Finding a CPA trip report

[ddubois]

So I want to get a CPA, because I want to figure out if I have any chance in hell of filing as a professional. I also have issues this year with a house sale I want to claim a partial capital gains exlusion on, which is another sticky tax topic. So I google. I find this list of CPA firms (http://www.cpafirms.com/Firmlist/firmlist.cfm). I call one of the places, and some ditsy secratary type calls me, doesn't know what I'm talking about, and says she'll have someone else call me back, which never happens. Then I try another one on the list, explain the particular issues I am concerend about in an email like this:
[ QUOTE ]

I am an individual looking to retain a professional for, at the least, tax filing purposes, and potentially, financial planning services. I have never utilized a CPA before, so I'm not entirely sure what questions to ask, nor what to expect. I have a traditional job as a salaried computer programmer, but the particulars of my situation this year are complicated by 1) a sale of home this year for which I wish to claim a partial capital gains exclusion, and 2) gambling income that I would like to shelter as much as possible, perhaps by filing as a professional allowing the use of Schedule C, and/or creating an individual (or SEP?) 401k, and/or other techniques you might recommend. I need someone knowledgeable about these issues who will defend my assets aggressively.

[/ QUOTE ]
I am happy to get back a prompt response. It reads:
[ QUOTE ]

Thank you for contacting our firm. We would be pleased to assist you by preparing your income tax returns for the year ending December 31, 2005.

This issues you have set forth in your email are fairly common and do not pose any problems for us a CPA's. We mail our clients a tax questioner and tax organizer and ask them to fill them out to the best of their ability before we meet with them. This helps us to get some basic information and support documents for the positions you will take with regard to your income tax returns.

Our fees for these services are based on the time required. Based on the limited information you provided, I would expect our fees to review your prior year's income tax returns for correctness and carryover items, meeting with you to gather sufficient information to prepare your
2005 federal and State of Hawaii income tax returns, and preparation of those returns to be in the range of $1,000.

Please let me know if you would like to set an appointment after the first of the year.

[/ QUOTE ]

Now, this bothers me. From what I've read, on the off chance that I will be eligable to set up a Solo 401k, it needs to be done before the end of the year. Obviously, I don't want to wait until next year and then find out the ship has passed. The fact that he wants to wait until next year to meet implies to me he does not know this. Is it unreasonable for me to expect this CPA be immediately aware of this restriction regarding Solo 401ks?

I have this awful sinking feeling that 90% of the CPAs I will contact are going to know less about gambling income and partial capital gains exclusion issues than I do. I have seen CPAs on the net that seem to know the ins and outs of the gambling area at least, but I feel that I should do business locally, with someone I can meet in person, and not have the tedium of faxing paperwork back and forth. Perhaps this feeling is misguided.

Has anyone found a CPA they are happy with? How did you do it? Should I have a list of questions to "quiz" their knowledge before I initiate any business with them?

[obsidian]

Check out Russ Fox. He actually posts here and has written a number of articles on gambling tax law.

[Skittles]

ddubois,

this seems like a standardized response to me. I would suggest using another email or friend to see if this is the case.

[obsidian]

[ QUOTE ]
ddubois,

this seems like a standardized response to me. I would suggest using another email or friend to see if this is the case.

[/ QUOTE ]
Um, it's not. Just search for his username here or his name on google to find his card player articles.

[Skittles]

[ QUOTE ]
[ QUOTE ]
ddubois,

this seems like a standardized response to me. I would suggest using another email or friend to see if this is the case.

[/ QUOTE ]
Um, it's not. Just search for his username here or his name on google to find his card player articles.

[/ QUOTE ]

Are you a moron? i am talking about the email he received

[obsidian]

[ QUOTE ]
Are you a moron? i am talking about the email he received

[/ QUOTE ]
Wow, I missed that. Just figured since you replied to my post.

[BigF]

[ QUOTE ]
I also have issues this year with a house sale I want to claim a partial capital gains exlusion on, which is another sticky tax topic.

