Leaderboard

Yes, the odds of tax saving strategies being successful are directly proportional to the freeloadingness of the friend. That's how it works. This is science.

"Have the client take the exact specs to the dealer, and get a written statement of what the dealer would pay him for it, at the time he won it. Use that to add an 'adjustment to reflect FMV' to the line 21 entries, down on the blue lines to reduce the 1099 amount. In other words, show the full 1099 amount, then 'adjust' it down. The law only requires him to report the FMV of any prize." This is from KCJ post as a reply my similar post on 02/17/09. It worked for my freeloading friend, who rewarded me with a meal at a marginally upscale restaurant over a drive thru. .

Income retains the same character to the beneficiary as it would have been to the deceased. Worker's comp would not be taxable to the parent and therefore is not taxable to whomever receives it.

I would not assume that the amount shown on the 1099 is fmv. Per RIA CHECKPOINT: Even though fair market value of an item is usually considered the price that a willing seller and a willing buyer would agree to, the Tax Court has taken special factors into account in determining the fair marketvalue of awards and prizes. Where it is obvious that a prize winner may not be able to resell the prize for as much as the contest sponsor paid for it, resale value at the time of receipt, not cost, determines the amount of income.43 Value to the winner44 or cost to the payor45 may also be used as factors. 43McCoy, Lawrence W, (1962) 38 TC 84138 TC 841, acq 1963-2 CB 5.44Turner, Reginald, (1954) TC Memo 1954-38TC Memo 1954-38, PH TCM ¶54142, 13 CCH TCM 462.45Wade, Nathan, (1988) TC Memo 1988-118TC Memo 1988-118, PH TCM ¶88118, 55 CCH TCM 413.

To clarify, both the s corp and the shareholder will deduct the taxes and insurance, but the shareholder will also include them as income. So, when the dust settles, the expenses are only deducted once. -1+1-1 = -1

Expenses paid by a tenant – If your tenant pays any of your expenses, those payments are rental income. You may also deduct the expenses if they are considered deductible expenses.

Hey, look at that; a keyboard with integral real-time printer! (Yes, my inner nerd is showing; I know.)

There have been cases in the not so recent past wherein the taxpayer prevailed in reporting the value shown on the 1099-Misc, then on line 21 reducing that amount to what he was able to sell the property (in one case, a car) for, so that the FMV reflected the amount that a willing third party would pay for the property. Lynn