Corduroy Frog

The standard mileage rate includes a portion attributable to depreciation. Does the link include that information? Never mind, I did find it in the depths of the verbiage. 28 cents in 2023 and 30 cents in 2024.

I am confused. Looking back at the seminar materials, apparently what I had reference to was a 481(a) Adjustment, where the recapture of "allowable" depreciation can be minimized by the use of Form 3115 to change methods retroactively. The 481(a) adjustment could also be used to increase recapture and add to taxable income, if circumstances benefit the taxpayer having more income.

This may sound bizarre, but I think at a recent seminar, a new form was introduced, whereby all of the prior depreciable amounts are added to income, but the accumulated amounts plus current year is allowed as a deduction. There were pre-qualifiers. Sorry, I'm having trouble remembering the special form.

So true. I remember meeting Phil in 1982 on his way out the door to go deer hunting in N Carolina. He was working on software at the time, and for most of the rest of us, electronic filing was a far-fetched dream.

Dennis, customers are people you have to meet where they are, not where you would prefer them to be. I have to stick to this axiom with most of my tax clientele. Some of them, if they have ascended to elite status, really wouldn't need me. Those who have difficulty of grasp are those who need me the most.

Yes, after years and years of promptly answering the phone, Drake now has a telephone menu. Under the guise of "properly directing your call", we now hear a few minutes of propaganda, punch this, punch that, etc. And I'm sure we will be directed to "we are trying to save money so we can pass the savings on to our customers." And I'm not against a company making profit - it's just that Phil never needed this to make a profit. Years ago I had TaxSlayer, who answered the phone even more promptly than Drake. I couldn't stay with them because the state packages were sorely lacking (outside of Georgia and S Carolina). Any comments?

Thank you DANRVAN. I have indeed printed out 15 pages of 172(a) and will read it. The various cross-references to other codes and cites are why persons such as myself use this forum to receive quicker and clearer answers on a number of situation. Thanks again.

Thank you so much. In other words, the NOL can only be used to offset "operating" income. So in my example, if the taxable income is due to Capital Gains, there would be no offset. Some of the income will be depreciation recapture on farm equipment (4797) which is "ordinary" income, but perhaps not "operating" income. Thank you.

A Farmer has had consistent losses for several years, and has been borrowing big time money to cover the losses. He knows he will sell the property in 2023 at a whopping gain, and so do the lenders. He sells on installment sale to reduce taxes. Let me be sure I have this correct. Hypothetical Facts: 2023 taxable income $120,000. NOL from 2017 is $40,000 NOL from 2018-2022 is $90,000. NOL from 2017 is applied first, reducing taxable income to $80,000. Only 80% of $80,000 is available for the application of post 2017 losses, or $64,000. Taxable income is $16,000 after applying $64,000 of available NOL. NOL carryforward to 2024 is $26,000. Thank you in advance for taking time to respond.

I did the same thing this morning, took me nearly 2 hours to print, punch, and prepare a hard copy notebook. I will also be attending Auburn's seminar in Pelham, AL in December. I see people with notebook computers that don't have to print, but the batteries don't last and there are not enough power outlets. The Auburn school is the ages-old "Farm Seminar" developed by U of Illinois decades ago. The material is still well-written, plenty of demonstrative examples which speak to us in plain straightforward language, not some stilted ethereal cumbersome phraseology.

The last time a new requirement for executives to expose themselves came with Sarbanes/Oxley and many smaller, registered firms decided to bail out of the SEC and public trading.

Dennis, out of respect, I've removed my post from view. When I get time, I'll send you a private message. Thanks for your response.

Does Medlin have a Job Order subroutine? If not, can this be achieved by Master vs. Subsidiary Accounts?

How about asking the client? (assuming they really know). There is a bigger issue involved here...how well can we depend on what the client tells us? I believe we should rely on their information, with a few exceptions, such as things that are obviously "wrong with this picture." Examples: Self-employed taxpayer with $15,000 in self-employment income, living in a $3,000,000 home. Taxpayers who can't tell Lion's difference between joint tenancy or tenancy by the entirety without consulting their attorney. US Citizens over 70 years of age who don't have 1099-SSA information returns... And the 8867 where the preparer asks questions that the IRS insists is not auditing, even if we are supposed to keep documentation? (TurboTax self-prepared returns will not have an 8867) A bigger issue indeed, maybe outside the scope of this thread stepped-up basis.