[/ QUOTE ]

Unless you made a ton of profit on your house or it's not your primary residence, you probably don't have to pay any taxes on the sale. Of course always talk to a CPA.

[ddubois]

[ QUOTE ]
Unless you made a ton of profit on your house or it's not your primary residence...

[/ QUOTE ]
.. or you sold after owning less than two years.

[ddubois]

[ QUOTE ]
Just figured since you replied to my post.

[/ QUOTE ]
Since the coming of Quick Reply, the Re: field is mostly meaningless.

[Chadt74]

Actually the rule on home sales is that as long as you used it for 2 of the last 5 years as the primary residence then you can sell it BUT you have to put the proceeds into another house in a certain time frame. If you do not you have to pay taxes if you owned it less than a year = normal income if >1 year 20%.

As for asking CPAs talk to them and ASK specifically if they have experience in the area you need (obviously tax and retirement planning for you). Many times a firm will have someone who handles retirement and one who can do the tax work. Like the other poster mentioned try and talk to the CPAs not some assistant. Also search the state website for assurance their licence is uptodate.

[stormy455]

[ QUOTE ]
I have this awful sinking feeling that 90% of the CPAs I will contact are going to know less about gambling income and partial capital gains exclusion issues than I do. I have seen CPAs on the net that seem to know the ins and outs of the gambling area at least, but I feel that I should do business locally, with someone I can meet in person, and not have the tedium of faxing paperwork back and forth. Perhaps this feeling is misguided.

[/ QUOTE ]

Nope the feeling is not misguided. While I am not a CPA, I have passed the CPA exam and worked one tax season for a large local CPA firm. You probably do know more about the gambling issues than most CPAs do. It's just not that common to find people who are eligible to file as a professional gambler. Also the rules are about as clear as mud. Most CPAs would be able to research the laws, and provide reasonable guidance. Doing business locally does have advantages, but to find a CPA with good knowledge of gambling isues I think you'll have to look to Vegas. If I were in your situation and really wanted to stay local, I'd look for a larger local or regional CPA firm. They will have more resources, and probably a tax lawyer. They will charge more, but I think you'll have a better chance of getting good advice.

[Chamonyx]

I would try another CPA.

There are a couple of careless spelling errors in their reply, and that rings alarm bells for me: I want a CPA who is going to pay attention to details. Your own alarm bells are ringing over the 401K/yearend issue (good catch, btw).

Finally, a grand is over the top for a standard prep/filing where you fill in all the information. 500-750 is more like it.

[BigF]

[ QUOTE ]
Actually the rule on home sales is that as long as you used it for 2 of the last 5 years as the primary residence then you can sell it BUT you have to put the proceeds into another house in a certain time frame.

[/ QUOTE ]

I believe this is no longer true.

[jaydub]

Chad,

This is wrong. It is often stated but wrong.

BigF,

Wrong as well. There are other requirements.

J

[IronFly]

Good thread, let us know how it goes.

[BigF]

[ QUOTE ]
Chad,

This is wrong. It is often stated but wrong.

BigF,

Wrong as well. There are other requirements.

J

[/ QUOTE ]

I was purposely being vague because I didn't want to look it up. If you want a definite answer, the following is from the IRS site.

http://www.irs.gov/businesses/small/industries/article/0,,id=98921,00.html


Basically, you don't owe IRS any taxes on the sale nor do you need to report the sale if both of the following are true.

1. The profit is <= $250,000 on a single return; or <= $500,000 on a joint return.

2. The house was your primary residence for at least 2 years in the last 5 years.

[HEK]

I just had a meeting with my new CPA a few hours ago. Regarding the SEP, he told me to go to fidelity and set up a SEP IRA and a SOLO 401k. He said I DO NOT need to fund it yet...just throw a hundered bucks in each one for now. If I decide, by the time I file, that I want to fund those accounts then I won't have to physically fund them until Oct. 2006.

