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DANRVAN

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Everything posted by DANRVAN

  1. You really have to give the son credit for carrying out the "will" of his mother, even though it was not in her "will". Otherwise he could have personally received a benefit as an heir to her estate. I would go with that and claim the charitable deduction up to the amount of total income received by the estate. Also consider electing accrual accounting and short first year to match deductions against income.
  2. above post was duplicated and deleted
  3. This is their problem not yours! If they are treating him as an employee then you should as well. I would not want the liability of making that determination for a number of reasons. They need to issue a W-2 and any state report. Since he is dual status there would not be any fica or m.c. to withhold. But that really has no bearing on how the church report his wages. Since he is dual status he reports on Schedule SE unless he has filed Form 4361. The church does not withhold for fica regardless of the 4361.
  4. If they are not operating as an LLC they are a QJV under section 761(f)(2) If they are an LLC and if held as community property they can rely on rev. proc. 2002.69 and elect out of filing a 1065. It is basically a two prong test depending on whether they are an LLC or not: -if not an LLC go to sec. 761(f) -if an LLC go to 2002-69.
  5. Sounds like she did not have a named beneficiary so it went to her estate. And without a charitable contribution under section 642(c) the estate will likely have taxable income. A legal question. I could not sign the 1041 and take the charitable deduction without a legal document. And not deductible by the estate as either an income distribution or a charitable deduction. Unfortunately sounds like son was acting without any sound legal advice. Most likely it could have been resolved before son made the donation from the estate funds.
  6. I don't see how. Sec. 642(c) clearly states that the donation must be made pursuant to the terms of the governing instrument. Legal issue. Was there an attorney involved? If son was heir he could have made the donation personally after receiving funds from the estate.
  7. Not interested, this forum works just fine.
  8. I forgot to mention an exception that you are probably aware of; that would be if under a master plan approved by the government entity pre TCJA.
  9. Sounds like a tax planning question, better than coming to you after the fact.
  10. The intent of TCJA was to eliminate the federal tax subsidy of state and local development incentives. Yes you are correct. It is gross income per section 61.
  11. per 1065 instructions: Who Must File Domestic Partnerships Except as provided below, every domestic partnership must file Form 1065, unless it neither receives income nor incurs any expenditures treated as deductions or credits for federal income tax purposes.
  12. Is this a property tax rebate?
  13. And after giving it more thought I am changing my initial answer. Part of the note was used to purchase the Consulting fees so they need to be booked as a prepaid expense. Then I would recognize them over the life of the agreement rather than an allocation of the principal.
  14. Yes it needs to be booked. I suppose that could be an option, but if the life of the loan is also 4 years with equal payments it should work out about the same. The issue I see in this whole deal is if the seller is actually providing a service? Otherwise, it could be reclassified as Goodwill by the IRS and subject to 15 year amortization instead of a short write off. I wonder what kind of tax advice the seller received on this which resulted in $345,000 in SE income. But with a $2 million plus gain it might not mean much. Maybe he will max out from other sources.
  15. The consulting fee is a service deductible by the buyer when paid and taxable to the seller when received. Per the agreement, it appears 15% of each payment will be allocated to the consulting fee. This is a buyer friendly part of the agreement. Unlike the Goodwill which is amortized over 15 years. 1099 amount for the year is $23,550 by my math. allocated: 80%, 3% ,2%, and 15%
  16. I believe there is some confusion in that statement. I am not aware of any reference to "ordinary income" in section 453. In regards to depreciation recapture, 453(i)(1)(B) basically states that any gain in excess of recapture income shall be treated as installment sale income. Also, there is not any reference given in the exceptions listed in 453(b)(2).
  17. Thank you for the heads up, I haven't got there yet. Been working on business returns this week.
  18. And ODR will treat as paid on 12/28 as well.
  19. Clearly income in year received. Hard to imagine agent missed that on multiple audits. But that does not make any difference, doctrine of constructive receipt rules since he had control of the funds on 12/31, regardless of 1099s.
  20. If you filed it correctly then there is nothing to do but move on.
  21. SS-4 needs to use the state filing name. That should work. The bank probably just wants to see the correct name for their records. Hopefully you were not giving out legal advice.
  22. My guess is that the P & L total revenue reports the gross amount from the fund raiser; and the cost is included with total expenses. The line 18 amount on 990-EZ should match the P & L bottom line net amount.
  23. The relationship between the your client ( a partnership) and this other business is the key in determining whether there was a capital loss or ordinary loss. If it was another partnership and your client can pass the test to prove it was either worthless or their share was abandoned, then you will have a case that it was an ordinary loss vs a capital loss. It appears you are trying say the partners of your clients partnership need to claim their interest is worthless or abandoned to claim a loss. But that is not the case. Once the partnership has recognized the loss of the invested $150,000, the 50% partner will have a capital account of -$1,000. (But somebody must have contributed more capital to cover the admin expenses.) So at this point there is no further loss to claim from worthlessness or abandonment of your clients partnership; since the full loss of each partners contribution has been recognized on their K-1s. In other words, If the partnership is dissolved nothing is owed to the partners so nothing is lost!
  24. It sounds like three partners each contributed $50,000 for total of $150,000. Partnership invested $150,000 in XYZ Company. Did they invest capital in another partnership or stock in a corp? Either way it appears an investment account should have been recorded as a debit on their books as "Investment in XYZ Company". Now the investment is worthless so the entry is debit to "loss on investment" and credit to investment account to zero it out. The result should be a $50,000 capital loss allocated to each partner. I don't follow, where does $75,000 come from if initial contribution was $150,000 total by three partners? Form 4797 is for gain on loss on disposition of business assets. What you are describing sounds like a capital asset, resulting in a capital loss reported on the K-1s. Are there two partners 50/50 instead of three? Sounds like those losses came from admin. of the original partnership? Someone kicked in extra cash to pay for them and additional capital?
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