...and if I don't, someone else should and will, especially with end-of-year upon us. Time to remember the sponsor, Eric, if someone will publish his mailing address. I plan to send him a paltry amount by comparison to benefit of asking the questions that I do, and receiving responses.

Thank you to Lee B and DANRVAN for clarification.

Millard and Maude - married elderly couple. Millard owns a commercial warehouse by himself, but Maude owns no part of it. Millard's original cost is $400,000 years ago, with $350,000 in accumulated depreciation. Millard passes away in 2022, leaving the warehouse to Maude. Maude has warehouse appraised, FMV is now $1,000,000. What is Maude's new depreciable basis? (for this purpose, ignore the effect of non-depreciable land): a. $1,000,000 the new FMV of the warehouse. b. $ 650,000 because Millard already took $350,000. c. $ 350,000 calculated at Millard's (400,000 + 1,000,000) divided by 2, less Millards $350,000 already taken. d. ????? Have researched The Tax Book, and find numerous references to stepped up value, but nothing regarding new depreciation. To all who might be interested, thank you in advance -

Thanks to all who have posted. The group has given me more options than I realized were available. Actually, I believe the year was 2011 when stockbrokers and custodians were forced to disclose basis on their 1099-B information returns. I would trust any basis for mutual funds held less than 12 years, but a majority have held much longer. But time is on our side - one day almost all funds will be held 2011 and later.

Real world question - I'm sure most of us have run into this at some time or another. Dividends from Mutual Funds are usually re-invested - meaning the dividends are taxed when declared, but are immediately used to buy more stock shares in the mutual fund. Since dividends of $50.00 (for example) are taxable, then the taxpayer basis in the mutual funds increases by $50 because he (she) did not receive them. The effect of this on the market value may increase $50 as well, or it may increase only $10, or may increase $75. The cumulative effect on the market value may be a little more than basis, or a little less than basis. Situation: John H sells his entire holdings in "Wonderful Value Mutual Fund" for $15,000 in 2022. Not only that, but he comes to you as a new customer to file his return. He doesn't have a clue what his basis may be and has no history to research. What do you do?? Refuse to file because he cannot substantiate his basis. Assume his basis is equal to the sales value, and report zero capital gains. Delay filing until you can research the dividend history and original investment plus any subsequent investments. Contact the mutual fund company for his records, and hope that they have them. Any other possibilities? Interested to know what others will do because I am confronted by this from time to time.

..has probably already been brought to the forum by cbslee, but I understand it will be 3.2%. Wonder what the COLA increase has been for the measurement period. Recipients fight the double-digit increase in medical and drug costs, but they never get this kind of increase in their benefits. With 3.2%, I have to doubt they are even getting a COLA increase. There are other factors in the economy that tend to balance out the small increases. Most of them do not have small children, if they have children at all, they are grown. Also it could be said that most of them own their homes, and are spared the increase in real estate housing costs.

Good reading Judy. Many aspects of s. 179 are discussed in detail. In the simplest terms, the language "treated as one taxpayer" for a controlled group answers my question. Thank you.

For purposes of discussion, please assume all companies are C Corps. Alphabet, Inc. is a 100% owner of 4 subsidiaries, W corp, X corp, Y corp, and Z corp. W corp has a taxable loss, and reports s.179 depreciation. X, Y, Z corp all operate profitably, to collectively exceed the loss reportable by W. Question: If Alphabet Inc. reports a consolidated return, does the s.179 survive as a current year deduction, or will the s.179 need to be carried forward until such time as W reports a taxable profit? Offhand, I think on a consolidate return, the s.179 will be usable, but I thought it best to ask. Thanks in advance --

"Loan basis" should not be a factor unless the shareholder actually effectively loaned the money to the corporation himself (herself). This differs from a partnership where a partnership loan can be added to basis simply by the partner's guarantee on the loan.

Thank you. A strong possibility I will go.