[cdmckay]

I have a T1 return that has self employment on wife's end, as well as she receives the Universal Child Care Benefit, on the other credit screen on line 6, I receive an warning saying, in situation of net loss, this may be revised. I do not understand what the programming is meaning? What would be/ should be revised? Can anyone help. I am also wondering about carrying the loss back, how do you know how much can be carried back to previous years, and how much would be to their best benefit?

[JohnNP]

cdmckay, on 10 April 2010 - 02:07 PM, said:

how do you know how much can be carried back to previous years, and how much would be to their best benefit?

by having an accountant prepare the taxes?


if we assume that the tax return is otherwise correct, the warning is referring to s122.51 (as any tax preparer should know)

since its possible that the business income for tax purposes may not correct, i would recommend that an accountant review the tax return

[cdmckay]

JohnNP, on 10 April 2010 - 07:41 PM, said:

by having an accountant prepare the taxes?


if we assume that the tax return is otherwise correct, the warning is referring to s122.51 (as any tax preparer should know)

since its possible that the business income for tax purposes may not correct, i would recommend that an accountant review the tax return

apparently this forum is not for people wanting to learn , but for people that already know it all.

[unknown]

cdmckay, on 10 April 2010 - 05:40 PM, said:

apparently this forum is not for people wanting to learn , but for people that already know it all.

Actually, you are posting in the professional tax preparer section, not the DIY section...

The DIY section is the blue Quicktax section....

[JohnNP]

cdmckay, on 10 April 2010 - 03:40 PM, said:

apparently this forum is not for people wanting to learn , but for people that already know it all.

if you are a consumer attempting your own tax return, the appropriate product is quicktax (see blue forum)

[unknown]

JohnNP, on 10 April 2010 - 05:51 PM, said:

if you are a consumer doing your own tax return, the appropriate product is quicktax (see blue forum)

Johnnyboy, are you reviewing?

I just said that....

[JohnNP]

Bert_Mulder_CGA, on 10 April 2010 - 03:53 PM, said:

Johnnyboy, are you reviewing?

I just said that....

i must have been reading something else before clicking - apparently you type and click faster than me - must be those new wings

[Tim Parris]

cdmckay, on 10 April 2010 - 06:40 PM, said:

apparently this forum is not for people wanting to learn , but for people that already know it all.

Yes, this is...

Had you posted to the QuickTax forum, you'd be in the place for people wanting to learn. This forum is for those who have taken professional training and are generally expected to know basics plus how to do research. QuickTax forum is set up for people using the retail product.

For example, the people in this forum should know the difference between an ITC, an IC and an IT. (ITC is an Income Tax Credit or Input Tax Credit, depending on if you are referring to Income or Excise Tax, one of which is refundable and the other is not, IC is an Information Circular and IT is an Interpretation Bulletin.)

[ChrisG]

Tim Parris, on 11 April 2010 - 06:12 AM, said:

Yes, this is...

Had you posted to the QuickTax forum, you'd be in the place for people wanting to learn. This forum is for those who have taken professional training and are generally expected to know basics plus how to do research. QuickTax forum is set up for people using the retail product.

For example, the people in this forum should know the difference between an ITC, an IC and an IT. (ITC is an Income Tax Credit or Input Tax Credit, depending on if you are referring to Income or Excise Tax, one of which is refundable and the other is not, IC is an Information Circular and IT is an Interpretation Bulletin.)

And what about the TTC?

[Arliss]

ChrisG, on 11 April 2010 - 11:24 AM, said:

And what about the TTC?

Line 364. Do some research. :D

[Tim Parris]

ChrisG, on 11 April 2010 - 10:24 AM, said:

And what about the TTC?

TTC = Bad Press

[cdmckay]

I apologize for being in the wrong forum, I am using Profile, but I am not a Certified Accountant, not sure if Quick tax will help me either but I can try. Thank you.

[Tim Parris]

Why did you get ProFile as opposed to QuickTax?

ProFile does not have the help or assistance that QuickTax does - It is designed around people who have significant training in tax.

[unknown]

cdmckay, on 11 April 2010 - 09:01 PM, said:

I apologize for being in the wrong forum, I am using Profile, but I am not a Certified Accountant, not sure if Quick tax will help me either but I can try. Thank you.

Are you preparing tax returns for others, and getting paid to do so???

I hope you are aware of the penalties and may (and often will) be levied against taxpreparers for faulty preparation...

Your skill set indicated by your question in the OP here indicates you HAVE NO BUSINESS PREPARING RETURNS FOR OTHERS. It is an open question if you should be preparing your own return....

