1 NTTC Training 2008 NEW IN-SCOPE RENTAL & ROYALTY INCOME ON 1099-MISC FORM 8606 NON-CASH CONTRIBUTIONS

2 NTTC Training 2008 RENTAL & ROYALTY INCOME PUB 17, CHAPTER 12  Rental and Royalty Income from:  Oil leases  Other similar “income only” sources  Income reported to taxpayer on Form 1099-MISC  Use Sched E to report income  Cannot accept if expenses must be reported against income

3 NTTC Training 2008 DATA ENTRY INTO TAXWISE  From Line 17, Form 1040, Link to Sched E  Complete Line A of Sched E  Go to line 3 or 4, Col A, and link to 1099-MISC.  Complete 1099-MISC  Back out to form Income should now show on line 17

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5 SCHED E, PAGE 1

6 NTTC Training 2008 FORM 8606 PUB 17, CHAPTER 17 IRA NON-DEDUCTIBLE CONTRIBUTIONS IRA DISTRIBUTIONS AFTER NON- DEDUCTIBLE CONTRIBUTIONS ROTH IRA NONQUALIFIED DISTRIBUTIONS

7 NTTC Training 2008 IRA NON-DEDUCTIBLE CONTRIBUTIONS  Non-Deductible Contributions  Alternative when Deductible are limited by Income and/or Retirement Plan  Can be made up to maximum for year  Total of Deductible and Non-Deductible cannot exceed maximum for year.  $5,000($6,000 over 50 yrs of age) max for 2008

8 NTTC Training 2008 REPORT DEDUCTIONS ON FORM 8606  Non-Deductible contributions MUST be reported on Form 8606  Creates Basis in IRA  If not reported, no benefit on distribution  Form 8606 provides cumulative record  Non-Deductible Contributions  Distributions

9 NTTC Training 2008 FORM 8606  Part I – For reporting non-deductible contributions and distributions  Distributions reported here only if there were non-deductible contributions  Part II – Conversions  Out-Of-Scope  Part III – Distributions from Roth IRAs

10 NTTC Training 2008 NON-DEDUCTIBLE CONTRIBUTIONS  Enter amount in Line 1, Part I.  Taxpayer must provide amount for entry into Line 2 (Basis for earlier year).  Found on Form 5498

11 NTTC Training 2008 FORM 8606 Taxpayer info.

12 NTTC Training 2008 NON-DEDUCTIBLE CONTRIBUTIONS  Distribution?  No – Done  Yes – Complete Lines 4 – 14 of Form 8606  Taxwise does calculation automatically  Purpose of this is to pro-rate non-taxable amount (basis) over life of IRA.  Taxpayer must provide value of IRAs

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14 NTTC Training 2008 IRA DISTRIBUTIONS  If there have been non-deductible contributions:  KEY: Taxwise - must check box on 1099-R screen, exclusion worksheet

15 NTTC Training 2008 FORM 1099-R

16 NTTC Training 2008 NON-CASH CONTRIBUTIONS PUB 17, CHAPTER 24; INSTRUCTIONS, FORM 8283 REPORTING NON-CASH CONTRIBUTIONS $500 - $5,000

17 NTTC Training 2008 NON-CASH CONTRIBUTIONS  Claim non-cash charitable contributions  Part of Itemized deductions (sched A)  >$500, must complete Form 8283  In-Scope, $500 - $5,000  Form 8283, Section A, Part 1, page 1  Out-of-Scope, >$5,000

18 NTTC Training 2008 NON-CASH DEDUCTIONS  Report items (groups of similar items) of <$5,000  Securities listed on daily exchange  Taxpayer must provide his/her cost  Taxpayer must provide Fair Mkt Value  Preparer completes form

19 NTTC Training 2008 FORM 8283, SECTION A  In Taxwise: Select Form 8283 from Forms List  Complete Section A  Information carries back to Sched A detail worksheet and to Sched A, Gifts to Charity

20 NTTC Training 2008 FORM 8283, PAGE 1

21 NTTC Training 2008 FORM 8283, PAGE 1