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DANRVAN

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Posts posted by DANRVAN

  1. 1 hour ago, NECPA in NEBRASKA said:

    I am really confused as to why the LLC is making payments for the loan.

    If the partnership made the payment to the former partner it is considered a redemption of his interest by the partnership,  instead of a buyout of his interest by the remaining partners.

    • Like 1
  2. 5 hours ago, Marie said:

    delay of selling cows during a drought.  I believe a farmer has 3 years to replace breeding stock,

    If you are using ATX, go to elections and use the tab for "Dispositions, Disasters...". Then use the first option on top of the page.

    If you are deferring income from sale of calves due to drought use the 3rd one.

    • Thanks 1
  3. 16 hours ago, BrewOne said:

    looks like the IRS position would be for 27.5/39

    And after considering Reg §1.263(a)-3 (e)(2)(ii)(B)(2) I have to agree.

    The thought that a septic tank for a single dwelling rental would be classified as a Building System instead of a land improvement never crossed my mind.

    • Like 1
  4. I use asset class 00.3 Land Improvements with a 15 year life. 

    Class 00.3 includes non-municipal sewers.

    A septic tank is part of a sewage system that includes pipes to the tank and pipes from the tank to the perforated pipes in the drainfield.

    I  have not seen an authoritative cite to challenge this position.

    The fact that a modern cement tank will last longer than 15 years is a mute point for tax depreciation purposes (they will for sure last longer than older metal tanks that were prone to rusting out).

    • Like 2
  5.  

    12 hours ago, jasdlm said:

    leave the bank account open to handle any final issues, taxes, etc, and make final distributions to owners, but you can't conduct any more business,

    The code is fairly clear on this.  A corporation is in existence if it retains a bank account and is in the winding down process regardless of state law, therefore a return is required.

     

    12 hours ago, jasdlm said:

    make final distributions to owners

    The final distributions are reportable transactions.

    Per 1.6012-2

    (1) "shall make a return of income regardless of whether it has taxable income or regardless of the amount of its gross income."

    (2) "A corporation in existence during any portion of a taxable year is required to make a return. If a corporation was not in existence throughout an annual accounting period (either calendar year or fiscal year), the corporation is required to make a return for that fractional part of a year during which it was in existence. A corporation is not in existence after it ceases business and dissolves, retaining no assets, whether or not under State law it may thereafter be treated as continuing as a corporation for certain limited purposes connected with winding up its affairs"

    • Like 2
  6. 17 minutes ago, schirallicpa said:

    final return should not have been filed because the bank account was not closed yet.

    That is correct.  A corporation is required to file a return as long as it is in existence, whether it has any income, expenses or not.

    • Like 1
  7. 7 hours ago, BrewOne said:

    searching for a way to print 1040-ES vouchers for the spouse (with their SSN printed out).

    I have never had to to that, but try duplicating the return and switch wife to primary taxpayer. 

    Then change husbands SS# to something like 111-11-1111 so the duplicate return cannot be filed by mistake.

    Use the duplicate strictly for printing the estimates.

     

  8.  

    3 hours ago, Patrick Michael said:

    The wife could then get out of the new time share by providing a doctor's note.  Sounded good to them until they received a 1099 S for $75,000.  They did not receive any cash in the deal.

     

    3 hours ago, Patrick Michael said:

    They have no idea how the company came up with the $75,000 value on the 1099 S.

    How can there be a recorded sale if they did not receive any consideration?

    They received nothing for their shares?

    Am I missing something here?

  9. 21 hours ago, Christian said:

    large number of toys received over time on Ebay to the tune of over $11,000 worth

    The toys most likely did not increase in value "over time".

    Therefore basis of gifts would be equal or greater than sell price.

    Taxpayer is entitled to making a reasonable estimate.  Unless the toys were collector items, I would accept a reasonable estimate of basis = sell price and call it good.

    • Like 1
  10. Per IRS (also supported by case law):

    Topic no. 414, Rental income and expenses

    Security deposits – Don't include a security deposit in your income if you may be required to return it to the tenant at the end of the lease. If you keep part or all of the security deposit because the tenant breaks the lease by vacating the property early, include the amount you keep in your income in that year. If you keep part or all of the security deposit because the tenant damaged the property and you must make repairs, include the amount you keep in that year if your practice is to deduct the cost of repairs as expenses. To the extent the security deposit reimburses those expenses, don't include the amount in income if your practice isn't to deduct the cost of repairs as expenses. If a security deposit amount is to be used as the tenant's final month's rent, it is advance rent that you include as income when you receive it, rather than when you apply it to the last month's rent.

    • Like 2
  11. 39 minutes ago, michaelmars said:

    he did receive it and then gifted it back.

     

    11 hours ago, DANRVAN said:

    never actually got any money from the buyer other than the amount he purchased it for.

    Amount realized = amount received.

    Per 1.1001.1 (e)

    "Where a transfer of property is in part a sale and in part a gift, the transferor has a gain to the extent that the amount realized by him exceeds his adjusted basis in the property."

    OP implied that amount received = basis.

    Substance over form.

     

  12. 21 hours ago, TAXMAN said:

    The estate went past its year and has not made any distributions thus a 40 k tax liability (200k income)

    I am curious is to how the estate made $200,000 in the first year given that any sale of assets should have been mostly offset by step up basis.

    • Like 3
  13. 14 hours ago, TAXMAN said:

    However the estate has paid out 10k in repairs and utilities to date. In the return for the estate(1041) I cannot see how we can take this as a deduction. The estate went past its year and has not made any distributions thus a 40 k tax liability (200k income) unless we can use this as a deduction?

    I don't see how $10,000 is going to go very far in reducing $200,000 of income.

    Although if $10,000 was paid after the transfer to heirs, then it might be considered a distribution in lieu of cash since it was to their personal benefit.

    • Like 2
  14. 10 hours ago, Tracy Lee said:

    . he has a gain of $44,886.00 even though he never actually got any money from the buyer other than the amount he purchased it for.  He wants to be able to add the $45,120.

    If your are saying the amount realized = basis; then gain = zero.

    He can't be taxed on consideration he never received.

  15. 36 minutes ago, Lee B said:

    The best source I found was in The Tax Advisor

    I don't see where the OP's issue is discussed in that article.  It really does not address the claim that any of the loan fees are nondeductible.

    As I read it, the focus of the article is is on which fees are not considered interest expense subject to the Sec. 163(j) limitation.

    If in fact the fees in the OP are not deductible, they would become part of the acquisition cost of the property (basis).

    Without any authoritative cite, I  would amortize over the life of the loan.

  16. On 2/29/2024 at 10:36 AM, Catherine said:

    couple thousand dollars' payment from a state for an unclaimed property payment. Per the state document, most of it is "stock proceeds"

    Does the estate have any other income to report?

    A couple thousand dollars of stock  proceeds could easily be offset by attorney and PR fees; above any unknown basis.

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