Lee B

From The Tax Book: Dividends paid on Insurance " Dividends paid on insurance policies are a partial return of the premiums paid. Do not report them as dividends. Include them in income only if they exceed the total of all net premiums paid for the contract."

You don't say what the disposal costs are related to? It's a facts and circumstances decision. For example, under the new regs : 1. Disposal of contaminated soil or remediation of other contaminants usually are required to be capitalized. 2. Disposal of construction debris from tear outs in preparation of leasehold improvements usually is capitalized

Under the Return Manager check the box for your client: 1. In the Tool Bar click the support button 2. About 2/3 of the way down the drop down list select "Customer Service Utilities" 3. Click on the last choice in the next drop down list, "Re-download Forms on Marked Returns" Let us know if this helped.

Look at the exceptions to Time Lived with the Taxpayer, specifically "Temporary Absences" which includes, school, vacation, business, medical care, military services, or detention in a juvenile facility, count as time lived with the taxpayer.

There was a thread about this last month. Support was able to find the assets, but it was a convoluted process and support said it was a known problem which would be fixed at some future date but probably not soon.

Real Estate Property Foreclosure and Cancellation of Debt ATG Publication Date - February 2015 NOTE: This guide is current through the publication date. Since changes may have occurred after the publication date that would affect the accuracy of this document, no guarantees are made concerning the technical accuracy after the publication date. Table of Contents Chapter 1: Overview Purpose Brief History Exceptions Definitions Key Tax Issues Chapter 2: Type of Debt Nonrecourse and Recourse Debt Gain and Loss Computation and Cancellation of Debt Income Chapter 3: Income from Discharge of Indebtedness Bankruptcy Insolvency Qualified Farm Indebtedness Qualified Real Property Business Indebtedness Qualified Principal Residence Indebtedness Audit Techniques Chapter 4: Tax Attribute Reduction Reduction of Tax Attributes Depreciation Recapture Reductions Summary of Tax Attribute Reduction Rules Bankruptcy, Insolvency, and Farm – Attributes Reduction Qualified Real Property Business Indebtedness–Attributes Reduction Qualified Principal Residence Indebtedness - Attribute Reduction Chapter 5: Rental Real Estate Property Introduction Qualifying Dispositions under IRC §469(g) Non-qualifying Dispositions under IRC §469(g) Depreciation Recapture Character of Property at Disposition Lease with Option to Buy Property Rental Audit Strategies Chapter 6: Tax Consequences of Abandonments Chapter 7: Form 1099-A and Form 1099-C Background Examination Considerations Inaccurate or Questionable Forms 1099-A and 1099-C Chapter 8: Community and Common Law Property Community and Common Law Property Systems Community Property Chapter 9: Audit Strategies Summary of Real Estate Property Audit Strategies Case File Documentation Standard Paragraphs and Explanation of Adjustments Job Aids Resources for Real Estate Foreclosures and Cancellation of Debt Income Chapter 10: Rehabilitation Credit and IRC §469 Background Audit Hints Chapter 11: Low Income Housing Credit Low-Income Housing Credit $25,000 Offset Disposition of Passive Activity

I believe I remember a thread about this problem back in January ?

No I don't really see a change here. Although the article doesn't talk about the difficulty of coming up with the basis of components when the original component basis wasn't segregated in the original depreciation schedule. Actually after reading the article, it basically ignores some of the more difficult issues in dealing with partial asset disposition. It's more like the article is pointing out an area of opportunity.

