RoyDaleOne

I agree with kc except the partial interest. You can give a complete interest in the building.

However, this terms are words of art. For example, you can not give the use of the

building because that is a partial interest. The landlord will get the building back at

sometime. That is not the case if the building is destroyed.

I don't see where there is a deduction because of the taxpayers intent at the

time of purchase.

The land by itself was worth the purchase price and the building had no value.

Why else do what they are doing?

See:

Market Segment Papers Construction Industry

263 regs.

Also

http://www.irs.gov/businesses/small/indust...d=97934,00.html

Also, can one say self employment tax for general partners?

Pub 523

FORECLOSURE OR REPOSSESSION. If your home was foreclosed on or

repossessed, you have a sale.

You figure the gain or loss from the sale in generally the same way as

gain or loss from any sale. But the selling price of your home used to

figure the amount of your gain or loss depends, in part, on whether you

were personally liable for repaying the debt secured by the home, as shown

in the following chart.

IF YOU WERE... THEN YOUR SELLING PRICE INCLUDES...

-------------- -----------------------------------

NOT personally the full amount of debt canceled by the

liable for the debt foreclosure or repossession.

personally liable the amount of canceled debt up to the

for the debt home's fair market value. You may also

have ordinary income, as explained next.

This from 2006 Pub.

As pointed out above rental payments made to an agent of the landlord are not required to be reported on the 1099.

It does not matter what type of entity the agent is.

The agent is subject to the reporting requirements as noted by kcjenkins.

LAND DEVELOPER

In the industry, the developer is generally the owner of the development. The developer acquires the raw land, obtains approval for development, secures the financing, and begins to clear the land, install roads, utilities, etc. The land developer may also build the homes in the development, sell the lots to a builder that will build the homes, or a combination of both.

Income Recognition -- Applicable Method

Since land developers are involved in the production of property without contracts, they generally report their income from the sale of a parcel of property at the time of settlement/closing.

Cost Recognition

The direct costs incurred by a land developer in the development of real estate (including the original cost of the land, direct materials and direct labor) should be capitalized according to IRC sections 263(a) and 263A.

The uniform capitalization rules of IRC section 263A(a)(1) apply to land developers, and mandates certain costs to be allocated to property produced by the taxpayer as real property. These costs include pre-production costs (real estate taxes, zoning costs, design fees, etc.), production costs, and post-production costs.

IRC SECTION 263A(a)(1) In general. -- In the case of any property to which this section applies, any costs described in paragraph (2) shall be capitalized.

VON-LUSK v. COMMISSIONER, 104 T.C. 207 (1995) -- Predevelopment costs were capitalized per IRC section 263A because taxpayer was involved in the "production" of property.

The land developer must determine the accumulated production expenditures with respect to each unit of property per Treas. Reg. section 1.263A-11. Each unit of property, as defined in Treas. Reg. section 1.263A-10, is treated as a separate costing unit to which all direct and indirect costs described in section 263A(a) are required to be capitalized.

HOW ARE COSTS ALLOCATED TO EACH PARCEL OF PROPERTY?

Generally Accepted Accounting Principles (GAAP) establishes a hierarchy of cost allocation methods via SFAS 67 Paragraph 11. These methods (in order) are:

1. Specific identification method.

2. Relative value methods (appraised value, relative assessed value for real estate taxes)

3. Other allocation methods (square footage)

If the lots have the same general characteristics and size, cost can be allocated evenly to each lot. If the lots have similar characteristics but different sizes, cost can be allocated on square footage. If lots have different characteristics, costs can normally be allocated based on relative sales value.

In Homes by Ayres, 795 F.2d 832 (9th Cir. 1986), the court addressed job-costing methods:

"Taxpayers accounted for their construction costs by accumulating costs for each phase of a subdivision . . . taxpayers would accumulate all direct and indirect costs for the year and then allocate them according to one of three methods to determine the cost of the houses sold in each phase (relative sales value method, average cost method, and "square footage method"). . . . All three of these methods comport with generally accepted accounting principles and the IRS admits that they accurately reflect income."

Interest is required to be capitalized during the production period. Code Section 263A(f)(1). Interest may be deducted after the production period of the property ends (if the other requirements for a deduction are satisfied). Reg. Sections 1.263A-8(a), 1.263A-9(a), and 1.263A-12©.