Where are you from? I'm in the boston area. If you are nearby, I can give you his contact info. He seems pretty good.

pm me if you want the info.

[ddubois]

I'm reviving this old thread. I ended up filing as a recreational player without any professional assistance for tax year 2005, thus avoiding all the issues with SEPs, Solo 401k, 15% social security taxes, etc.

But the game studio I program for here in Hawaii is shutting down at the end of September. I really want to stay at my current residence so after September I intend to play poker as my primary source of income. (I'm making more playing poker than programming anyway, and even if I weren't, I really want the 30-hour work week, no-commute lifestyle.)

Thus, next year I will be have most of the issues I originally posted about in this thread, plus some more, like: "Will I be recreational 3/4ths of the year, and pro 1/4th? Or should I wait until 2007 to declare myslf a pro?", "Can I collect unemployment while being a 'recreational player' until 2007?", "Do I need to make estimated payments?", "Should I really consider moving since gambling is illegal in Hawaii?", and so on.

I'm not looking for answers to these questions (because the correct response is: "hire a CPA"). What I'm hoping for is responses that will touch upon one of two areas:
1) Mechanisms, questions, by which I can surmise the knowledge and skill of a potential CPA, before deciding to become one of his clients.
2) Opinions on the feasibility of, and personal experiences with, working with a CPA that is not local to you.

[molawn2mo]

[ QUOTE ]
I'm reviving this old thread. I ended up filing as a recreational player without any professional assistance for tax year 2005, thus avoiding all the issues with SEPs, Solo 401k, 15% social security taxes, etc.

But the game studio I program for here in Hawaii is shutting down at the end of September. I really want to stay at my current residence so after September I intend to play poker as my primary source of income. (I'm making more playing poker than programming anyway, and even if I weren't, I really want the 30-hour work week, no-commute lifestyle.)

Thus, next year I will be have most of the issues I originally posted about in this thread, plus some more, like: "Will I be recreational 3/4ths of the year, and pro 1/4th? Or should I wait until 2007 to declare myslf a pro?", "Can I collect unemployment while being a 'recreational player' until 2007?", "Do I need to make estimated payments?", "Should I really consider moving since gambling is illegal in Hawaii?", and so on.

I'm not looking for answers to these questions (because the correct response is: "hire a CPA"). What I'm hoping for is responses that will touch upon one of two areas:
1) Mechanisms, questions, by which I can surmise the knowledge and skill of a potential CPA, before deciding to become one of his clients.
2) Opinions on the feasibility of, and personal experiences with, working with a CPA that is not local to you.

[/ QUOTE ]

whoever said the OP's tax return should be in the $500-750 range seriously misreads the OP's want to be educated in the area of tax. If OP were the type of client that would just do as we told him to do, he would be in the $500-750 category but OP seems to require more attention and time.

OP... understand, that in the end, whatever you are charged will be commensurate with the time required to do the job.

There are several gray areas in Gambling Law and various choices to be made by you (choices that others in a similar position would likely choose differently than you) based upon your risk tolerance and future goals. Additionally, you seem like the type that may require the CPA to "prove" why he recommends a certain action rather tan just taking him at his word. This is more time consuming and more expensive. You should understand that.

Most CPAs will give you an initial consult, over the phone, for free, as long as it is not too long and not too specific, in nature.

It is clearly "reasonable" to want to have a "local" professional handling your matters. It is more important to be comfortable with him personally and comfortable with him as a professional, though.

Best of luck in your pursuit. And fwiw, it is almost never a good tax saving idea to file "as a professional" if you can avoid it. IRS, actually, prefers you to file as a recreational gambler.

Nuff said!

Without proof reading, I humbly submit to you to preceeding!

[AAAA]

i do not believe you have to re invest anymore...check with a cpa or the irs.

[broiler]

You definitely do not have to reinvest. The reinvestment exception went away when the rules changed in 1997.