Don Hughes

Thank you all

In doing so, I put the distribution on the K-1, Line 16D. It did not make any other adjustments to the K-1 and the tax due the IRS did not change. What may I be doing wrong?

S-Corp, Medical Office, The Dr and her employee husband love to dance. The question is, they have paid for all their pleasures from their Corp checking account. I have not deducted the pleasure expense from the Corp return. The question is, the expenses, although not a Corp. expense flows to their personal return via K-1 and is counted as taxable income. To make things more interesting, the client set up an LLC to receive income and pay expenses for their dance activity. They are going to issue 1099-NEC for the services (dance expense) they paid for out of the Corp. which has bloated the ordinary income on the K-1. Since the expenses were paid with a corporate check, it seems to me that the S-Corp (Medical Office) should 1099-NEC the LLC that was set up to handle their dance activity and the LLC should 1099-NEC the expenses they had for dance instruction, etc. Going forward this will not be a problem as corrected measures are in plane. I hope this makes sense, thanks for your help.

Thank you once again for your assistance!!

A 2 Member LLC was set up by our client as they travel around the country and dance. According to the LLC members, they feel their income ceiling is around $25,000 per year, if they do well. They have been dancing for many years as a fun hobby; this is a husband/wife thing. This year, $900 1099 received with expenses of $200,000+. They expect to NEVER have a profit. My understanding is that if there will NEVER be a potential for a profit, we deduct expenses to the extent of the income only. An LLC could be the chassis should they wish to file a 1065, but in reality, a Sch C would better serve the purpose. I have no comfort in filing a 1065 with a $200,000 expense against a $900 income when the taxpayer's have told me, in writing that they will NEVER turn a profit. I feel silly for even posting this but am looking to see if I am looking at this wrong, opinions or reference material please.

Thank you!!

Insurance agency sold, Questions are: 1) Sold in November 2023, not reported in 2023. No income received but installment plan set up for 3 years. 2) Sale pride = to 1 year's commissions, to be paid over 3 years, equal payments each year to be received. What is the basis, the 1 year commission? Do we need to amend 2023 since the sale occurred in 2023 even if no income exchanges, per the TP? Thanks. Ya gotta love the 11th hour folks!!

Thanks all!!!!!

TP went to Africa to take a free counseling seminar, and he is a counselor. Would travel, Motel and food be a deduction for the days of the seminar only? I would think so, but does it matter who put on the free seminar and if it was only available in Africa, would that exclude the business deduction? Thanks again.

Thank you all!!!

I have a client that has set up an LLC for their "competition dance business". How long can an entertainment business operate at a loss? They never expect a profit, based on taxpayer estimate. Should be a hobby. Since there is an LLC, can an LLC be the tax reporting form for a hobby, seems not likely.

TP fell in love on-line. The scammer had the TP send money to them under the guise of buying gold bars. The TP withdrew his around $70,000 from his 401(k) and added around $70,000 from his savings account and sent it to the scammers. He invested around $140,000 in this scam. He has all documents as well as a "fake" Certificate of Purchase. The question is, can the TP take the $140,000 as a ST capital loss? The scammers were in Canada. He is also a victim of identity theft, so we are working with the IRS to clear this up.

Looking for guidance in preparing the 1041, who can I request information from. Thank you

Is anyone other than us having Portal Issues? Putting info from 2020 into portal from ATX? Prior Year from ATX into Portal? Thanks for your input. Don

Thanks for allowing me to join. Concerned for the worksheet for the workaround on unemployment on ATX. If it exists, I can not find it. Where is it and what is it called? Thank you.