Would you sign this return if you were Tom and Teris Paid Tax Preparer? Why...
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Would you sign this return if you were Tom and Teris Paid Tax Preparer? Why or why not?
Your clients, Tom (age 48) and Teri (age 45) Trendy, have a son, Tim (age 27). Tim lives in Hawaii, where he studies the effects of various sunscreens on his ability to surf. Last year, Tim was out of money and wanted to move back home and live with Tom and Teri. To prevent this, Tom lent Tim $20,000 with the understanding that he would stay in Hawaii and not come home. Tom had Tim sign a formal note, including a stated interest rate and due date. Tom has a substantial portfolio of stocks and bonds and has generated a significant amount of capital gains in the current year. He concluded that Tim is a deadbeat and the $20,000 note is worthless. Consequently, Tom wants to his sons bad debt on his and Teris current tax return and net it against his other capital gains and losses. Tom is adamant about this!
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