
like this.

I first expanded the tax practice to include financial
advisory work because clients were coming in at tax time
with investments that had major implications on their tax
returns. Many of these issues required substantial amounts
of reporting but threw off little or now income or tax
benefit. Every single client had the same reaction you did
- "Its going to cost HOW MUCH to do my return this year!"

The best recommendation I can make to you is to talk to a
pro and see what it will cost. I can tell you in my office
we include the resident state return - all other state
returns add at least $150 to the fee REGARDLESS of the tax
or income benefit.

Here's a short list of my favorite issues:

1 - Client likes to golf in Myrtle Beach and decides to buy
a condo to rent so he can have a place to take the family
for free. Thinks the rental will pay for the condo and he
can use it for free. Client doesn't know that under the
source income filing requirements he has to file a SC return
to report the rental income.

2 - Client #1 get tired of paying me to do a SC return when
he has a tax loss that he can't deduct because his income is
too high so he decides to sell the condo. Client is even
more surprised to find out he has a capital gain issue now
with SC.

3 - Client buys into an oil/gas partnership because of the
IDCs thrown off the first year. Client sits and cusses
because his K-1 is late and he can't file until August -
somehow this is always my fault. Client also insists that
he is NOT self employed and that the Schedule C is not
required - regardless of what the paperwork from the venture
or the law says.

4 - Client buys into a low income housing tax credit
venture. Likes the idea of supplying low income housing to
seniors and wants to get the tax credit available. Of
course, client hasn't bother to notice that the venture
operates in 32 different states. What's worse is that there
are some states that FIRST require that you calculate your
tax based on your total Federal income THEN apportion it
based on your state income to your Federal income. This
usually results in at least some tax due for most of the
nonresident states.

5 - And for those familiar with the reciprocol tax agreement
in place between MD, DC, VA, WV & PA - Client has been a W-2
employee of a multi-state company for years and KNOWS he is
not required to file returns in all the states he works in,
only his state of residence. Client gets offered a contract
consulting position and accepts it. Problem now is that the
income earned in each state is NOT wage income, it is
business income and returns are required for each state.

That's my top 5 (at least for today) - how about you guys?

Gene E. Utterback, EA, RFC

Moderator:
Educating the heathens is a popular colonial history topic.
In my earlier childhoods, read many books on this topic.
It seems the natives often rewarded these educators by
giving them a special place in the tribal village, i.e.,
their heads would be mounted on stakes outside of the
chief's hunt. And you think you have it rough.

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"BobLeavitt" <robertl101[at]hotmail.com> wrote:

- quote -

Not every investment is suitable for every investor. While
you probably don't have to file in many of those 32 states,
you do have the obligation of determining which states
require you to file and which do not. The cost for a tax
professional to do this and prepare the needed state returns
will be quite steep. Or you could ignore it all and hope
that none of the states has a budget crisis and decides to
look for revenue from non-residents who fail to file tax
returns. KMP and other partnership entities are already
reporting their partner data to the states, so it shouldn't
be that difficult to match the data to returns filed. Choose
your poison.

Ira Smilovitz

<< ================================================== ===== > << 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 (2006) - All rights reserved. > << ================================================== ===== >

In 2005, I purchased 200 shares (units) in Kinder Morgan
Energy Partners (KMP), a limited partnership with a nice
yield. Upon receiving my K-1 package, I find that KMP has
Gross Receipts and Ordinary Income/Loss, in 32 states.

What do small investors typically do in a case like this.
Engaging the services of a practitioner to take care of
state filing requirements would probably cost more than I
received in distributions. Am I wrong in thinking it would
be difficult to find a practitioner who would have a handle
on the tax requirements for 32 states - unless he already
has done work for a client who holds and interest in KMP.

Am I missing something here? I am afraid I may be better
off selling these (and similar investments) rather than
trying to sort out, and comply with, the requirements of the
various states.

I will greatly appreciate anyone's
thoughts/suggestions/comments.

Robert Leavitt

<< ================================================== ===== > << 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 (2006) - All rights reserved. > << ================================================== ===== >