Trnr395

I have a corporation that has two owners. One of the owners took out $15,000 from the corporation at the end of 2010. Can this classify as qualified dividends or just ordinary dividends? They are a domestic corporation and they have been in business for around 25 years. Thanks

Okay, great guys!! Thanks for your help. I think they were thinking they could expense the total cost for the cattle but I didn't think that sounded correct. I think they only sold about a quarter of their cattle since last year was their first year with the farm. Thanks Again!

I have a question about beef cattle farmers. The cattle is raised until large enough to slaughter and sell the beef. If the client paid 15,000 for the herd of cattle would this be considered inventory or an asset for depreciation. I think dairy farmers would depreciate the cattle because they are held for long periods of time and are income producing (milk, etc.) I can't find much info regarding this specifically. Would the entire cost be expensed in the year that the cattle was paid for??

client sold his corporation to his son for $75,000 which will be paid monthly for a period of 10 years, including interest. Would this sale be reported on form 6252. I have done it this way and everything seems to come out right as far as a reportable gain for 2009. Just wanted to make sure I was doing this correctly.

I know a person who is selling his property. It consists of several log cabins, one in which is used as their main home. He built these all himself and they are worth well over 1 million dollars. He will exclude 500,000 because it has been his main home but the remainder of the gain will be taxed. He asked me in passing about he heard that "sweat equity" can be figured in. Basically since he built this property himself it cost him well below what it would of cost to hire a contractor. I have no doubt that the property is worth this amount but told him I was unaware of any "sweat equity" that you can use to increase the basis of the property and in turn reduce the capital gain on the sale. Anybody have any insight into the truth of this?

I have a client who passed away last year in may. Since he only had a few months worth of wages he qualifies for EIC based on wages for part of the year. Can he qualify for EIC in this case?

Yea, that is how I have always handled something like this in the past. I was just wondering if there was a better way to handle a transaction like this. Is there any items that could be used to increase basis....not really much for improvements on land??

I have a client who is considering selling some land that is considered a gravel pit. For this example he is selling the land for 500,000 and purchased the land 25 years ago at say 50,000. The land is going to be owner financed for ten years with 5% interest. Obviously this is going to be an installment sale each year for ten years and also interest income. Is there anything that I can add to the basis of 50,000. There hasn't been anything really done to the land except some blasting for granite, etc. They had talked about selling this material as stumpage but I am not sure how this would work in their best interest. Anybody have any insight on the best way to handle this or any advice?? thanks

I know this is a stupid question but is there any tax consequences on a corporation paying back a substantial size loan to one of the shareholders....other than on the balance sheet of course.

here is the scenario: A woman runs two sole prop. businesses. All running under the same ein number which is correct. The state identification numbers are different due to different unemployment contribution rates. I have them set up with two different accounts in my accounting software so I can keep everything seperate. My question is when I print out their w2s it has one as "Mary XYZ" dba "ABC Business", and Mary XYZ" dba "CBA Business" Now when I do my W3 should I do two W3's one for each business or combine all the info into one W3? Thanks

They purchased the prefab before the Nov. 6th date, but the house was delivered after Nov. 6th. I know this would generally be the purchase date but how is this different than hiring a contractor to build you a stick built home and the purchase date be changed to the date of the house actually being finished and you moved in. Just a thought... Brad

Based on the definition of "purchase" they would qualify wouldn't they. There isn't really a definite answer to this. I keep going back and forth with my opinion with this. Basically would buying a prefab. home be the same as having a contractor build you house and the date that it was finished and you could move into the home would be "based on the definition" the date of purchase?? Anybody else feel this way???

Homebuyer Tax Credit I know the rule regarding building a house or having a contractor build the house the closing date of the house is considered the date that you first move into the house. And the date for this $6500 tax credit needs to fall between Nov. 6th & June 30, 2010. But what about a prefab house. Is it any different. I have a client that purchased a prefab which was delivered and set up. They didn't get the keys to the house or could move into the house until after Nov. 6. The actual closing with the bank was before this date obviously. Would they be able to claim this credit because I don't see how this is any different than having a contractor build a new house?? Thanks Brad

How did you know that I was saving for a new fishing boat!! My wife is going to love this news!!

I have a sole prop that incorporated on July 1st. Wife handles payroll and filed the 3rd quarter 941 in the sole prop. name and not corp. Didn't start filing 941's under corp until 4th quarter. Sales tax was corrected toward the end of the year to show the corp paid sales tax starting in july. When I break the expenses up for the sole prop and corp and put them on seperate tax returns should I include the 941 amounts for the third quarter under the corp like it should have been or put them on the sole prop. Thanks

I have a client who was in the peace corp for 2 weeks in 2008 and rec'd a w2 for 290.32 wages. I have never done one with the peace corp wages but I do know that he rec'd stipends for rent/expenses in foreign currency when he was there in exchange for training and teaching he provided. Should this foreign currency be added as taxable income and how do I figure the dollar amount? Thanks

Can I file form 2553 right now for a single member llc to be electing corp status for 2009? They are on a regular tax year ending dec. 31.

I have a client who last year had return done and didn't claim all of her dependents. So I amended the return to include the other dependent that was seemingly forgotten about?? This dependent fit into the guidelines for getting her an extra 300 for the recovery rebate or stimulus check....but instead it was apparantly filed to late after that she only rec'd the 600 for herself. No problem....I will get her the additional 300 on this years refund. Now the dependent is seventeen years old and the credit didn't calc. correctly but I solved that problem. On her return she is rec'ving the 300 credit. Sent efile and it was rejected because of an error that states "Credit cannot be claimed because taxpayer rec'd the full amount based on her 2007 tax return." How do I solve this one. I went back and double checked the guidelines and she should have rec'd the 300. Any suggestions???

I understand how to calculate the gain or loss or the partners sale of ownership I am unsure how to report it and where.

He pretty much sold his share for the amount that he had put into the business. How does this flow over to his personal return. Is it through the k1 for distributions or as capital gain/loss on schedule D??

Should the member that sold his share know be shown as a 0 for ending capital account balance.

That is the way it done right now. Would the ending basis for the partner that has sold his share be 0 on his k1. I would assume it would have to be shown this way.

Last year I did a 2 member LLC which is automatically classified as a partnership. This past December 31 one of the members of the LLC sold his 50% ownership to the other. So know I have a one member LLC which would typically file a schedule C return. I am not sure how to prepare this. I had prepared the return thinking that the sale didn't take place until the first of the year but just read over the legal doc's and it says dec. 31, 2008. Do I still file the partnership return like I have prepared and does the partner that sold his share still receive a K1. I haven't handled this situation before and am a little lost. Any help would be greatly appreciated. Thanks Brad

I have done the same thing in the past....I will take the number but not plug it into the return.

Has anyone had this error before when trying to efile an s corp. I tried to efile this one last year and it said it couldn't because it was the first year that it claimed an s corp status. So i figured I could do it this year and now the rejection says Electronic Filing Identification Error must be listed in the efile database and in accepted status. Can I fix something on the efile to allow this to be accepted or should I just mail it in. Thanks