pkmiller94

Have a client who with 5 others lent $850K to a RE guy to buy an apartment building (which was vacant) - the intent was to earn 14% interest (they found this deal from a broker who advertise in the WSJ) Of course the RE person did not make any payments - clients had to foreclose and they formed an LLC - Now they have sold the building about a year after for 375000- (after back taxes etc, the net was about $200K) - so the actual cash loss was $650K Now - no one need the capital losses - but everyone could use ordinary losses (as long if it is not passive) - one client we can put as active the rest are passive investors. The group (not the same 5 guys) have done 3 of this type of deals. I might be able to call the LLC (only one property in the LLC) an lender with a bad debt and a bad debt recovery. Showing an ordinary loss of $650K (but with only one active partner, and he is the tax matters partner) - so an other client who is passive complain to me that he does not have any passive income to offset. He started to tell me about the 1231 rules allowing them an ordinary loss to. Any advice on the best way to handle these partnerships - I am preparing first year tax return for 3 LLC all with mostly the same issues - (one of the LLC did collect rents) - but all have huge losses.

Have a client who is making investments in a public oil/gas partnership There is supplement informtion thay says "Your share of DPGR is from qualifying oil and gas activities, as reportable on Form 8903" - The k-1 show $3K in box 1. Box 13j depletion of $800. Box 13T saws to look at the supplement statement. 13T1 Domestic Production Gross Receipts -12K 13T2 DPGR Cost of Goods Sold -10K 13T3 DPGR Allocable Expenses -1.5K 13T4 W-2 Wages Properly Allocable to DPGR - 0 17E Oil, gas, & geothermal deductions -10K F1 Excess Intangible Drilling Costs 767 20T1 Sustained - Assumed Allowable Depletion 1537 20T2 Cost Depletion 1540 20Y1 Gross Receipts -13K In ATX all 3K is going to page 1 as income - I to take a election to take the depletion of $800 (or is it already included in box 1?) The TP has a w-2 of about $50K Question - Cannot get anynumbers in 8903 - but when I override - I get about a $25 deduction Can I take the % depeltion over the amount on the k-1 the tp claims she is losing money on this and cannot believe the taxable income Any thoughts?