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No, the basis of the equipment is its transferred-in basis, as is its holding period, and depreciation is calculated on that. You only increase the value if the partner is going to recognize gain. Do you have that situation that requires gain recognition or do the assets have liabilities attached to them? Maybe this link spells that out more simply: http://sherayzenlaw.com/cash-and-property-contributions-to-partnerships-and-their-affect-on-a-partnership-interest/ What you will have is a disconnect between the depreciation basis of the asset (that is also the contributing partner's tax basis) and his capital account (that is the FMV of the asset contributed). The following article is excellent and has examples of the contribution by 2 partners and how that is recorded, and goes on to show the effect on basis and capital accounts of each partner when a contributed asset is later sold: https://www.forbes.com/sites/anthonynitti/2017/08/15/tax-geek-tuesday-applying-section-704c-to-contributions-of-property-to-a-partnership/#5f60cc3b44ca Is this the same Sch C to LLC conversion that you asked about back in late July in this topic? If so, reviewing that discussion again may also be helpful.

And that is one of my best pet peaves. If the bank wants to be in the payroll service business does that mean I can be in the banking service business. Just saying - they have no more business doing that than the man in the moon.

If you're going to tackle a 2013 income tax return, I would suggest that you obtain a transcript from the IRS first. That way you know exactly what is recorded for that SSN. Then, you can take those numbers and prepare the return. If you see that BOTH the 1099-MISC and the W-2 were reported, complete Form 4852 with a complete description of the problem, and send it attached to the 1040. Good luck!

No worries, I am jokester myself. Did you hear about the man that wanted to stop talking to his wife? He loaned her money and never heard back from her.

I wanted to stretch the imagination without insulting.... Not all y'all know me very well. I have fun with the folks I like... For example, my chosen moniker, Edsel, was named for one of the most colossal marketing failures of the 20th century...

Payroll is one of our profit centers. It is the lowest part but we have about $30,000 per year. And they are all small businesses that we do it for.

Illigitimas, that's a great question. You're from somewhere Illinois and I would think the fee structure would be tremendously different in Carbondale versus Cook County. Payroll is my least favorite service, and if you have a client who won't do what he's told, there's no fee high enough. There will be ugly letters and penalties from the IRS and state, and we will be getting the blame for them. I will attempt to answer the question as what is appropriate for Manchester TN, which would even cheaper the Carbondale because we have no SIT. $35 per payroll, plus $1.50 for every active employee. Then $35 for each payroll tax report, meaning one per quarter for SUTA and 941, and ever how many there would be for your state withheld SIT. End of year $35 for each W-3, plus $2.00 for every W-2. And this is on the cheap side. This is a representative answer from my part of the country, as I don't put my actual rates on a public forum or over the phone.

I charge a minimum of $60 for 1 employee with 1 monthly paycheck.

https://www.irs.gov/newsroom/american-opportunity-tax-credit-questions-and-answers Q19. Can F-1 Visa students claim the AOTC? A. For most alien individuals present in the U.S. on an F-1 Student Visa, the answer is no. Generally speaking, the time spent by an alien individual studying in the U.S. on an F-1 Student Visa would not count toward determining whether he or she was a resident alien under the substantial presence test for federal tax purposes. Thus, if you are an alien individual with an F-1 Student Visa, you are probably a nonresident alien. In general, if you are a nonresident alien for any part of the year, you do not qualify for the AOTC. However, your parents may qualify for the credit even if you are a nonresident alien student if they claim you as a dependent on their tax return. If you are a U.S. resident filing Form 1040, and your parents do not claim you as a dependant, and you meet all of the other requirements for the credit, you may qualify for the credit.

Since this was for 2013 and even though you just received the information; possibly the IRS has already received all and you just need to ask them what they have. You might consider requesting a: Wage and Income Transcript A wage and income transcript reflects a taxpayer’s income as reported to the IRS. This type of transcript is available for the prior 10 years, but the most recent year’s information may not be complete until July. A wage and income transcript is where all of a taxpayer’s information concerning W-2s, 1099s, 1098s, K-1s, and 5498s is shown, and can be helpful for verifying employment or filing an extended tax return. These transcripts can be longer than 100 pages, but tax professionals may request a one-page summary version. HOPE THIS HELPS and yes, the things we learn from this forum are FANTASTIC ! As are those answering questions and giving ideas. THANKS !!

I had a somewhat similar situation several years ago with a bookkeeper that made a mess in trying to fix a 1099-misc with her incorrect use of the "void" and "corrected" boxes. In writing to the client, I expressed my concern over whether the revisions were handled properly and described what the correct filing process with the IRS should have been, and asked that the client follow up with the bookkeeper. Of course, my client and I had already discussed all of this, and this letter to him was written to sound like a general inquiry from me that served as an easy way for him to ask the employer without sounding accusatory by him simply passing it along to the bookkeeper. Maybe something like that would work in your case too, and it would be a way to also mention other benefits that this company may offer to its employees that your client may have been eligible for such as pension and profit sharing, and expense reimbursement plans.

Absolutely. The employer, if performing as directed by the IRS, should prepare a W-2c for the year in question, and follow it up with a 941c or 941x. If the employee's portion of FICA/medicare is non-recoverable, the W-2c should be "grossed up" to include a phantom withheld amount for FICA/medicare. The employer will have additional payroll tax liability resulting from this, probably at least DOUBLE what he would have paid if properly filed to begin with. Ever what state he is in also benefits by a probably increase in the SUTA tax - most overwhelmingly assessed against the employer as well. The employee can prepare an amended 1040-X, claiming the new W-2 as wages, and subtracting of the gross amount on his schedule C. Expenses related to this amount should be reduced as well, and transferred to schedule A subject to 2%. (Assuming he included a schedule C on his original return.) Could result in a refund. Of course, this predisposes that the IRS was correct in recharacterizing the income to begin with. They are known to be very aggressive in reclassifying payments to employee-status, and not very correct. Several years ago there was a list of "20 factors" that they supposedly considered, and then they abandoned the 20 factors because some of them gave powerful support to the other party. They would rather the decision be more subjective than directed by axioms, so they can be less accountable for their decisions.