We Prepare Tax Returns!

We prepare most type of tax returns:

Individual.

S Corporation.

C Corporation.

Partnership.

Payroll.

Amended.

Gary Bode, CPA is a Master's Degreed, nation wide accountant offering tax and business services. Member of AICPA and NCACPA. Our virtual office provides excellent service to long distance and international clients. Call (910) 399-2705 for a free phone consult.

Client Testimonials

I used Gary’s services to file my 2012 income tax return. This was my first year having an accountant do my return, as I have always done it myself using TurboTax. However, this year I had cancelled debt from my old primary residence which I was forced to convert to a rental property after relocating out of state.

While it didn’t cost me anything to do the short sale, the income tax consequence from the cancelled debt, roughly $50,000 in my case, was enough to move me from the 15% tax bracket to the 25% tax bracket. Needless to say, I was concerned about that.

Finances were already tight and my husband and I are expecting our first child this fall. So the possibility of owing income tax was stressing me out. However, Gary was great at relieving my fears.

He is extremely knowledgeable, answered all my questions and was very thorough. I knew I was in good hands. He kept in constant contact with me throughout the process, keeping me updated on the progress of my return and letting me know what paperwork he needed to complete my filing.

In my mind, best case scenario would have been to not owe any taxes. Second best would be to only owe a little. Well, you can imagine my surprise and delight when Gary told me I was actually due a refund of a little over $2,700.00!

To top it all off, I found Gary’s fee for service to be fair, competitive and affordable; especially given the complexity of this type of return. I am so glad I did not try and go it alone this year. I am extremely pleased with Gary’s service and would recommend him highly to anyone, in fact I already have. If you have cancelled debt from a short sale or foreclosure, don’t freak out. Take a deep breath and call or email Gary. I am grateful I did.

Angie Falke of Holiday, FL

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Even though Gary enjoys helping colleagues, we no longer provide free consults to other tax preparers. He's happy to consult on an hourly billing basis if our schedule allows.

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IRS tax Form 1099-C CPA discusses what should be in the Form 1099-C instructions | 2014 Form 982 instructions | Publication 4681, Canceled Debts,

Form 1099-C CPAs generally subscribe to some third party tax database that cover what the Form 1099-C instructions don’t provide. For a free cancelled debt consult call (910) 399-2705.

The Form 1099-C instructions are for the bank , not the taxpayer. Considering that millions of Form 1099-C will get issued for 2014, you’d think the Form 1099-C instructions would take you through the entire cancelled debt tax reporting process. I handle S Corporation cancelled debt and the Form 1120-S instructions don’t even mention cancelled debt, but there’s a line in Schedule B that directly asks about Form 1099-C. Ditto on Partnerships, the Form 1065 instructions aren’t’ that helpful. So, as a Form 1099-C CPA I’ll try to provide what should be in the Form 1099-C instructions.

Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments

Publication 4681 are the real Form 1099-C instructions, at least for individual taxpayers and Schedule C filers. I think it pays to read Publication 4681 before you read the Form 982 instructions. While Publication 4681 quickly descends into IRS jargon it’s a good prep for the Form 982 instructions. Look for an example that matches your circumstances.

Why isn’t there a single source of Form 1099-C instructions?

Well Form 1099-C covers so many issues you must incorporate other IRS instructions to get the whole picture. Let’s discuss a rental property foreclosure as an example for information not covered in Publication 4681, the 1099-C instructions or Form 982 instructions.

  • The bank takes your rental property and sends you a Form 1099-C, eventually.
  • The amount in Box 2 is taxable income unless you can exclude it on Form 982. That should be on the first page of the Form 1099-C instructions and Publication 4681.
    • Never pay taxes on the amount in Box 2 without exploiting all of Form 982.
  • Check the date on Form 1099-C.
    • It doesn’t matter to the bank because the IRS has many benchmarks on when the banks can forgive debt.
    • But it matters to you. why? You might have been more insolvent, helping you on Form 982, in say March, than December.
    • Note you can use more than one exclusion on Form 982.
  • The foreclosure means you must report the gain or loss on the “sale” of the rental property on Form 4797.
  • Again the Form 4797 instructions cover so much material that taxpayers rely on the tax software.
  • You really don’t want to do that.
    • You need to understand the Form 4797 calculation.
  • The Form 4797 involves the Purchase HUD, the Fair Market Value of the rental property on the date of foreclosure and depreciation recapture.
    • Again there are IRS wrinkles. Sometimes you have to use Form 3115 to claim prior unclaimed depreciation.
    • Often landlords don’t include the buyer’s settlement cost in the purchase of a rental property.
      • Let’s the say the buyer’s settlement costs were $4,000 and the landlord didn’t claim that. That $4,000 means less loss on the rental property foreclosure, meaning you pay perhaps $1,000 of un-required additional tax.
    • The bank’s Fair Market Value reported on Form 1099-C is sometimes optimistic which incidentally increases the bank’s bad debt expense, lowering their tax bill.
    • Look at the county records to see what it actually sold for.
  • In the year of disposition you can claim prior disallowed passive rental real estate amounts. This is found on Form 8582, Passive Activity Loss Limitations.
    • There can be thousands of dollars of legitimate tax deductions lurking there.
  • Remember to close out all the improvements, like say the cost of a new refrigerator, as part of the final year’s Schedule E.
    • Perhaps read the Schedule E instructions for handling the final Schedule E.
    • If you don’t like the Schedule E instructions, Form 8825 is pretty analogous to Schedule E and the Form 8825 instructions are easier to understand.
  • Prepare Form 982.
    • Some tax software doesn’t cover Form 982. But sometimes, if you understand the process, you can do a manual work around.
    • Remember the reduction of tax attributes.

“How can you tell if you have a good Form 1099-C CPA?

    • He’ll discuss potential future tax consequences per the reduction of tax attribute on Form 982.
    • He’ll ask to see last year’s return.
    • He’ll discuss tax positioning if the Form 1099-C triggering even hasn’t occurred yet.
    • He’ll ask about prior disallowed losses if the Form 1099-C is for a rental property foreclosure.”

What about Form 1099-A

Again the Form 1099-A instructions aren’t for the tax payer. In our example you’d do everything except prepare Form 982.

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