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If this were my thread, my answer would be: Because hobby. I hate these "businesses" that lose money year after year after year and I fired two this summer. I know, I know. IRS is not going to get them. I don't care. My farm business makes money. Sure enough. If you're a grown @$$ man losing money on a farm business, you're lying. Either it ain't a business or you ain't losing money. I told one that his farm was a swimming pool. You're trying to write off your swimming pool. Sorry, Edsel, I too am off on a rabbit trail. I don't see any way to minimize depreciation unless you say 50% of the use is personal or something. Have him drive it to church or Wal-Mart. All I can come up with.

You really can't make this stuff up. This disaster wasn't caught by Equifax but by a user of their website. Lucky it was Abrams, who has a 30-year career in IT security and knew exactly what was happening when the malicious software was downloading. He went into "professional mode" and tried again 30 times (and the malware attempted to download all 30), taking screenshots and writing up directions for what users should do when this happened. Equifax's response? "Out of an abundance of caution" we took that webpage down. An abundance of caution? Isn't that what you say when something doesn't appear to be a big or widespread problem but you want to keep your clients happy so are taking action even if the situation doesn't really call for it? After what just happened to them you'd think their IT would be like Fort Knox by now. The malware didn't affect the company, just the people going to their site for their free credit report, so what's the problem? Most decent businesses that have good privacy/security policies in place and actually follow them demand that their vendors have the same or better standards. Any company that still uses Equifax for credit data obviously doesn't follow this creed. I recently shopped my insurance and asked a potential insurer what credit reporting agency they used so I could unlock my frozen report for them. They said Equifax, and I said no dice, I'll try other insurers. One little problem is that the IRS is using Equifax. How do I stop doing business with them?

I never send any taxpayer information to ANY third party. Period. I will send it to the taxpayer, then they can pass it along to whomever.

Perhaps some of this equipment hasn' t been actually placed service ? Perhaps some of the equipment has mostly been used on land improvement projects that should be capitalized ?

Well, in an abundance of caution on the part of the IRS, they have "temporarily suspended" their no-bid contract with the Equifax. Did someone read the newspaper finally at the Treasury Department and realize just how stupid they looked? But I bet Equifax still gets the contract in the long run because the IRS does not have a plan B in place for a different vendor to come in and take over security verification. I am willing to bet a Vende Fappuccino from Starbucks that the design of the security verification platform at IRS only works with Equifax. Tom Modesto, CA

Ah, *there* is the $64,000 question! When you find an answer, PLEASE let us all know!

Sorry, @BulldogTom, but I don't take "sucker bets" ever. LOL!

While the tax return is showing a loss due to depreciation, it would be obvious that he's not actually incurring a loss - right? Many real estate investors will go a decade without showing a profit on their tax return. $5 million in assets and he's recognizing $100k in revenue is the problem (I'm assuming you were just using a low example).

I agree with Gail and was typing out the same thing. If I understand correctly: AZ contractor is AZ LLC -->owned by DE LLC -->owned by DE corp. If that is the case, I see your logic in reporting on the DE 1120, and then you have the apportionment that will work back to zero activity within the State of DE and no tax due to DE. So the DE corporation will file a Fed 1120, DE 1120 apportioned to zero, and whatever AZ requires for the corporation.

From a federal standpoint that seems correct - the AZ LLC is disregarded to the Delaware LLC which is disregarded to the Delaware Corp. which must file an 1120. I know Delaware is considered a tax haven for corporations, but I assume some kind of Delaware and Arizona return would need to be filed.

Flow-chart please

Thank you for your response, but several thousand dollars worth of effect is lost relating to wasted std deductions and exemptions. Depreciation recapture on equipment is at ordinary income rates, because he never sells or trades real estate. His massive real estate is what provides collateral for loans and the loans are what enable him to spend the ridiculous prices for equipment, so there is no chance he will ever sell real estate (which is land only and wouldn't have recapture anyway). Buying into your idea, NOL's are often preferable in cases where you are confident the succeeding year is going to be very profitable. NOL's can often reduce income off the top in years of high tax brackets in such a case. However, this is not likely to happen with my client, given his track record. I believe you are comparing my client's operation to some of your own people who are involved in real estate, and the two do not really compare. I fear what happens to his survivors if he passes owing all that money against his assets. You can't always save people from their own folly. I'm going to ask again for ideas to minimize depreciation. There has been quite a bit of helpful discussion about why I should or shouldn't do one thing or another, but I haven't heard the first idea about how to minimize depreciation. Often on such a forum, the original question is ignored.

Tom, I wish you luck. Personally I applaud you for advocating for your client & doing whatever you can to help him, rather than attacking him or rubbing salt in his wounds. Your approach is the mark of a true professional, IMO.

I have a client that is owing money with his return and he's actually paying it on time. No he isn't. He may have an extension to file, but ain't no such thing as an extention to pay.

I think it is ridiculous that when you purchase software and it doesn't work you then have to pay someone to "fix" it. If I bought an appliance and it didn't work I would expect it to be fixed or replaced, but that isn't the way it works with software. I understand that sometimes the problem is with my setup and not their product, but I still find it incredibly frustrating.

It's a nice group now. I learn a lot there as well as here so I routinely use both.

Not in the instructions yet. https://www.irs.gov/uac/where-to-file-your-taxes-for-form-2553

That is ALWAYS the bugaboo. I have never, ever, had a balance sheet balance out properly without (sometimes a LOT) of massaging beyond the "normal" book-to-tax differences and timing differences. OTOH, it has also led me to unearth some serious errors in what my clients have reported to me, that in a Sch C would never have been noticed. It usually ends up revolving around personal loans made to the company, to get them through a cash-flow hump (or vice-versa), that is later forgotten about.

The most practical seminars are NCPE. And by 'practical' I mean useful. But first you need to read the instructions for those business forms to get yourself familiar with the lines. Then try to do a sample return using a P&L and balance sheet from one of your business clients. NEVER skip doing the balance sheet and M-1 on these forms because doing those proves that you have it correct. Also, on 1065 and 1120S you must calculate the owner's basis to see if losses are deductible or not. 1065s can have plenty of debt basis but 1120S... well I don't like to have any debt basis because it's too complicated. If my sole shareholders tell me they loaned money to their S corp, I just show it as a capital contribution to make my life simple. You have a lot to learn.

Check out NATP; I think they have webinars on those topics

I used to buy some of the PPC Deskbooks which are good references with a how to do it theme, although they are a bit spendy.

SAN FRANCISCO — Equifax says its systems were not breached and blamed a third party vendor for running malicious code. On Thursday a security analyst reported a link on the Equifax website redirected him to a third-party site that encouraged him to download malware. "The issue involves a third-party vendor that Equifax uses to collect website performance data, and that vendor’s code running on an Equifax website was serving malicious content," Equifax said in a statement. "Since we learned of the issue, the vendor’s code was removed from the web page and we have taken the web page offline to conduct further analysis." Security analyst Randy Abrams said he encountered the malicious link when downloading his credit report. A link on the Equifax site directs users to an announcement that the credit report assistance page is down for maintenance. Shares dropped as much as 3.5% Thursday. "This incident should serve as a warning for any website operator to know and control vendor risk in the digital world – all website code, both first and third party, should be continuously monitored to avoid these scenarios," Chris Olson, CEO of cybersecurity firm The Media Trust said in an emailed statement. Be careful everywhere !