DANRVAN

5 minutes ago, Lion EA said:

Form 2553,

That is correct. form 8832 was from Bulldog's post.

9 minutes ago, Lion EA said:

you have the dissolution of a corporation

A state issue, minor detail.

3 hours ago, mcbreck said:

if the IRS requests information, THEN we'll fix it. It's not like they are shorting the IRS.

Fix it now with a form 8832 and a 1120-S.  Very little extra effort or cost to client than filing an inaccurate 1065.

On 9/30/2023 at 12:43 PM, BulldogTom said:

DANRVANIs first time abatement possible for Corps? 

I believe so for S-Corp, as I recall from something I have either read or learned from CPE.  There is also abatement for reasonable cause due to "ignorance of the law" which might be a possibility in this case.   

On 9/27/2023 at 6:31 PM, ILLMAS said:

Fast forward to the end of the year, attendees will be receiving their donation letter with the following:

I believe the nondeductible amounts should be disclosed before hand.

On 9/27/2023 at 6:31 PM, ILLMAS said:

board member suggested that $100

The amounts should be based on fmv using any reasonable method per reg 1.6115-1.

It is the entity's responsibility for making the estimates, but I would ask about the reasonableness.  For example, what would the speaker normally charge per person and did the attendee's really receive a benefit?  Same with music and dancing.

I see issues with compliance and professional standards regardless of the dollar amounts involved and whether the net result is  basically the same.

RR  69-184 clearly states that a partner cannot be treated as an employee.

Sec. 6664 prohibits taking a position on tax returns unless there is substantial authority for the tax treatment of an item.

AICPA SSTS#1 requires members to adhere to the above statements.

On 9/28/2023 at 12:47 PM, BulldogTom said:

Can they file a late 8832 to claim the Corp status and then make a late S election?

Looks to me like they can and that is probably how I would handle this situation.   Most likely the simplest way to straighten it out.

On 9/29/2023 at 6:44 AM, BulldogTom said:

a late filing penalty, and I don't think you can get them out of that (and frankly, I wouldn't try, they need to pay the price for their actions)

I thing an abatement is possible and they should be informed of that.

47 minutes ago, jklcpa said:

Is this more of a substance over form though? 

Probably not even a raffle by definition since participants are only making pledges and not $$ for tickets, and the pledges might be for time or talent instead of dollars.

Out of curiosity per Oregon DOJ division of charity:

Who may conduct bingo, raffle and Monte Carlo events in Oregon?

Only organizations exempt from paying federal income taxes may conduct charitable gaming events in Oregon. This includes public agencies and public schools. Private organizations qualify if they are active nonprofits. An organization must have held tax-exempt status for at least one year and been engaged in its charitable, fraternal or religious purpose during that time.

=======

Do all bingo, raffle, and Monte Carlo gaming operations require licenses?

Generally, all nonprofit organizations wishing to operate bingo, raffle and Monte Carlo events are required to have licenses issued by the Oregon DOJ. Following are the only three exceptions:

Nonprofit organizations operating bingo games with a handle of no more than $2,000 per session and with a total handle of no more than $5,000 per calendar year.

Nonprofit organizations holding raffles with a cumulative handle of no more than $10,000 per calendar year.

Nonprofit organizations holding Monte Carlo events with a handle of no more than $2,000 per Monte Carlo event and a total handle of no more than $5,000 per calendar year.

===

On 9/19/2023 at 2:35 PM, Margaret CPA in OH said:

Would the church have to be involved at all or just the donor? I'm thinking it is for the benefit of the church but really just between the donor and recipient.

For Oregon, it does not look like a good idea for an individual to conduct a raffle.

I don't see where any legal advice was given.  Just potential tax and reporting issues.

3 hours ago, kathyc2 said:

shared revenue/expense rent for the depreciation?

I think you are referring to a crop share lease which is not a partnership.

2 hours ago, kathyc2 said:

I'm thinking the irrigation value could be deprecated over 15 years?

It is a combination of 7 year and 15 year.

The above ground pivot is movable while the well and underground pipe are permanently attached to the land.

2 hours ago, kathyc2 said:

Would the valuation when they get it need to show the breakdown between just the land and the irrigation system?

 A separate appraisal might be needed for the pivot by an equipment appraiser.  A RE appraisal might not include the details.

2 hours ago, kathyc2 said:

Would it make a difference if the rent is cash rent or shared revenue/expense rent for the depreciation?

I don't see where it would matter.

8 hours ago, cbslee said:

I shopped at one of these stores for my groceries and won $5 several times  So was this a gift or?

Sounds to me like an award based on the actions of the shopper, not a gift.

