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About David

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    ATXaholics Anonymous

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  1. David

    EIN Issue

    Thanks for helping with this mess.
  2. David

    EIN Issue

    When you say the same business name can be used as her dba is this the same as your recommendation in your second sentence? Set up a new SMLLC with the Sec. of State and set up her old business name as a dba under the new SMLLC? Or am I not understanding you correctly? Thanks for your help.
  3. David

    EIN Issue

    SMLLC counseling business chose to be taxed as an S Corp for past years until 6/30/19. The client told me she was downsizing and moving into her home office and wanted to "close her S Corp", change to a SMLLC and file on Schedule C effective 7/1/19. I timely filed a final 1120S as of 6/30/19. The client dissolved her business name with the Secretary of State on 6/30/19 and then reinstated it on 7/1/19. She wants her business to be known by the same name she used for years. She tried to get an EIN using the same name but, of course, the IRS said she couldn't get an EIN for that business name. She doesn't want to use her SSN. I realize now that the best thing would have been to revoke her S election instead of filing a final 1120S. I can't see anywhere in my research materials that there is any relief for this situation and be able to retroactively revoke the S election. Has anyone dealt with this situation before and know if there is a way to retroactively revoke her S election or does anyone know what the best course of action is? If a retroactive revocation of S election isn't possible, then I am thinking that she can file a trade name under her true name (the name she has used and wants to continue to use) with the Secretary of State and then file for an EIN for the trade name. Is this possible or does the IRS issue an EIN for the true name only? The client also has a solo 401K plan - no employees. So I'm sure the plan will need to be split between the two EIN and business names. Any help would be appreciated. Thank you.
  4. LLC owns a commercial building that is rented to the LLC members' S Corp business. The LLC members are the same as the S Corp shareholders. On 12/10/19 the LLC did what they call a reverse 1031 exchange. They used a 1031 agent and purchased a new building, which they moved into in early 2020. They have yet to sell the old commercial building. I have never done a reverse 1031 exchange and will have to research further all of the intricate details of how to handle this. My main question now is that, as far as I understand, the 2019 tax return can't be filed until the relinquished building has been sold or the 180 day deadline (6/10/20) has expired. Therefore, an extension has to be filed. Is my understanding correct? Thanks for your help.
  5. I meant to say "Liabilities don't exceed assets..."
  6. Thanks for your help with this. I did read the article, several times. My last post was based on what I read. If that isn't 100% correct then I must still be missing something. Liabilities don't excess assets as of 12/31/18 for the SMLLC business. Also, all assets were transferred to the S Corp. If my last post isn't entirely correct then what part is not correct? Thanks.
  7. Okay, I must have misread what was being said. I understand that the SMLLC member is exchanging assets and liabilities for corporate stock. However, isn't this considered exchanged as of 1/1/19, therefore there is no beginning balance sheet for the 1120S? Since there is no beginning balance sheet then isn't the net of the assets less liabilities, as of 12/31/18 in the SMLLC balance sheet, considered capital contributed to the S Corp as of 1/1/19? Or is the company considered to be continuing on and just electing to be taxed as a S Corp. Therefore, continue with the 2018 balance sheet except, instead of member capital, the equity will be considered Paid in Capital? Thanks for your help.
  8. Thanks, everyone for your help. Judy, if I understand you correctly, you are in agreement with the others that the 1120S will show no beginning balance on the balance sheet? However, the equity balance for the 12/31/18 SMLLC balance sheet will be the contributed capital amount in 2019? Is this correct? Thanks.
  9. SMLLC business began operating in 2018 and was approved to file as a S Corp effective 1/1/19. I would think that the beginning balance sheet for Form 1120S should be the company's ending balance sheet as of 12/31/18 since the company was operating prior to being approved to be taxed as a S Corp. Is this correct? Thanks.
  10. Granddaughter and grandmother are both listed on the deed to the residence the granddaughter lives in. However, in order to purchase the house the mortgage is in the grandmother's name only. I'm sure that's why the grandmother wanted to be listed on the deed. The granddaughter lives in the house and pays the mortgage payments and all other expenses related to her residence. The grandmother does not live in the house. It appears from sec. 1.163-1 (b) that since the granddaughter is an equitable owner of the house that she can claim the mortgage interest even though she is not directly liable for the mortgage. Am I interpreting this cite correctly? The 1098 will report only the grandmother's name and SSN. Will the granddaughter's mortgage interest deduction raise red flags since the IRS will not have a 1098 that matches the granddaughter's SSN? Thanks.
  11. Thanks, guys. You've confirmed that I'm not to unreasonable in these situations.
  12. Client purchased a new truck in his name and has it capitalized in his S Corps books. His previous tax preparer allowed his previous vehicles to be depreciated and actual expenses deducted in the S Corp books even though the vehicles were titled in the single shareholder's name. The SH owner's personal use was included as W-2 income. So, in the past, the SH owner's vehicles titled in his name has been allowed to be treated as a company vehicle on his 1120S. It seems as though this treatment is common. I am trying to convince the client that he can't treat the vehicle as a company vehicle unless it is titled in the S Corp's name. Am I the only one that seems to think this is a problem or do most of you not allow clients to do this? Thanks.
  13. As usual, they heard it from a friend whose tax preparer lets them claim the value of their baby's photo, etc. - what they say it's worth. So I had to be the bad guy and tell my client no. Thanks for your help.
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