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MJG CPA

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  1. Taxpayer is giving me a hard time. He lives on the farm that he rents out. In 2007, he put in a blacktop driveway. He thinks this should be at least partially deductible because it is the same lane that is used by the farm tenant. I don't think a blacktop drive falls qualifies as an "ordinary and necessary" expense. Am I being too strict? What say you??
  2. Yes, I received some of these from my clients also. So be sure to ask your client for any such information [clients don't always bring you all the paperwork they received-at least mine don't].
  3. If you have the 1040 QuickFinder, see pgs. 7-7, 7-8, and 7-15; also Pubs 525 and 15-B if it is an employee stock option. That will at least get you started.
  4. Does a single member LLC need to apply for an EIN if there will be no employees or other reason to have an EIN?
  5. I had something similar a few years back. I was calculating the SEP contribution for a new client (s-corp sole shareholder) and wondering why this year's contribution was so much less than the prior year's contribution. Turned out the prior year was calculated incorrectly. In coming to this conclusion, I was in contact with the Plan Trustee and once they became aware of it, they insisted the excess be removed or applied to another year. We amended the return for the year in question, carried forward some of the excess, but also had to remove a large chunk.
  6. My QuickBooks payroll program just downloaded a payroll update and one of the changes was they are now saying (for 2008) that s-corp medical for >2% shareholders is considered taxable wages for IL. I am not aware of such a change and upon calling IL Dept of Revenue, they were not aware of it either. IL practitions will want to be aware of this issue. Does anyone have any information concerning this change or is it an error by Intuit?
  7. Well, I happened to get #10. I submitted the ATX NOL carryover worksheet (which was different by about $11,000-the change in taxable SS benefits and change in deductible medical) and IRS has rejected it saying it needs to be calculated using sch B of Form 1045. So that's what I am doing. :(
  8. I have just sent you the information. Thanks for your offer. :rolleyes:
  9. I have a 2006 NOL being carried back to 2005 which is not totally used in that year. I'm trying to make sure I have a good number for the amount remaining to be carried forward to 2007. In calculating the carry forward, I brought in the ATX NOL worksheet (the Ln 24-NOL tab) into the 2005 return. It calculates a different number than my manual calculation on sch B of the Form 1045. The difference is due to the change in taxable social security benefits and amount of medical benefits that are now deductible because of the decreased AGI. The ATX worksheet is basically saying that these items don't consume part of the NOL but the 1045 ignores these items in determining the amount to be carried over. If anyone is good at calculating NOL c/o's: 1. Can the ATX worksheet NOT be used for a calculation of NOL usage in a carryback year? 2. Logically, does it make sense that the decrease in taxable soc security benefits and the increase in deductible medical exp. (sch A itemized ded.) would consume part of the NOL? Appreciate any thoughts!
  10. Currently, the client is a general partnership, looking to form either an s-corp or an LLC for liability protection. From a tax and cost standpoint, initially I favored the idea of s-corp due to low cost (in IL). The client has no debt - owns the land outright, so debt basis is of no concern. The sec 754 election available to the LLC may warrant another look - so that's where I'm at right now.
  11. Yes, that was the client's reason for wanting to incorporate. But I'm trying to look at it from a taxation point as well. If both an LLC and s-corp provide liability protection, but there is any tax benefit to be gained by going one way or the other, then I would try to steer the client in that direction. So far, I have not come across anything that would lead me to believe the ultimate tax on the capital gain would be computed any differently if sold within an LLC vs. an s-corp. If anyone else has a better idea, I would appreciate a nudge in the right direction. Thanks!
  12. I agree an atty s/b consulted, but my concern is with the tax implications of the entity choice. Land in IL was gifted to the grown children by parents, with their very low carryover basis. Eventually, land will be sold and proceeds distributed. At that time, there will be a large cap gain. I'm just wondering if there are any tax considerations in choosing one form of entity over another.
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