On 9/19/2023 at 2:35 PM, Margaret CPA in OH said:

Does the winner have to report as income?  Value would vary, I think, based on location of stay.  Would the church have to be involved at all or just the donor? I'm thinking it is for the benefit of the church but really just between the donor and recipient.

Technically it is income to the winner of the drawing per sec 74(a) at fmv.   Determining fmv is a gray area, case law points to the value to the recipient.

She might need to file a 1099 but I would not hold her to it as income tax preparer.

On 8/25/2023 at 5:51 PM, Corduroy Frog said:

apply the 743 for this partnership until 2014.

What do you mean by "apply the 743 for this partnership until 2014"?  Did you file a timely 754 election?

On 8/24/2023 at 12:45 AM, Corduroy Frog said:

When the last of original partners died, the partnership revalued everything at stepped-up values.

But that would not effect the shares of partner that died in 2012; and they would not have received any benefit from an increase in depreciation.

On 8/24/2023 at 12:45 AM, Corduroy Frog said:

Question: Do the 11 partners get a positive uptick to their basis as a result of the revaluation?

The partnership is not "revalued"; only the inside basis of the inherited shares.

I will be straight forward.  Sounds to me like you have been practicing in an area you are not qualified in.  That would be an ethical conduct violation if you were a CPA.

On 8/25/2023 at 5:51 PM, Corduroy Frog said:

all property in the partnership was sold, and final distribution of $$ occurred in 2022.

For partner who was entitled to 743(b) but did not receive it, the disparity between inside and outside basis usually equalizes when assets are sold and the partnership is dissolved in the same year.

10 hours ago, Corduroy Frog said:

When the last of original partners died, the partnership revalued everything at stepped-up values.

10 hours ago, Corduroy Frog said:

Do the 11 partners get a positive uptick to their basis as a result of the revaluation?

No, only the heirs of the final deceased partner.  Nothing changed for the rest.

On 8/21/2023 at 1:01 PM, Margaret CPA in OH said:

Hmm, Form 1023 is the application for tax-exempt status. 

and it can now only be filed directly from IRS website.

19 hours ago, jklcpa said:

I read the original post as the home that taxpayer owned and later rented was owned solely by the taxpayer.

On 8/21/2023 at 3:34 PM, Tracy Lee said:

, then married and moved in with (now deceased) husband into his home and let her kids live in it from 2015 to 2020. She then turned it into a rental from 2020 until in sold in 2022 at a substantial gain.

The wording is not clear, but after reading it again it appears you are correct Judy.

5 hours ago, Corduroy Frog said:

Do the 11 partners get a positive uptick to their basis as a result of the revaluation?

5 hours ago, Corduroy Frog said:

I didn't know the difference between inside and outside basis. 

Why would partners who were not a part of the estate of deceased partner get a a step up in basis?

Seems to me you do not understand the difference between inside and outside basis and why section 743(b) is used to equalize.

5 hours ago, Corduroy Frog said:

If one of the remaining 11 partners sell, and cannot increase his(her) basis, there will be a capital gain out of proportion to reality.

What makes it out of proportion to reality?

On 8/22/2023 at 3:22 AM, G2R said:

Also, there's a truck on the books that the company doesn't own, yet was depreciated the last two years. Do I get it off the books as if it was converted to personal use in 2022? 

Depends.  Did company pay with cash or making payments?  If it has only been two years I would consider amending to properly account for during that time period.

On 8/22/2023 at 3:22 AM, G2R said:

Client knows nothing about any loans outstanding, so no loan documents.

4 hours ago, G2R said:

It will be paid off by end of this year.

Those two statements do not line up.  

On 8/21/2023 at 3:34 PM, Tracy Lee said:

then married and moved in with (now deceased) husband into his home

Sounds like there was a possibility this was separate instead of marital property for husband's estate, with full step up in basis.

13 hours ago, ILLMAS said:

invest the money in the money pit

Maybe they need to take a look at the big picture here.  

Are they better of pouring money into the pit, or generating cash by selling the property and paying taxes?

From what I understand you to say, they would sell the other property, take cash and invest in existing property.  Not a tax free exchange.

On 8/11/2023 at 9:39 AM, cbslee said:

I would just adjust the basis worksheet. In Drake there lines for other increase and other decreases.

I agree. Go forward with correct numbers for 2022.

So they have not yet filed for 2022?  That might change my answer from above.  But have the partners been taking draws or GPs instead of salaries?

On 7/14/2023 at 7:45 AM, ILLMAS said:

partnership client that would like to do a retro election to January 1, 2022.  

If they have been filing as a partnership, then I believe the answer is no.  

On the other hand, if they had been filing 1120-S and had "reasonable cause" for failure to file a timely election then they should be good. 

Your research should turn up a rev. proc. with details.