kcjenkins

A new business is open and one of the owner’s friends wants to send him flowers for the occasion. They arrive at the business site and the owner reads the card: “Rest in Peace.” Understandably the owner is angry and calls the florist to complain. After he tells the florist the obvious mistake and how angry he is, the florist replies, “Sir, I’m really sorry for the mistake, but rather than getting angry, you should imagine this. Somewhere there is a funeral taking place today, and they have flowers with a card saying, ‘Congratulations on your new location.’”

No, if they sold the asset in the same year they bought it, there is no Sec 179 deduction. While the code does not specify this, it does specify that Sec 179 deduction is recaptured in the year the usage has dropped below 50%. Usage is below 50% if sold. So if you took it you would then have to recapture it, zeroing it out.

They did not SELL the AP, David, although it sounds like they agreed to pay them all off, from the proceeds, and that was merely listed in the sales agreement to protect the buyers. There should be neither a gain nor a loss from paying off their debts.

Seems to me, they usually 'accept' the ones in their favor, i.e. more tax owed, and reject the ones in the taxpayer's favor.

The Wife Song https://youtu.be/XpFD-kgQxnI

Here are a few links that might help: http://www.law360.com/articles/456306/assessing-tax-consequences-of-asset-sales http://www.fraziercapital.com/books/guide/15.pdf Just remember, the corporation itself is taxed on any gain from selling the assets to the buyer. Second, the shareholders are taxed on proceeds from the corporate liquidation that frequently ensues.

Welcome back, Dot.

IRS Releases Plan for Fraud Victims to See What Thieves Stole Washington, D.C. (November 10, 2015) By Keri Geiger and Margaret Collins Bloomberg (Bloomberg) The Internal Revenue Service has introduced a formal policy to assist identity-theft victims in getting copies of bogus tax returns filed in their name. The measure comes after a surge in taxpayer identity theft during the 2015 filing season left many victims frantic to learn how much of their personal data thieves had obtained. Many were then frustrated by the agency’s refusal to provide answers. The logjam was reported by Bloomberg News in April and drew the attention of Republican Senator Kelly Ayotte of New Hampshire, who put pressure on the agency to act. The IRS, which posted instructions for fraud victims on its website for the first time this month, said it would acknowledge requests for copies of returns within 30 days and respond within 90 days. Due to strict IRS privacy laws, some of the information will be redacted to prevent fraud. “We have decided to change our policy regarding disclosure of fraudulent identity-theft returns to victims,” IRS Commissioner John Koskinen wrote in a May 28 letter to Ayotte. At that time, the IRS said it would develop a way for people to access the fraudulent returns. The IRS said in June that identity thieves had stolen information on about 100,000 U.S. taxpayers from the agency’s website and used the data to file some 13,000 fake 2014 tax returns and get about $39 million in refunds. The agency had said part of the problem in getting the fake returns to victims was a conflict in existing policies. While the IRS legal department allowed sharing such information in certain cases, employees were following a section of the tax code that said they could face criminal penalties for improper dissemination of personal data. Many of the identity thefts resulted from thieves getting past security filters on the agency’s website, according to the IRS. That allowed them to gain access to past tax returns, which contained the information they needed to file fake returns. In August, the IRS said it identified an additional 220,000 taxpayers whose information may have been compromised. The new policy, detailed on the IRS website, lets taxpayers request a copy of a fraudulent return by mailing a letter to the IRS and including information such as their Social Security number and proof of identity like a copy of a driver’s license or passport.

Yes, that's what I was assuming. I just hate double negatives, because they can make it really confusing. Thanks for taking my post as I intended it, I almost went back and deleted it because I did not want you to think I was criticising you, @TaxGuyBill. We've all done similar changes that led to a bad sentence, now and then.

Don't you just love it when clients try to DIY their financial affairs without asking for your professional advice? Because she has kept control of the money she's put in since he became 18, that could be argued those were not 'completed' gifts, If so, when she transfers it to him it's going to be treated as one gift now of the entire amount, except for the amounts given in the first 17 years into the 'custodial account', and the earning up to then. Since then, earnings would need to be divided, calculated based on 'his' percentage, [the first 18 years] and' her percentage. She was doing it right, but then changed it. Now, remember, I'm not in possession of any of the documents, so I could be wrong, depending on her state law and the actual details of how the account was set up. But I'd advise that you dig a bit, before you advise her. Hopefully, Fidelity set it up right, and she's just using the term 'joint account' in a generic sense. There's a good chance @MsTabbyKats, that it's ok, but we don't know what she told Fidelity, etc. Look at the paperwork, talk to her Fidelity broker, etc, before you make the call.

Absolutely deductible. Just like you taking a class on trusts would be.

Sorry, just could not resist !

If the Trust has significant assets, it always makes sense to consult a competent attorney early on. One tricky issue avoided or prepared for can pay for it many times over. It always makes me think of the old English saying, "penny wise and pound foolish" how many people try to avoid a modest cost for competent legal advice when any problem can cost them big time. Just as they often do with tax advice.

I think you are correct, it does require both positive action and notification to change it.

In the spirit of CYA, I'd call, or better yet mail or email, with the suggestion and your reason. It's up to them, but you are showing them that you are looking out for their best interests, either way. Can't hurt, and might get you some good word of mouth advertising if they tell a friend or two how thoughtful and through you were.

And put that advice in writing, even if it's just an email. Just to CYA. Clients can get VERY forgetful, if they make a choice that comes back to bite them.

Well, while the PAYER has a $600 threshold, the RECIPIENT has a $400 threshold for SE tax, remember. Unless this truly is a one-time activity never at all likely to be repeated, I'd put it on the C-EZ because while it might not be his PRIMARY business, it clearly was "work, for compensation" and thus is "self-employment income".

Well, when Franklin came up with the idea it made sense, because illumination was really the only thing effected, because they were not heating with electricity or cooling with anything, really. So it's a solution that has out-lived it's usefulness. Of course, governments almost never kill a program for such a "silly" reason.

I don't think you really meant the double negative? Alternatives: The instructions don't really say this, but the gobbledygook in the Tax Code does. I don't think the instructions really say this, but the gobbledygook in the Tax Code does.

I hope we read it wrong, but I read it as you did, Easy. And given the way government works, requiring redundant forms is hardly unusual.

If you do change, it will only be forward in 2016, and only 'required' if THEY NOTIFY YOU that the change is required. in my experience, if the client was only slightly over the limit, they did not get a notice. From the instructions for form 941: If you received notification to file Form 944, you must file Form 944 to report your social security, Medicare, and withheld federal income taxes for the 2015 calendar year unless you contacted the IRS between January 1, 2015, and April 1, 2015, to request to file Forms 941, 941-SS, or 941-PR quarterly instead and received written confirmation that your filing requirement was changed. You must file Form 944 even if you have no taxes to report (or you have taxes in excess of $1,000 to report) unless you filed a final return.