Jump to content
ATX Community


  • Content Count

  • Joined

  • Last visited

  • Days Won


Everything posted by DANRVAN


    No BS

    It is treated as investment property and covered by a sect 266 election. Since the returns for those years have never been filed, you might be in luck. Reg 1-266-1(c) states that the election has to be made with an original tax return, there is no reference that the return must be timely filed. Pub 535 also state the election must be made with an original return or if an original return has been filed, the election can be made with an amended return filed within 6 months of the due date without regards to extensions. So it appears that since your client's partnership has never f
  2. Charge by the hour, but if you are working in an area that you are have limited experience, or maybe a little rusty in, then you need to make an adjustment for the amount of extra time it took.
  3. The clock stops during the suspended period and starts again when it ends. The fact that he retired does not erase the suspended period. So if your client retired on June 30 2019 and sold the house on June 30 2020, he would look back four years from the date of his deployment in 2014 for a base period for the 2/5 year rule (assuming he meets the 50 mile rule of 121(d)(9)(C)(i)).
  4. There are a couple ways to report the liquidation. but the answer is the same. Assume the basis was $94,000 on 12/31/16. Add to that the reported 2017 gain of $211.971= $305,951 basis before liquidation. Assume the $258,000 reported in box 16d is the liquidating distribution. Loss = 258,000 - 305,951 = (47,971). As understand it, your client owns 1\5 of the shares which were inherited. However the closing statement you mentioned seems to report only your client's share. I am curious as to who the closing statement shows as the seller?
  5. So you will have two transactions to report: the shareholder's allocated gain from the k-1 and the capital loss that should result from the liquidation. The gain comes from an internal transaction dependent upon the adjusted basis of the building in the hands of the S-corp.
  6. Max, it looks to me like you could be dealing with a sale of the warehouse by the S-Corp; instead of a sale of the S-Corp stock. If it was a sale of the stock, then I don't see why the final K-1 would show the sale of real estate. If it was a sale of real estate by the S-corp, then you need to compute gain or loss on the liquidation of the S-corp.
  7. Earned income includes SE income reduced by the deduction for 1/2 of SE tax. The gain or loss from sale of business assets does not factor in.
  8. For a married coupe, their exclusion is $312,400 since they lived in the home for 15 months (5000,000*15/24).
  9. I have used ATX for 20 years for all types of forms: 1040, 1065, 1120, 706....without any issues. QBI and 3115 are no problem. I have no problem with input time. I use my left hand to navigate with the mouse and keep my right hand on the number key.
  10. Not if you also show as a disposition in the same year.
  11. I started my own part time practice in 1997 using Intuit Pro Series; I hated it. Then out of the blue in fall of 2000 an ATX demo show up in the mail! I have been using it ever since. I can't remember the last time I had to call support.
  12. I do not see any reason why the S corp partners would be treated differently than any other partner in regards to basis. The rules for tiered partnerships do not apply here since the lower tier partners are Sub S.
  13. As cbslee stated, the assumption of the loan should be treated as a sale of the business. What type of business assets were taken over by daughter and who is responsible for the loan if daughter also bails out?
  14. My sympathy is with you Darlene, your Faith will see you through, Dan
  15. Terry, you need to review section 121(b)(5) which reduces the exclusion by a ratio determined by the amount of time the residence was held for nonqualified use after January 1, 2009 Note the exception under 121(b)5(C)(ii)(I) for the 5 year period beginning after the last day the property was used a personal residence. This means that the exclusion is fully allowed in the situation you described. In that situation the exclusion would be reduced by the ratio of nonqualified use. For example, tax payer owns house for ten years (purchased after January 1 2009); rents out the
  16. I looked at a 1041 with depreciation. It flowed to LIne 9 of the K-1 with code A for depreciation. 179 is allowed for grantor trust since the grantor and the trust are treated as the same entity for income tax purposes. If the attorney has confirmed that the trust is treated as a grantor trust for tax purposes, then section 179 should be allowed.
  17. For a grantor irrevocable trust, I believe it depends on the language of the trust. As far as depreciation goes, it is a separately stated item on the K-1 and off the top of head don't recall how it flows with ATX. For some grantor trust there are options for filing a less than complete 1041, not on top of my head either.
  18. Karla, sounds like you need to explain to them that in this situation with 50/50 partners, GP does not change the amount of taxable income at the partner's level. While the GP is reported as income to the partner, an equal amount is recognized as an expense by the partnership and passed through to the partner. For example, if partnership income / loss is zero, $100,000 GP will reduce it to $(100,000). Then each partner will report $50,000 GP and a loss of $50,000, which nets out to zero on their K-1's. They can also call it a draw with zero effect on taxable income to partner.
  19. $150,000. The transfer from Zel is a part purchase and part gift of Zel's basis of $75,000 ($15,000 + $60,000).
  20. Tom , the OP said paid to take care of mother and did not mention paying for her living expenses. There is not enough info given to discuss support, caregiver's husband could be earning $xxx,xxx. If the payments are strictly for her efforts in taking care mom, then it is not excluded under the code. As mentioned, a written agreement would be helpful.
  21. https://www.irs.gov/businesses/small-businesses-self-employed/family-caregivers-and-self-employment-tax The IRS takes the position that there is not a trade or business if the taxpayer only cares for a single family member, therefore report as other income. In Q-3 there is SE tax since taxpayer "operates a sole proprietorship adult day-care business for multiple clients, including her grandmother".
  22. I can see a case for SE but also a case for other income. She did not quit her job to take up a new profession like the doctor that became a lawyer. She is not really working for the siblings. They recognize her need for financial support but that does not make it employment or a business. It is more like unemployment income since they are compensating her for wages she would have otherwise earned. In regards to the suggestion of Max of gifting, I suppose there could also be a case for that depending on the facts. For instance if after she quit her job and took care of m
  23. I don't see how you can call it a gift regardless of how favorable it would be to the client. A gift is given without the expectation of anything given back in return. In this case siblings are paying client with expectation that she will take care of mother in return. It sounds like she has informally or formally entered into a caregiver agreement with siblings. "You take care of mom and we will pay your $$$$ per month". I would not report it on Schedule C since she is not in the trade or business of being a caregiver. If she does not have a written agreement, it might b
  24. That should have read 2002-39.
  • Create New...