Copied from the CPA Practice Advisor: Recent changes to tax regulations have made it easier for businesses to capture deductions associated with disposed assets such as HVAC units, roofing, lighting systems and other assets, according to the Capital Review Group, which specializes in asset taxation issues. Complying with the final tangible property regulations has just become easier for small businesses filing 2014 tax returns. The recently-issued Revenue Procedure 2015-20 will allow small business taxpayers to change methods of accounting under the tangible property regulations for 2014 without having to file a Form 3115. Small businesses are defined as those with either $10 million or less in assets or $10 million or less in annual revenue. Per this definition, some larger businesses may also qualify for the simplified procedure, such as those that have revenue greater than $10 million but less than $10 million in assets. Previously, taxpayers were required to file a Form 3115 for each automatic change request, which made compliance with the tangible property regulations cumbersome for small businesses and their tax preparers. The new procedure is available on a prospective basis for the 2014 tax year. The tangible property regulations detailed in §263(a) grant business taxpayers with tangible property, such as buildings or equipment, the opportunity to expense items capitalized as improvements in prior years. This enables businesses to claim deductions and capture losses for disposed assets that were not claimed previously. By claiming these additional deductions and losses as permitted by the latest tangible property regulations, taxpayers may significantly bolster their bottom lines through hundreds of thousands of dollars in tax savings. For example, consider this $2,000,000 manufacturing facility: the building entered service in July 2001 and the owners replaced ten 40-ton roof top units at an approximate original cost of $250,000. The units had an annual depreciation of $6410, and as 39 year assets, have 25 years of remaining depreciation as of 2015. At a rate of $6410 per the building owner may be able to claim a total of approximately $160,250 in depreciation balance in 2015. As another example, the owners of an office building will realize similar savings based on their replacement of metal casement windows. The $1,500,000 building entered service in January 2005. The total cost of the new windows was $21,000 in 2005 (100 windows at $210 each), and as 39 year assets, they had an annual depreciation of $538. In 2015, with 29 years of depreciation remaining, the building owners may be able to take approximately $15,602 in depreciation balance (29 years x $538 per year). Businesses may achieve significant tax savings even for replacing one asset. For instance, a $1,750,000 medical office building that entered service in April 2007 replaced a single elevator for $31,000. The elevator was also a 39 year asset with annual depreciation of $1069. In 2015, with 31 years of depreciation remaining, the building owners may be able to claim approximately $33,138 in depreciation balance (31 years x $1069 per year). In light of Rev. Proc. 2015-20, now is the time for taxpayers, particularly small businesses, to seize the substantial savings that are possible by complying with the tangible property regulations. The regulations are complex, and assistance from a qualified tax firm will help taxpayers navigate them and optimize financial gain

Any chance there is a contingent POA named ?

The real question here, is this a non business bad debt on which can be shown an attempt to collect the debt or is this debt forgiveness to a friend which is a gift?

I disagree, I would capitalize the new unit and do a partial disposition on the old unit.

Move to Puerto Rico

3. Tangible Property Final Regulations FAQs now Available The Tangible Property Frequently Asked Questions provide a brief summation and direction on some key elements of the Tangible Property Regulations and include information on simplified procedures for small business taxpayers

Reminds me of those wonderful business opportunities with Amway and Mary Kay

Also, the LLC is a hollow shell until it's funded by the contribution of assets or cash. So hold off on the bank account, operating agreement, SS -4 , etc until such time as your client is ready to use the LLC

Usually the two reasons for obtaining an EIN are payroll or the bank won't open a business checking account without an EIN. Here in Oregon the last several years I have had clients who set up an LLC, who went to the the bank with an EIN and the bank would not open a business account without a copy of the LLC Operating Agreement. If that happens, they may have to go an attorney or at least Rocket Lawyer or Legal Zoom to have an Operating Agreement created.

Be careful the top two reasons that accountants in public practice get sued are Business Valuations and Divorced Clients.

Tax Court decisions are not controlling authority. The IRS decides whether to follow the decision or not. I don't know what case you're referring to. If the IRS agreed with the decision and is following it then you're in good shape. But since the IRS Pubs are saying otherwise, I assume that means that the service does not agree with the TC decision, in which case you don't really have substantial authority.

After reading this analysis I disagree.

Here is a very good analysis: www.fogelcpa.com/Documents/Fogel-TimesharesCSEA.pdf

Wouldn't it depend on what the scholarships were for?The scholarships that I have seen specify what they can used for. Also if you can get a detailed print out of the student's college account, it might help, if it shows shows what funds paid for what charges. Unfortunately some colleges use a balance forward approach, which won't be of any help.

If they don't jump thru the hoops to set up residence in another state i.e., Drivers License, Vehicle Title & Registration, Vehicle Insurance, Voters Registration, etc., then their tax home will remain in their current state.

First, what kind of investment was it and what was the investment vehicle, REIT, LLP etc. Second was he receiving K - 1 s or ? Third, what kind of income was he receiving , Interest, or ? Really need more detailed info

The address to send the Ogden, Utah copy of Form 3115 on page 2 of the Instructions for Form 3115 requires updating. The address change applies to applicants (other than exempt organizations) and exempt organizations filing for advance consent. The Ogden, Utah copy of Form 3115 should be mailed to: Internal Revenue Service 1973 Rulon White Blvd. Mail Stop 4917 Ogden, UT 84201-1000