RoyDaleOne

Well at least he looked at his return.

Trying bifurcating the installment sale into its components. Kind of wordy.

Try reporting only the Goodwill as an installment sale by dividing the sale in two.

Yes, in this set of facts, I would suggest that the labor is to be added to the cost of the improvements. All costs related to or associated with improvement are to capitalized.

If the husband purchased the farm in 1977 or before, she also may get 100% stepped-up basis.

That odd about the military, because they use the social as the service number, no separate number anymore.

Married members of the military may receive economic stimulus payments this fall, even if their spouses or children don’t have social security numbers, following the newly-enacted HEART Act (Heroes Earnings Assistance and Relief Tax Act of 2008). Prior to this new legislation, some members of the military did not receive stimulus payments, or received a reduced amount, due to the absence of an SSN for a spouse or child.

As an aside what is being constructed?

A sale of we have for income tax purposes because:

TRANSFERS OF PROPERTY TO SHAREHOLDERS

Williams v. Commissioner, T.C. Memo 1985-201

It is well established that the transfer of assets in satisfaction of indebtedness is equivalent to a sale upon which gain or loss is recognized in the amount of the difference between the basis of the assets transferred and the amount of indebtedness which is canceled. Kaufman v. Commissioner, 119 F.2d 901 (9th Cir. 1941), affg. a Memorandum Opinion of this Court; Rogers v. Commissioner, 103 F.2d 790 (9th Cir. 1939), affg., 37 B.T.A. 897 (1939), cert. denied 308 U.S. 580 (1939), rehearing denied 308 U.S. 635 (1938); Danenberg v. Commissioner, supra; Unique Art Manufacturing Co. v. Commissioner, 8 T.C. 1341 (1947), R. O'Dell & Sons Co. v. Commissioner, 8 T.C. 1165 (1947), affd., 169 F.2d 247 (3d Cir. 1948).

New York TSB-A-85(36)S:

Section 1141© of the Tax Law provides, in relevant part, that "Wherever a person required

to collect tax shall make a sale, transfer or assignment in bulk of any part or the whole of his

business assets, otherwise than in the ordinary course of business, the purchaser, transferee or

assignee shall at least ten days before taking possession of the subject of said sale. . .or paying

therefor, notifying the tax commission by registered mail of the proposed sale and of the price, terms

and conditions thereof. . . .

Whenever the purchaser. . .shall fail to give notice to the tax commission as required by the

preceding paragraph or whenever the tax commission shall inform the purchaser. . .that a possible

claim for such tax or taxes exists, any sums of money, property or chooses in action, or other

consideration, which the purchaser, transferee or assignee is required to transfer over to the seller. . .

shall be subject to a first priority right and lien for any such taxes theretofore or thereafter determined

to be due from the seller. . .to the state, and the purchaser, transferee or assignee is forbidden to

transfer to the seller. . .any such sums of money, property or chooses in action to the extent of the

amount of the state's claim. Within ninety days of receipt of the notice of the sale. . .from purchaser.

. .the tax commission shall give notice to the purchaser. . .and to the seller. . .of the total amount of

any tax or taxes which the state claims to be due from the seller. . .to the state, and whenever the tax

commission shall fail to give such notice to the purchaser. . .and the seller. . .within ninety days from

receipt of notice of the sale, transfer, or assignment, such failure will release the purchaser. . .from

any further obligation to withhold any sums of money, property or chooses in action, or other

consideration which the purchaser. . .is required to transfer over to the seller. . . .

For what it is worth...

Just to clear me head. You saying for example, that a bank that repossesses a vehicle pays sales tax on the repossession, unless, the bank has a resale permit?

The contract for deed was inherited and is now IRD.

I am not sure this applies,

Sale on installment,

http://www.irs.gov/publications/p537/ar02....publink10001274

However this may apply,

Regs. Sec. 1.453-6. Deferred payment sale of real property not on installment method

There is no need for FMV of the inventory, there is a need for the cost of the inventory.

The inventory is being taken as payment on debt the Company owed.

