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mli

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About mli

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    WA
  1. Okay, figured it out! First Step - you have to adjust the Other additions And other reductions worksheet to eliminated the timing differences. That makes Column A correct (i.e. cash basis AAA). Then you can make entries in the adjustment column to get accrual RE to balance. It was that first step that I was missing. Thanks Abby!
  2. For an S corp who has accrual books and cash basis tax return, how do you prepare schedule M-2? Schedule L is book "accrual". Accrual to cash differences are on M-1. But ATX software prepares M-2 to match schedule L retained earnings. My understanding is that M-2 would not agree to schedule L retained earning (accrual) in this instance. Instead it is based on Tax (cash basis). It appears that the only way to do this is to enter a lot of overrides. Essentially, overriding every number on Sch M2. Is there another way? Am I doing this right?
  3. No things are not separated due to related property rules. Things are separated simply to handle depreciation and deprecation recapture. I think you have hit on my original point. Consider 2 scenarios entered into ATX software: In both scenarios the facts are the same: a Related party sale total net gain =$10,000. (Made up of: • Gain on building = $20,000 • loss on land =$10,000) ==> Scenario 1 Sale of vacation home - Gain recognized on the related party sale is $10,000. ==> Scenario 2 Sale of rental home - Gain recognized on related party sale is $20,000. I understand the no netting rule. This result seems inconsistent. That was why I asked the question.
  4. That is what I figured. Seems harsh... another related party trap I guess!
  5. Related Party sale – losses aren’t deductible. No problem there. But what happens in a related property sale of rental real estate at an overall gain, if there is (1) a loss on the land, but (2) a gain on the building? Is the loss on the land still disallowed? For example: • Related party sale total net gain =$10,000. Reported on 4797 it is made up of: • Gain on building = $20,000 • loss on land =$10,000 Does the taxpayer have to recognize a $20,000 gain on the transaction and loss on land is disallowed. Or does the taxpayer recognize a $10,000 gain. If this was not depreciable property (vacation home) there would only be “one total value” and there would be no disallowed loss . It seems to me the property is only split to calculate depreciation, but does that create a situation where the loss is disallowed?
  6. mli

    3115

    I could be completely wrong, but I didn't think you could use form 8453 transmittal for an 1120S. If you look at it, you will see that it is only set up for individual taxpayers. On a related note, can anyone tell me: Would the PDF copy of Form 3115 attached to an e-filed return need to be signed?. OR will the 8879 (or 8879S) be sufficient for the signature, as if the form had been e-field and not attached as a PDF?
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