[cdmckay]

Bert_Mulder_CGA, on 12 April 2010 - 08:51 AM, said:

Are you preparing tax returns for others, and getting paid to do so???

I hope you are aware of the penalties and may (and often will) be levied against taxpreparers for faulty preparation...

Your skill set indicated by your question in the OP here indicates you HAVE NO BUSINESS PREPARING RETURNS FOR OTHERS. It is an open question if you should be preparing your own return....

No I am not being paid..... I do not recall saying that I was. I worked for H & R Block for 3 years, and have taken a few courses thru the knowledge Bureau and am working towards my designation...and purchased Profile because that is what you are taught to use. I am simply trying to learn ...and thought this was open to people with questions to receive advise from people that are experienced....although I feel as though I have been completely cut down and ridiculed and should apoligize for asking professionals for their opinions.

At the top of the page it says " We encourage you to ask questions and share your own thoughts, experience and advice".

[unknown]

1. you are not being ridiculed...

2. It would help if you came to this board honestly, stating you are a student of accountancy, and that you have encountered these questions in your studies... Instead of appearing to be either a DIY, or, worse, a barber that got hold of a scalpel about to do brainsurgery....

3. Welcome to the racket we call 'public accountancy' I think... You do not have to be crazy to go through tax season, but it helps.... Hope you like long hours....

[unknown]

Oh yeah, almost forgot..

4. give yourself 20 years in this racket and you will be just as cynical as all the rest of us professional preparers here... If you survived they first 5....

[Madeleine@Intuit]

cdmckay, on 10 April 2010 - 11:07 PM, said:

I have a T1 return that has self employment on wife's end, as well as she receives the Universal Child Care Benefit, on the other credit screen on line 6, I receive an warning saying, in situation of net loss, this may be revised. I do not understand what the programming is meaning? What would be/ should be revised? Can anyone help. I am also wondering about carrying the loss back, how do you know how much can be carried back to previous years, and how much would be to their best benefit?

In this situation, do not subtract the UCCB. (override line 6 to zero)
The UCCB cannot be subtracted if it was not included at line 1 or 2.

[unknown]

Maddie, you are amazing...

How do you decipher that from the OP's sketchy information....

[Peter@Intuit]

cdmckay, on 10 April 2010 - 03:07 PM, said:

I have a T1 return that has self employment on wife's end, as well as she receives the Universal Child Care Benefit, on the other credit screen on line 6, I receive an warning saying, in situation of net loss, this may be revised. I do not understand what the programming is meaning? What would be/ should be revised? Can anyone help. I am also wondering about carrying the loss back, how do you know how much can be carried back to previous years, and how much would be to their best benefit?

Hi,

If I understand your situation correctly, the spouse has UCCB income but overall, has a net loss.

For purposes of the refundable medical expense supplement, part of the calculation asks you to determine the "adjusted income" of the individual. This gets defined in section 122.6 of the federal Income Tax Act to essentially be the income for the year if you back out any UCCB or RDSP (amongst other things).

Let's highlight this with an example:

Taxpayer: Income of $5,000
Spouse: Loss of $10,000 (which included UCCB income of $1,000).

Taxpayer's adjusted income is still $5,000. Spouse's adjusted income is zero ($10,000 loss, add back $1,000 for UCCB, but since you're still in a loss position and income cannot be negative for these purposes, income should be zero). Combined adjusted income is therefore $5,000, which is the amount I would want to see on line 7 of that calculation.

If you follow the CRA's calculation, however, line 1 will be zero, line 2 would be $5,000, and the addback on line 4 is $1,000, giving you a combined adjusted income of $6,000, which isn't correct (and thus the audit message).

In this example, I would override line 6 to zero.

A few things:

1. If you're not claiming the refundable medical expense supplement, you can just sign-off on the message
2. If you are claiming it and have losses mixed in with UCCB and/or RDSP income/deductions, you should review each taxpayer's "adjusted income" to make sure the adjustments on line 6 and/or line 10 make sense.
3. Related to 2., this is something I would expect Profile should do automatically for you, and I'll put in the recommendation that we make these adjustments on behalf of the preparer for a future release. In the future, if line 6 doesn't equal line 4 + line 5, this will be the reason. :)

My apologies about the confusion over the audit message (and the long winded response!). If you have any further questions regarding this, please let me know.

Peter

Edit: Zoinks! Beat by Madeleine!
Edit x 2: This is the appropriate forum for Profile questions. Beware of posters with 100+ posts! ;)