Leaderboard

None of the loans mentioned would create debt basis for an s corp shareholder. Debt basis comes from the shareholder loaning money to the s corp.

We have had this client for many years. They are friends so I don't fire them...but I should...but my wife won't let me...so it is not going to happen. Never listen to my advice and warnings. Whatever....their personal problems become their tax problems, I can only tell them what they should do. We did their bookkeeping for several years for their SP business plus their personal tax return. At the beginning of 2022 they stopped sending their info and stopped answering our texts and emails. OK, so maybe they found someone local? Kinda happy about that because their issues put a strain on our relationship. Last night, my wife gets a text "We put everything in the mail today. Let us know if you have any questions." On Oct 3rd they sent via US Postal Service a full year of bookkeeping records to get done so the tax return can be completed by the 15th.... Not gonna happen. I can't fire them (because my wife...see above) but I can raise the price! Tom Longview, TX

FMV of product is recorded as sales. There must have been a negotiated price before the deal was closed with the buyer. That also becomes basis of vehicle. I have not seen this before, is the buyer of of calves/grain independent from vehicle dealer?

Another excellent article on the subject with a discussion of rules for those that also holdings as limited partners where rental income from the limited partnerships are less than 10% of the total. https://www.thetaxadviser.com/issues/2017/mar/navigating-real-estate-professional-rules.html#:~:text=The election may be made,it in a subsequent year. Within the article, use Crtl-F to find "limited" and you will see this paragraph: This article and the one posted by cbslee have the code references for the rules mentioned within each article.

@Max W If all liabilities are loans that means owners do not have stock basis. Equity of negative 150K could comprise of previous years and current year losses. You should also look at past years 7203's. Double check outside entities loan balances at year end, may be they might have miscategorized shareholders loans as outside loans.

If some or all of those loans created debt basis, and if that basis is less than the amount owed... then the repayment of debt during the year will be cap gain if the debt is evidenced in writing. If not formalized, then the resulting taxable amount would be ordinary income. Could that be what is happening?

But I don't suppose we will get a refund for the overcharged years.

I stopped preparing tax returns for family members and etc. I asked my daughters to find someone else. Last spring, I fired the young woman who used be our dog sitter because she emailed me bits and pieces, never had everything I needed to prepare her return. I decided I was happier not knowing their financial details.

Sound like November clients to me, especially if they're getting a friends & family discount.

My sister-in-law is my very worst client. I love her dearly........I'll be getting her stuff Monday if I'm lucky.

I have found an excellent IT support person who works remotely and is customizing a WISP plan for me, along with ongoing IT support. If anyone here is interested in talking to him, send me a message and I'll pass along his contact information.

Sounds like a variation of a classic barter transaction. Generally, barter transactions are subject to all taxes including sales tax. Does Missouri specifically exclude this type of transaction from sales tax?

it happens here often. It saves on sales tax Farmer sells calves or grain and the money goes direct to the vehicle dealer in exchange for a farm truck. There's paper work for dept of revenue, but it works out there is no sales tax

Iowa State University Center for Agricultural Law and Taxation is an excellent Resource: https://www.calt.iastate.edu/

Thank you every one! I am clear on this now. I will not take those small K1 which I knew for sure he is not involve at all. Because the even choose election to combine all activities to decide, but the ones to take consideration has to be material (except hours) first. so those are not qualify. Thank you so much!

Here is one of the many resources on this topic: https://www.thetaxadviser.com/issues/2014/jul/skarbnik-july2014.html

IR-2023-182 https://www.irs.gov/newsroom/irs-delivers-new-capabilities-to-tax-pro-account-latest-expansion-part-of-effort-to-improve-technology-tools-to-help-tax-professionals-serve-clients

No, it should start sometime later this month. This was approved on Sept 25th and the effective date is Oct 19, 2023. Right now the PTIN renewal page says it is still processing for 2023 new apps and renewals. I got this info from the National Archives Daily Journal of the Federal Register here: https://www.federalregister.gov/documents/2023/10/04/2023-22103/preparer-tax-identification-number-ptin-user-fee-update

A late client, into her 90's, frequently used the excuse of an active forgettery when she couldn't remember something. It was endearing coming from her and an important part of my life and vocabulary now as I near 80!

Sounds like you will need to call the IP PIN help desk, with the client with you. At that time (once you have the PIN) you can ask how a return could have been filed for them without it. OTOH, if they can't find it - did a family member steal their info? Try to "help" by filing a return for them? A filed return with an IP PIN required is doubly suspicious.

My jaded take is anyone who did not claim the ERC in real time should not be handling their own payroll and/or accounting. If it is a corp, those in charge did not meet their fiduciary responsibilities to the corp. Same with the PPP. Just as many who own/manage a business forget to treat themselves as an employee, they often forget their ultimate duty is to their corp - first.