This is a very specialized area many variables as to cost allocations, etc.

Can you say not capital gain income.

Not investment property therefore not investment interest.

(d) Payments of rent made to rental agents (but the agent is required to

report payments of rent to the landlord in accordance with Sec. 1.6041-

1(a)(1)(i)(B ) and (2)).

I use the atx doc manager.

I like it very much, however, I scan from paperport pro v.11.

The scan from doc manager does not work correctly for me.

They said get another scanner.

I drag and drop the scans to the client tree in doc manager

and delete the original scan file.

Note, I still have the single user version and it will not work

from a server to workstation. I called CS in mid-last year

and they said it was to be upgraded to the normal three

user for this tax season. Have same problem with the

depreciation program. The writeup program is still not

complete, that is all the features are not finished.

You can create a filing system of trees in paperport.

I recently moved (in December).

I notified ATX of the new address.

The billing address was changed on my account, however the

shipping address was not changed.

Just noticed it today so notified ATX of the

shipping address change, today.

How dumb of me not to change both addresses?

Notice 2006-86

The rule if both taxpayers claiming the child as a qualifying child are

the child's parents is that the child is treated as the qualifying child of the parent with whom the child resides for the longer period of time during the tax year. If the child resides with both parents for the same amount of time during the tax year, the child is treated as the qualifying child of the parent with the higher adjusted gross income.

(e)Special Rule for Parents

A taxpayer can qualify as a head of household if he maintains a household that constitutes the principal place of abode for his father or mother or both. [13] The requirement that the taxpayer must be single does not change under this rule, but in this case, the taxpayer is not required to reside in that household. Reg. Section 1.2-2©(2).

The household must be the parent's principal place of abode for the entire taxable year (rather than the generally applicable one-half-year requirement), and the taxpayer must be entitled to claim the dependency deduction with respect to the parent. A parent is considered as occupying the household for the entire year, notwithstanding temporary absences from the household due to special circumstances, such as illness or vacations. In addition, the fact that the parent dies within the taxable year will not prevent the taxpayer from qualifying as head of household, if the household constituted the principal place of abode for the parent for the preceding part of the taxable year. Reg. Section 1.2-2©(2).

Note: Must meet support test...

See Pub. 2187. Tax Item: Support Test and Worksheet.

In computing the total support of an individual and the amount contributed by any person toward that support, the fact that support payments are made from tax-exempt income or from capital or other sources is immaterial. [52] Tax-free support items include certain social security benefits, welfare benefits, medical insurance premiums or benefits, armed forces family allotments, non-taxable pensions, tax-exempt interest, and borrowed amounts. [53]

Income test...

Tax-exempt income, such as certain social security benefits, is not

included in gross income.

May I suggest you use the shareholder basis worksheet in the program.

It is under K-1. Print out a blank if you want.

The loans actually don't effect the shareholder's stock basis, however,

the loans may be taken into account to determine how much loss may be

deducted.

How do you divide 365 by 2 and end up with an even number?

I was using cynthia@RV statement of the facts as she knew them.

One day at grandparents neither parnets had them, and the remaining even.

does the phase "more than half the year" come in to play.

50/50 so they may lose......

EASEMENTS AND RIGHTS-OF-WAY. Income you receive for granting easements or

rights-of-way on your farm or ranch for flooding land, laying pipelines,

constructing electric or telephone lines, etc., may result in income, a

reduction in the basis of all or part of your farmland, or both.

EXAMPLE. You granted a right-of-way for a gas pipeline through your

property for $10,000. Only a specific part of your farmland was affected.

You reserved the right to continue farming the surface land after the pipe

was laid. Treat the payment for the right-of-way in one of the following

ways.

1. If the payment is less than the basis properly allocated to the

part of your land affected by the right-of-way, reduce the basis by

$10,000.

2. If the payment is equal to or more than the basis of the affected

part of your land, reduce the basis to zero and the rest, if any, is

gain from a sale. The gain is reported on Form 4797 and is treated as

section 1231 gain if you held the land for more than 1 year. See

chapter 9.

TIP: Easement contracts usually describe the affected land using

square feet. Your basis may be figured per acre. One acre equals

43,560 square feet.

IRS Farm same applies to any land.

Quick answer -- two options..

Close the books on date of sale -- 50 50..

