Sage

Thank you for the response! Client would prefer to back file so he could sleep at night again. (But the potential of audit is a big concern, no documentation to win the case) I’m thinking to request transcripts to assess the situation and gather more information before take further action. Would filing a POA for me to request transcripts wake up the sleeping dog. Triggering collection, audit etc? Client moved 8 years ago hence have no idea if IRS has been going after him/ the business or not. 

All client provided are picture of handwritten P&L showing loss, 1099k between $20k to 62k (missing for some years) , payroll forms and W2 issued. With 1099K I would believe there is a high probability IRS has assessed taxes for the business without the expense. 
 

Thank you! 

12 hours ago, kathyc2 said:

Yes.  Remember you need to add the additional cash given of 80 (410 - 330) to the basis of old property on line 18.

Line 16 & 17 410,000

Line 18         330,000

Lines 19 & 24  80,000

Line 25         330,000

How about if mortgage is involve. Mortgage with old property and mortgage with new property. Should the be included on any of the line? 

15 hours ago, DANRVAN said:

No, the gain from the first property is deferred to the sale of the second property.

The total gain is the same, but there a possibility that the combined gain on the second sale could push the taxpayer into a higher tax bracket.

 

Thank you for the clarification! 
 

Appreciate everyone taking your time to answer my questions! 

21 minutes ago, kathyc2 said:

Basis of new property is 330 (410 - 80), not 250.

Would that be the number showing on line 25 of 8824? 

1 minute ago, kathyc2 said:

Basis of new property is 330 (410 - 80), not 250.

I see. Thank you!!!!!!! 

Does 1031 incur a higher taxable gain when the 1031 property is eventually sold?

A very simple example - 

Cost: $250k (assuming no adj to basis) 

Sold: $330k

Gain = $80k (deferred) 

Cost of exchanged property: $410k

Basis of the like kind property received: $250K

If the exchanged property sold for $500k 

Taxable Capital Gain - 

No like kind exchange: 

1st property: 330k - 250k = $80K

2nd property: $500k - 410K = $90K

Total: 160K 

Like kind exchange:

Gain = 500k - 250k = $250k

Please advise if I m missing a step or information. Thank you!

17 hours ago, schirallicpa said:

The case was a sole proprietorship and the total money was around $25000 -Sales tax and I&P.  I don't remember the actual tax amount now, but I think around 14K.   It took several months but finally got a settlement for $5000 in the fall of this year.  About 15 month process.  I had to fill out paperwork under the EIN number as all zeros and then paperwork under individuals SS# providing her personal assets and income.  

Just another follow up question. If the business doesn’t exist anymore for over 5 year, do last 3 year returns, credit report and bank statement still need to be provided with the OIC? Thank you!

May I ask what does it mean by letting it die. Similar situation, client recently found out business return (1120) has not been filed since 2012 for serval years. The business has been closed (not officially with IRS and state). There is no book, only pictures of hand written P&L showing loss for all those years. Client would like to back file just to do the right thing, but concern about being audit and end up with a tax bill because the return was late for over 10 years with loss and there is nothing to prove any of the expense. Any insight would be appreciated. 

I’m having issue with search as well. I was just simply searching NYS,  it said 0 result. Same when I search for other term. 

Thank you for sharing! Does anyone know if NYS OIC will be approved if Taxpayer own a primary resident that is completely paid off, worth $600k? Retired, no income, no other debt, no big saving. Around $60k with interest and penalty. The originally sales tax was $8k. If OIC is not going to work out, does anyone know other way to waive the interest and penalty. Thank you for any insight and suggestion. 

Similar case for my client. May I ask how much was the sales tax liabilities (excluding interest and penalties) and was it from C Corp? How long was it ago?