This is not a sale, more like, deed in lieu of foreclosure.

Did I miss that there were no purchases in the original post?

With the inference that the diamonds are being removed from inventory at their inventory cost, the reduction of the opening inventory could be correct. This is because the reduction in the inventory is the not results of a sale, and therefore, the inclusion of the such costs in cost of goods sold would not be necessarily be correct by definition.

"Merchandise withdrawn from sale. If you withdraw merchandise for your personal or family use, you must exclude this cost from the total amount of merchandise you bought for sale. Do this by crediting the purchases or sales account with the cost of merchandise you withdraw for personal use. You must also charge the amount to your drawing account."

Applying these instructions should result in the same answer.

The instruction get there by reducing "purchases" for the current year for the amount withdrawn.

Ignore the part of personal or draws etc.

No.

That is the selling price.

What is the taxpayer's basis? Purchase cost?

Did the taxpayer pay something for the "membership"?

May I ask what the inventory cost of the diamonds is?

That is does cost=fmv is that

1. wholesale fmv or,

2. retail fmv?

The reason I ask is to determine if there is a profit to the corporation or not in making such payment.

Sounds like an extended family member was willing to step up and take custody of the children without the need to have the State help. If that was the case then the Court Order was needed for legal reasons and therefore your client wins.

See:

http://www.irs.gov/newsroom/article/0,,id=133298,00.html

In general, to be a taxpayer’s qualifying child, a person must satisfy four tests:

1. Relationship — the taxpayer’s child or stepchild (whether by blood or adoption), foster child, sibling or stepsibling, or a descendant of one of these.

2. Residence — has the same principal residence as the taxpayer for more than half the tax year. Exceptions apply, in certain cases, for children of divorced or separated parents, kidnapped children, temporary absences, and for children who were born or died during the year.

3. Age — must be under the age of 19 at the end of the tax year, or under the age of 24 if a full-time student for at least five months of the year, or be permanently and totally disabled at any time during the year.

4. Support — did not provide more than one-half of his/her own support for the year.

Eligible Foster Child – Eligible foster child. An eligible foster child is an individual who is placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction.

If, these tests are met then the child is a qualifying child.

30 degrees this morning 5:45AM by my temperature gauge (or gage) at Winter Springs, Florida (think Orlando) about 50 miles from Taxbilly.

How warm were you Taxbilly (I want to write Taxabilly) lol.

This post is about freezing????

Good, good... By the way COD on a principal residence is not excluded under Section 121. <---- If that every comes up.

See:

http://www.irs.gov/newsroom/article/0,,id=133298,00.html

In general, to be a taxpayer’s qualifying child, a person must satisfy four tests:

Relationship — the taxpayer’s child or stepchild (whether by blood or adoption), foster child, sibling or stepsibling, or a descendant of one of these.

Residence — has the same principal residence as the taxpayer for more than half the tax year. Exceptions apply, in certain cases, for children of divorced or separated parents, kidnapped children, temporary absences, and for children who were born or died during the year.

Age — must be under the age of 19 at the end of the tax year, or under the age of 24 if a full-time student for at least five months of the year, or be permanently and totally disabled at any time during the year.

Support — did not provide more than one-half of his/her own support for the year.

Eligible Foster Child – Eligible foster child. An eligible foster child is an individual who is placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction.

Try Form 982, I think.

http://www.irs.gov/irs/article/0,,id=179073,00.html

Bullets... they need a lot of bullets...

The meal thing is almost impossible to defend, as noted above.

I recall, the last time I looked, you are required to sign the return if your are the preparer. It does not matter whether you are paid or not.

Is this still the case?

I had that problem last year and had to delete the efile info forms and re-load per support instructions and that fixed the problem. Only one client had the problem.

My error!!! I wonder why that was not clearly said, because, you all know I need all the help I can get.

Activity has been on going in this area in 2008.

If you can see this article:

http://tax.cchgroup.com/News/FocusOnTax/FO...nk.net#Article1