Use number of days stock owned to get percentage.

Added..

A shareholder who disposes of stock is treated as a shareholder for the day of disposition for this purpose. Reg. Section 1.1377-1(a)(2)(ii). However, an S corporation may be able to elect out of the per-share, per-day rule if a transfer of shares terminates a shareholder’s interest in the S corporation. Reg. Section 1.1377-1((1).

Does the basis of the property have to be allocated on say a per acre?

Is the easement for just part of the property?

A taxpayer qualifies as a head of household if the taxpayer is not married as of the close of the taxable year, or is not a surviving spouse. In addition, the taxpayer must either (1) maintain as his home a household that, for more than one-half of the taxable year, constitutes the principal place of abode for his child (or certain other dependents who are members of the household), or (2) maintain a household that constitutes, for the entire taxable year, the principal place of abode for the taxpayer's mother or father. Finally, more than one-half of the cost of maintaining the household during the taxable year must be furnished by the taxpayer. Code Section 2((1).

Ordinarily, a taxpayer must be able to claim the exemption for a child as the taxpayer's dependent to qualify as a head of household.

However, for taxpayers who are divorced, a parent can be a head of household even if she cannot claim the child as a dependent if the dependency exemption was either waived or transferred under a qualified pre-1985 instrument.

HEAD OF HOUSEHOLD

You may be able to file as head of household if you meet all the following

requirements.

1. You are unmarried or "considered unmarried" on the last day of the

year.

2. You paid more than half the cost of keeping up a home for the

year.

3. A "qualifying person" lived with you in the home for more than

half the year (except for temporary absences, such as school).

However, if the "qualifying person" is your dependent parent, he or

she does not have to live with you.

A qualifying child is not taken account in determining a taxpayer's earned income credit, unless the taxpayer includes the name, age, and taxpayer identification number of the qualifying child on the taxpayer's tax return for the taxable year. Code Section 32©(3)(D)(i).

The taxpayer identification number for this purpose must be a social security number issued without employment restrictions. It cannot be an individual taxpayer identification number, which is a tax processing number issued by the IRS to nonresident and resident aliens, their spouses, and their dependents who cannot obtain a social security number, or an adoption taxpayer identification number, which is a temporary identification number issued by the IRS for a child in the domestic adoption process who cannot obtain a social security number. Code Section 32(m). See Section 4.8 for discussion of individual and adoption taxpayer identification numbers. It also cannot be a social security number issued by the Social Security Administration with the phrase "Not Valid for Employment" printed on the social security card.

Tax Credits

Resident aliens generally claim tax credits and report tax payments, including withholding, using the same rules that apply to U.S. citizens. The following items are some of the credits you may be able to claim: child and dependent care credit, credit for the elderly and disabled, child tax credit, education credits, foreign tax credit, earned income credit, and adoption credit.

Substantial Presence Test

You will be considered a U.S. resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the United States on at least:

31 days during the current year, and

183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:

All the days you were present in the current year, and

1/3 of the days you were present in the first year before the current year, and

1/6 of the days you were present in the second year before the current year.

Children residency normally follows the parents residency.

Does the husband also owe the lawyer?

Most likely the husband's payments can not be garnished for wife's debt.

Normal, scare tactics and the attroney will attach aything and everything

he can. Even if not entitled to such attachment.

Where did my post go?

Who is the income beneficiary?

Is the trust required to distribute the current income each year?

This can different from the corpus beneficiary.

The trust itself can be taxed on the income.

Not enough information to say much more.

This techinque is sometimes used to freeze estate values.

Do you have a zero basis herd? The goal of all farmers,

for tax purposes.

Well, your last post makes it a simple task to do.

At least it not a tax practice with a/r wip, etc.

:)

A donation for the use of the building is not available, because,

it is not the complete interest of the owner of the building. That is

the owner is going to get the use of the building back at some time in the future.

Only, a complete interest donation is deductible.

Yes, I know there are exceptions, however, I could not find that applied

to these facts.

However, if the donation was to consume the building by fire or demoilation

by the firemen then you may have a donation of the complete

interest of the owner in the building. This may give raise to

a deduction.

The clean up costs were incurred incidental to the the donation

of the building. Generally, incidental costs to a donation are deductible.

If, what OldJack says is the facts, I would agree.

I think the cleanup would be also deductible.