tst

True anything under $500 that us equipment could fall into the de minimus rules for supplies and not worry about section 179 or depreciating. Need to make election on sch c correct?

I guess my question is grouping like assets into one depreciated item? It seems silly to depreciate bands balls and exercise mats but they will have a useful life over a year.

Thank you....Do you agree 7 years? Much of the equipment is $300/$400 each some less like $130 exercise ball and section 179 not an option they appear to want to take. There is probably 30 items each between between $300-$400 that will likely last 2-3 years. Thoughts as depreciating each 7 years and knowing when they dispose could get to be a record keeping nightmare. Thoughts. Would you encourage them to section 179 the smaller items.

How many years should gym equipment be depreciated. Small startup gym? Plus purchase were made for mats bands and balls that have a useful life of more than a year but likely 2-3 years at best. Thoughts. The other equipment 5 or 7? I can't find a class life for gym equipment. I know 7 otherwise but 7 seems long for the major equipment. Any guidance would be appreciative.

code 4 in ohio...guidance on what you can be deducted on the ohio state return. if the deceased had retired and taking own distributions and then at death the IRA transfers to a spouse or kid is it deductible? I say "no"....as the deceased was already taking retirement benefits. many deduct on ohio if code 4 but I believe the regs say that a deduction is only allowed if its a result of a covered employee (still working when passed ) I believe it is deducted for disability and ira transfers only and not annuities. please let me know thoughts on annuities. thanks!

thanks joan it is not a community property state in ohio typically on sch A deductions etc split percentage as most advantageous. because a small gain and likely to go joint next year wanting for ease to put all on one spouses return.

This is a very small gain...understand the loss rules thanks! but ok to give one spouse 100% correct? you don't have to split 50/50 correct?

have a rental owned jointly by husband and wife...better for them to go separate. any reason the sch E cannot be split in 1/2. I know you can move sch A deductions around if jointly owned but never split a rental 50/50. seems messy for proforma reasons if they go joint next year and will likely only give to one spouse but thoughts?

a while back I read that the IRS does not want tax pros lumping short term sales and long terms all together in one line. they want the detail. However I can't find the authority now that supports this. Any guidance? Still OK to lump transactions together as long as you use the 8453 and send in brokerage stmt with detail? thanks for your thoughts. I

meant outside basis worksheet for partners inside assets of partnership

Terry D I appreciate the follow-up and kindness. This is a simple partnership where the two partners bought supplies from own $ and they were all used during year. my confusion was ensuring I wasn't adding something to basis that wasn't "property" per the basis worksheet....and then in turn expensing it as a partnership expense in that same year. supplies were all used this year and cash basis partnership. I appreciate the guidance. This is the first year so I wanted to get the basis correct. They took most profit as payments for services and there wasn't many other expenses except the supplies so they showed a bit of profit so that also will be added to the inside basis of each partner. they each contributed a bit of cash, the supplies (property), the sec $179 deduction (on k-1) and now will have the income to add to basis. I did the inside basis worksheet. thanks again for the follow-up.

My main concern was adding the out of initial pocket supplies expense to basis (giving them basis if not truly basis) and then expensing those same supply items on 1065. They did use all the supplies they contributed out of pocket in year 1 as expenses.

It's cash business....

I'm not dead set on expensing. Just not sure 6 months of windex and cleaning linens, paper towels etc. is contributed capital. I am trying to understand if I expense those out of pocket items on the 1065 if it's also added to their outside basis. Nothing was added as capital to this business. They bought some supplies and started cleaning houses. They made $14,000 and the partners personally paid for some supplies. They withdrew most profits as salaries and the rest is sitting in account to pay for sales taxes. Supplies paid from own pocket. Was only trying to reconcile the proper treatment for expenses and basis.

the next thing is the supplies and office expense $600 if I add to their OUTSIDE basis can they also be expensed on the 1065? thanks all!!! I understand the outside and inside basis...inside is assets in biz, outside cash, property contributed etc.

thanks Terry. I agree tough re: basis and I want to get it correct as first return. thanks for a couple of you hanging in with me... Not much to this...a few expenses. . I have worked through most items except making sure I have their basis correct and the expenses. bottom line: they each paid for out of pocket (cash) for a few supplies and office expenses totally about $600 each out of pocket. And each bought a vacuum cleaner. so each initially contributed about $800. so that is cash and contributed property so I'd think would increase their basis. the key is now can I took those same expenses and 179 expense on the 1065 Under your theory Terry you could not add to basis and then expense. that is where I was going with my initial post by saying that I was expensing these items and they had no basis. But then others said how can not have any basis? the rest is a bit of income they drew as salaries. I certainly don't want to double count as basis and expenses but seems to be conflicting theories any help appreciated. I have researched on my own but no explanation if the expenses they paid out of pocket can be added to basis and then in turn expensed on the 1065. sounds like the 2 vacuum cleaners are inside basis (assest) and sec 179 ok the next thing is the supplies and office expense $600 if I add to their inside basis can they also be expensed on the 1065? thanks all!!!

to summarize my unfortunate rambling(obviously confused about expense treatment) any $ a partner pays out of their pocket (not revenue or sales) for supplies, equipment or other expenses (phone bill, meals, etc) increases their basis and then the partnership takes deductions for the same expenses correct? everything they pay out of pocket is contributed capital and then is an expense on 1065 if expenses are paid out of revenue then no increase to partner basis thanks so much re: help on sec 179 I understand the needing of basis to take sec 179. the expenses they paid out of pocket were/are confusing me....hope above correct.

they didn't put in $ personally in the biz account they paid for out of pocket and then I took as 1065 expenses but didn't add to basis the $ they paid for supplies.

