BHoffman

Chattiness is probably due to the caffeine in those chocolates....Yummy!

Hope you get some rest and feel better!

Spoke with client. He expects 2016 to be a big income year so I suggested he apply an amount TBD to his 2016 estimated taxes. He likes that idea. This year I have been slow to get there...... Bad things about home office:. Pretty lonely sometimes, no really fancy copy machines, no admin assistants. Good things about home office:. The afternoon nap .

SCorp business client called me in Sept. asking for an estimated tax payment coupon. Said he made lots of money. I looked at his records, and he was right! Asked him about his plans for asset purchases. Said he was sort of looking at some equipment, but he wouldn't be buying until 2016. Estimated tax paid based on prior year and current year to date income: $100,000 He placed a $600k piece of equipment into service on 12/23/15. Sec 179 is going to wipe out all of the SCorp pass thru income, leaving just a tad. This client is going to be owed a refund of around $100k! Will IRS just cough that up, or will we be receiving notices, etc?

The client has had this tiny partnership percentage for years with the company who employs her. The prior year K1 forms have never shown any SE amount. All of her benefits are included in her employee status. Nothing is different from prior years except that the income is now shown to be subject to SE tax.

That is a great idea and I'll do it

Found out he signs as "personal representative".

YAY! So the form is only one page and a few "check the box" entries, right?????!!!!

Me too. I sent her an email asking about it that she will forward to the K-1 issuer. I can't think that this is anywhere close to the Renkemeyer case. That was a very blatant abuse. My client didn't even want to invest in this partnership arrangement but was told by her bosses that she had to. If the issuer refuses to correct the K-1, then it's either report it and pay the tax or form 8275 Disclosure statement. I'm going to have fun finding the IRC support for that.

That court case seems to have people believing that if a limited partner is also an employee, then that fact alone means she is actively engaging. I just don't think that always applies at all. The case was a law firm and the partners were certainly actively engaging in the business operations, and they had control. My client is limited to her job in Sales. She isn't able to make any management decisions.

Terry - this is an investment MMLLC. The client is employed by the company, but invested a long time ago. This is the first K-1 with the earnings listed as SE earnings. No guaranteed payments. She gets a W-2. The SE income is about $26,000, and her W-2 wages are about $100k. The difference is tax is around $2k higher if SE tax is imposed.

My client is employed by an LLC. She also receives a Partnership K-1 for her 1.51% share of profits, losses, and capital from the same company. This is a real estate title company and she is a salesperson. It is privately owned and not a PTP.For the first time, the K-1 is listing an amount in box 14, Code A indicating the amount is subject to SE tax. In Section G, the box "Limited partner or other LLC member" is checked.I'm looking at Renkemeyer, Campbell, and Weaver LLP (136 TC 137, 2011) and wondering if all people who are employed by a company and also receive a K-1 will have the income subject to SE tax? Is the K-1 incorrect, or is there any other way to look at this or argument against it being subject to SE tax?

Thanks Judy! I'm going to file the gift tax return. Wondering if he can sign it like this: "Joe Smith, POA for Jane Doe".

Don't think any quit claim was filed due to the sale records. Her name appeared on the documents as a co-owner, but not on the 1099-S.

This is a sequel to that gift basis question earlier in our saga. Boyfriend and Girlfriend jointly owned a rental house. Pretty sure it was a JTWROS. Girlfriend died February, 2016. She had no taxable income in 2015 Rental house was sold in December, 2015 (before her death). The 1099-S was in his name only. The transaction resulted in a loss. I asked for a copy of the quit claim or any other document to show that she intended to gift the house to him before her death. She had discussed this with me earlier in 2015, but I don't have any documents from her. He brought me a Real Estate Power of Attorney and says that's all he has. Not real sure how to proceed

I'm going to learn to love extensions. I do a lot of financial statement, some bookkeeping, some consulting stuff that keeps me busy all year, but it would be nice not to feel that self imposed pressure for the April deadline. This year, for sure.

I don't change my prices but if I file an extension and don't get their paperwork until October and they know they owe, they only get one chance before I politely fire them.

Awwww I remember how fun it was to color eggs! Does it still smell like vinegar?

How much?

...and it's not good that she paid in 2016. That said, the IRS does not expect the reporting to match the 1098T. Schools can choose whether to report amounts billed or amounts received. Even when they report amounts received, I've never seen form 1098T match the financial transcript. I've always used the transcript amount. There must be some way to find out how much of the &18k was earnings.

1098T forms can show either amounts received or amounts billed. The financial transcript shows the amount paid by the student, and that is the amount I always use. I don't think IRS matches these forms since the school has the option of reporting billed or received. If the $9k is in box 2, then that is the amount billed. I think the student can use the amount paid.

What's in box 2 of the 1099Q?

Here is a much better article, and it talks about redemptions: http://www.forbes.com/sites/anthonynitti/2015/06/16/tax-geek-tuesday-comparing-a-sale-and-redemption-of-a-partnership-interest/#73e114072cfc

Here is a link to an article I like regarding hot assets and Section 751 and cash basis partnerships: http://www.forbes.com/sites/anthonynitti/2014/05/27/tax-geek-tuesday-hot-assets-and-the-sale-of-partnership-interests/#61444c827f98

Is this a partnership, or did the company make some other election? Who bought her interest for $50? She will figure the gain (loss) on her 1040. If it is a 1065 partnership and there are "hot" assets, then there is some more work to do.