RoyDaleOne

"investing in an illegal scheme", what a funny statement that is. Yes, if a person knows that the scheme is illegal before they invest then a theft loss is not allowed for tax purposes. However, does a Ponzi victim know that it is an illegal scheme up-front. That by the very nature of the theft, the answer is no. Yes, I am aware of the tax shelters, illegal transaction, etc disallowance of the theft loss deduction. However, to cast the investors in "Wealth Pools International", I don't have one fact to support that contention. Yes, if a person knows that the scheme is illegal before they invest then a theft loss is not allowed for tax purposes. There are also over various limitations, however, the general rule is that the theft loss is allowed, and exceptions do exist. Regs. Sec. 1.165-8. Theft losses. -------------------------------------------------------------------------------- (a) ALLOWANCE OF DEDUCTION. (1) Except as otherwise provided in paragraphs (B ) and (C ) of this section, any loss arising from theft is allowable as a deduction under section 165(a) for the taxable year in which the loss is sustained. See section 165(C )(3). Edwards v. Bromberg, KTC 1956-7 (5th Cir. 1956) We reject it on reason because the word "theft" is not like "larceny", a technical word of art with a narrowly defined meaning but is, on the contrary, a word of general and broad connotation, intended to cover and covering any criminal appropriation of another's property to the use of the taker, particularly including theft by swindling, false pretenses, and any other form of guile.

Well, my comment is if there is fraud in the inducement or false pretenses there is a crime and therefore a possible theft loss. Most of the cases I researched had factors other than a "normal" swindle. "I don't know how you define it as a theft if he willingly gave the money to his friend instead of the guys being charged." And why not? His friend was being swindle at the same time. That the way this type of fraud works. I had one of these for about $250,000, newspaper clippings covering the fraud worked great as proof. The SEC new release is pretty good evidence that the Government thought this activity was illegal. You can file a normal return and amend the return for theft loss asking for a refund, making all the disclosures. Knew or should have known is not the test for this activity, heck, if that was the test NO Ponzi would work. It is the deception that makes the scheme work (I know greed has to be there too.).

I recommend all cash sales. lol

Sunday School Lesson: Jacob and Rebekah deceive Isaac into blessing Jacob rather than Esau. While you may not agree with the foregoing, the lesson is clear --- do unto others as you would have others due unto you. In God we trust, all others pay cash. Family fight 101.....

How does one capitalize value? You capitalize cost. Did not know you wanted a tax 101 answer. Now--- If you have properly capitalized the franchise costs as a Section 197 asset, the remaining amortized balance, if a loss can be expensed in the year Cite: 197 Asset ----- (10) FRANCHISES, TRADEMARKS, AND TRADE NAMES. (i) Section 197 intangibles include any franchise, trademark, or trade name. Basis ------ (ii) Except as otherwise provided in this section, basis is determined under section 1011 and salvage value is disregarded. Write-off -------- (B ) ABANDONMENT OR WORTHLESSNESS. The abandonment of an amortizable section 197 intangible, or any other event rendering an amortizable section 197 intangible worthless, is treated as a disposition of the intangible Value ----- (ii) EXCEPTIONS. For purposes of this paragraph (e)(2)-- (A) A trademark or trade name is disregarded if it is included in computer software under paragraph ©(4) of this section or in an interest in a film, sound recording, video tape, book, or other similar property under paragraph (c )(5) of this section; (B ) A franchise, trademark, or trade name is disregarded if its value is nominal or the taxpayer irrevocably disposes of it immediately after its acquisition; and

If 197 asset, can write off in year of abandonment.

I am told that the quality at Dell has slipped some. I have an HP portable, works great for me. I also use a local company to build my computers. I get a good machine with a three year warranty. When I do upgrade, say memory. I am given credit for the old memory.

I have some "parrington" friends in Mount Vernon, WA. There should be no taxable income, if your friend had nothing to do with the withdrawal. It was a theft, under false pretense, fraud, forgery, etc. The problem is naturally, communicating that to the IRS.

Yes, just make sure election is also filed. I think someone said they use the note feature for this.

"collateral on the guarantee, rather than on the loan." If the loan had been in the personal names that could have made a different. Because the loan, as pointed out, was in the "business name" there is no increase in basis because of shareholders' loans.

I agree that 1099's are wrong more than right. Ask the appeals officer, how is the State CA qualified to determination disability and thereby file a corrected return. The appeals officers knows or should know that the position they have taken is wrong, relative to the 1099.

Is the driveway two lane? One for each?