Should I just take the expenses they paid for personally at beginning and add to basis... but then I wouldn't deduct on 1065 correct. only deduct expenses paid out of profit on 1065 which is what they are doing now.

its a cleaning business and they bought two vacuum cleaners..that's it. $400-$600. I didn't want to depreciate so sec 179'd them. Rest of expenses were initially paid put of pocket (cleaning supplies) and I took those as deductions on the 1065. Can't increase their basis for the supplies can I as I took the expenses on 1065? they had some profit this year and that's how they paid sales taxes and are now using the little bit left over to buy supplies etc. they paid a registration free to get the LLC and that was it personally. they haven't not made any other contributions the only thing is supplies and they now pay for them out of what isn't a draw initially was personal funds but I took off as expenses on 1065 thanks regarding the sales tax. makes sense they collect from customers and then just pass on. I won't deduct the sales tax as I didn't put in gross income. re: the guaranteed payments. they decide what they want to take out but I called it guaranteed payments (subject to se) cant be distributions as no basis this year they made $14,000...$11,000 took out in GP. About $2000 left in an account right now. and most expenses of about $2,000 they paid for personally initially on 1065 but told them to start using the $2000 in account to buy supplies I appreciate the help I won't let this return leave til correct. expenses may be throwing me. I put everything they spent on supplies personally and out of the little bit of profit as expenses on the 1065. so they showed a small profit after GP can't use that as basis the personal part as I deducted the expense right? so combination of both personal AND biz on supplies and cleaners...but I took all as expenses.ok to use the personal expenses as basis---but then I couldn't claim as expenses on 1065 right?? thanks for any guidance. I should stick to personal returns!

thank you both very helpful...new to partnerships as you can see :-) yes it showed up as a carryover but what confused me is that the city returned allowed the section 179. so that confused me but yes a carryover shows up. I use drake software and wondering why local allowed it??thoughts? this is a service oriented basis small partnership started in 2013- in infancy they earned $14,000,,,took out $11,000 (I labeled as guaranteed payments) the rest expenses. Put in $65 each to buy supplies so not sure there will ever be basis???? basis can only be increased by contributions etc correct??? what will increase there basis if they take everything out they earn? they take out what they earn and pay expenses. this year a small income that did transfer to K-1. but in following years....so even though general partners they can't take ordinary losses on personal return. it's not passive income. always have to have basis? it did allow me to take mileage against their guaranteed payments as a deduction on part 2 of E...as an unreimbursed partnership expense. was that correct??? took this on as a small return to get my feet wet but not sure how they will ever have basis. thanks for any help.

Can they take losses as general partners with no basis...non passive income... also taking sales taxes and any state and local taxes the partnership pays is appropriate correct?

THANKS FOR REPLYING.....I ENTERED IT MYSELF...IT SHOWS ON THE K-1 AS SECTION 179 BUT DOESNT TRANSFER. IT IS A PARTNER DEDUCTION RIGHT AND SHOULD SHOW UP AS A DEDUCTION IN PART 2 OF THE E CORRECT? I ONLY HAVE THE GROSS NONPASSIVE INCOME AND THEN I HAD SOME UNREIMBURSED PARTNERSHIP MILEAGE. THE SECTION 179 DOESN'T COME OFF PARTNERSHIP RETURN CORRECT AS A DEDUCTION IT IS A K-1 PARTNER LEVEL ITEM???

new to partnerships... filing a 1065 and took section 179 deduction. is it correct that it isn't deducted from the partnership expenses but goes on k-1 to partner. problem is it doesn't show up on part 2 of schedule E as a deduction on the partners personal federal retrun? also, ohio llc taxed as a partnership...two general partners...none limited...but and Ohio? which not sure how general partners can have limited liability. I taxed all guaranteed payments with SE tax. can and LLC can they take losses with no basis? not passive...its a pure service company and minimal capital contributed a bit of $ for supplies. also, all taxes they pay (sales tax etc) can be deducted from the partnership return as an expense correct? thanks so much for advice. my main issue is making sure they get the deduction for the section 179 expense, its not showing up on partnership expenses on 1065. it is on line 12 of k-1 but on personal federal return I don't see a deduction on part 2 of E??? why? the K-1 doesn't transfer it.. thanks kindly