Tell your client you need a log of the "trips" made by the client and made by the tenant so that you can pro-rata the use, if over 50% for business, the client gets the deduction. Date, time, purpose etc of each trip. <G><g> :rolleyes:

The exclusion is not available to partnerships, LLC, only individuals and maybe to bankrupt estate or grantor trust. Sale and or exchange to related parties as defined under IRC 267( B ) or IRC 707( B ) are not eligible for the exclusion.

Personally, I don't care if CCH merges the e-filed database for Taxwise and ATX; provided that the software I purchase will work correctly.

An accrual should be made in each period (year) the deferred compensation is earned. Matching the expense to the period it was earned by the salesman. This accrual should be made if it is more likely than not the salesman will vest. Or some stupid test like that. Footnote is also required.

Tier 1 amounts of income required to be distributed currently if payable out of either income or principal to the extend paid out of income. Tier 1 distributions less than or equal to DNI can be comprised of 100% taxable income. Tier 2 amounts (those other than Tier 1 and specific bequests IRC 663(a)) which are paid, credited, or required to be distributed. Tier 2 distributions are taxable income to the extent DNI exceeds the Tier 1 distributions. IRC 661 IRC 662 The IDD can not exceed DNI.

Second KC John.

For what it worth. ATX called yesterday, discount until 6/30/08, told them I mostly likely would renew, however, 1. Wanted to know if CCH would warranty the program to add 2+2 and get 4. 2. With a 45 day refund period why would I order software that would not be delivered until who knows when. 3. Features (software) promised for last year was as of today not delivered as promised. I am waiting to see that the software is ready to use.

Without access to the K-1 or the partnership record, how can you do the return? However, I would guess the income from the lawsuit is ordinary and there will be no capital gains. Zero basis start of year. Plus income Minus distributions ---- My guess is zero basis end of year.

I like the Alfred Thaddeus Crane Pennyworth pic better than Alfred Joesph Hitchcock pic. You could assigned the unasigned at sale time. Billing time love that song. You know it?

I looked at your request and could not find an answer without using manual allocations. The depreciation could be setup as unassigned for the increased depreciation expense computations, however, I could not find a way to automatically allocation this amount to the K-1s. I have not used the ability to create some type of special worksheet, so I don't know how to do that.

Regs. Sec. 1.263(a)-1. Capital expenditures; in general. -------------------------------------------------------------------------------- (a) Except as otherwise provided in chapter 1 of the Code, no deduction shall be allowed for: (1) Any amount paid out for new buildings or for permanent improvements or betterments made to increase the value of any property or estate, or .... See section 263A and the regulations thereunder for cost capitalization rules that apply to amounts referred to in paragraph (a) of this section with respect to the production of real and tangible personal property It is my thinking that this applies to all types property.

One of the things I noticed are you using the server as a work station? My setup is very much faster then the times given. I have two workstations and a server. The sever is just that a server, no one uses as a workstation. I am running gbit lan (1000) the cost is cheap. At least 1gig if not 2gig in memory on all machines. Under 30 sec to login and open a small 1040, a few seconds more on a large one. Most of the 30 sec is to type the login stuff.

Von-Lusk v. Commissioner, 104 T.C. 207 "P is a partnership organized for the purpose of managing, holding, and developing property for investment. P acquired certain raw land (the property) which it planned to subdivide. It planned to build houses on the lots of the resulting subdivision. P deducted the costs of meeting with government officials, obtaining building permits and zoning variances, negotiating permit fees, performing engineering and feasibility studies, and drafting architectural plans as "other deductions." P also deducted property taxes in respect of the property. Sec. 263A(a) and ((1), I.R.C., precludes the deduction and provides for capitalization of direct and the allocable share of indirect costs allocable to property "produced by the taxpayer". And sec. 263A(g)(1), I.R.C., states that "The term 'PRODUCE' includes construct, build, install, manufacture, DEVELOP, or improve." (Emphasis added.) Held, the Commissioner is sustained in disallowing deductions and requiring capitalization of the foregoing costs as well as property taxes paid by P in respect of the property, notwithstanding that P did not make any physical change to the property during the taxable years. The foregoing costs were the initial steps ancillary to actual construction of the buildings contemplated to be built. They may properly be treated as part of the development costs. Cf. Louisiana Land & Exploration Co. v. Commissioner, 7 T.C. 507 (1946), affd. 161 F.2d 842 (5th Cir. 1947). The result is not affected by the fact that local government regulations may delay or even ultimately preclude completion of the project." I believe that this applies and the "fees", etc, should have been capitalized.