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David

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About David

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    ATXaholics Anonymous
  • Birthday June 15

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  1. Clients are wanting to do a 1031 exchange on property they own and identify property to purchase with their adult children. I know the name on the new property has to be the same name on the new property. However, it isn't clear if, as long as the name on the old property is on the new property, that other names can be included as well. Can this be done as long as their portion of the purchase price of the new property is greater than the cost of their current property? I wanted to check before I tell these clients that they can't use the 1031 exchange to purchase a property with their kids. Thanks.
  2. David

    Undo S Corp Election

    The client previously operated her business as a sole proprietor. On 4/14/18 she registered the business as a SMLLC with the Secretary of State and applied for an EIN on the same day. She also filed F 2553 requesting to be taxed as a S Corp with an effective date of 4/14/18. So based on these facts does Judy's following answer apply? Therefore, the TP has until 6/28/18 to revoke the S election retroactively to 4/14/18? Thanks for your help.
  3. David

    Undo S Corp Election

    Or is the revocation deadline 6/15/18, which is the 15th of the third month of the taxable year with April being the first month even though the S election didn't begin until 4/14/18?
  4. David

    Undo S Corp Election

    The TP was filing as a sole proprietor and her previous CPA told her to become a S Corp and filed F 2553 with an effective date of 4/14/18. So does the TP have until 6/29/18 to undo the S election retroactive to the 4/14/18 effective date? The instructions say that a revocation has to be made by the 15th of the third month of the taxable year. That would seem to me that the S Corp taxable year is 4/14/18 - 12/31/18 and the TP can request revocation back to the 4/14 date. However, I know the tax regs aren't as straight forward as I would think. Thanks for your help.
  5. David

    Undo S Corp Election

    OK, I'm not getting any replies to my post that I attached to an older post with a similar issue. I guess that doesn't work to add to an older post? New client's previous CPA told her to file for S Corp election. She did so in April with an April 14, 2018 effective date. Now the client wants to undo the S election - to be treated as never having been an S Corp. She hasn't received her acceptance letter from the IRS yet. Client is a part time piano teacher and has 2 pianos, one for $50K which she took the sec 179 deduction. It appears from my research and the posts here that the S election can't be retroactively undone unless it is filed within 2 1/2 months of the tax year. Does the 2 1/2 month requirement apply from the 4/14/18 date of the S election effective date? The IRS explanations and cites aren't clear whether the 15th of the third month applies to a S Corp's short tax year or if it applies only to the calendar year. If so, does the first month start on 4/14, therefore, the revocation letter has to be mailed by 6/29? Or does the first month begin on April 1 therefore, the revocation letter has to be mailed by 6/15? I want to make sure that the revocation is effective retroactively to the election date so that no 1120S is required. Also, I don't want the client to pay taxes when she transfers the fully depreciated assets from an S Corp back to her SMLLC. Thanks for your help.
  6. David

    S Election Revocation

    This seems to apply to my client's situation - New client's previous CPA told her to file for S Corp election. She did so in April with an April effective date. Now the client wants to undo the S election - to be treated as never having been an S Corp. She hasn't received her acceptance letter from the IRS yet. Client is a part time piano teacher and has 2 pianos, one for $50K which she took the sec 179 deduction. It appears from my research and the posts here that the S election can't be retroactively undone unless it is filed within 2 1/2 months of the year. Does the 2 1/2 month requirement apply from the date of the S election effective date? I want to make sure that the revocation is effective retroactively to the election date so that no 1120S is required. Also, I don't want the client to pay taxes when she transfers the fully depreciated assets from an S Corp back to her SMLLC. Thanks for your help.
  7. Thank you for the information, Judy. I guess I was reading dwelling unit as the taxpayer had to live in the house in order to take the home office deduction. Unless I'm not reading 280(d) correctly, it appears that the client can take the home office deduction for the second home even though he lives in another house as his primary residence. Using the house to help others is considered personal use which qualifies for the home office deduction? Thanks again for your help.
  8. Sch C client purchased a second house which he uses to help people with addictions and other issues. He no longer rents office space but will be using the garage or some portion of his second house. Everything I read regarding the home office deduction appears to relate only to the business owner's primary residence. I can't find any regs or articles that address being able to take the home office deduction for space in a second house. Can this client take the home office deduction for space used in his second house? Or does the business need to pay the owner rent and a Sch E be prepared? Thanks for your help.
  9. That too. That's why I thought no sales needs to be reported. But since that is non taxable income, can the estate deduct the commission paid for the estate sale?
  10. Usually these are items that are not sold above their purchase price - furniture, cars, clothing, household items, etc. Is my thinking not correct on this?
  11. Are sales commissions paid for selling items at an estate sale deductible on form 1041? I'm thinking they may not be since the income from the sale is not taxable or reported on form 1041. However, it is an expense for the estate. I don't see this type of commission specifically mentioned in the instructions. Thanks.
  12. Business switched from a SMLLC to an S Corp effective 1/1/17. The client is planning to make a big profit sharing contribution later in the year. The intent was to file an extension by 3/15. I thought an extension had been filed for the new S Corp but it wasn't filed. I know it is possible to get relief for the late filing penalty but I can't find anywhere where there could be relief for paying the profit sharing after 3/15 if an extension wasn't filed. Has anyone dealt with this situation before or know knows if there is relief for the S Corp to pay the profit sharing later in the year when they intended to file an extension? Thanks.
  13. David

    Tax Prep Fees Paid After Final 1065 Filed

    Ok , that makes sense. I guess you can report UPE even if no K-1 is issued. Thanks for your help on this.
  14. I don't see anything in my research tools that indicate an LLC can report the tax prep fees for preparing a final 1065 when these fees, of course, won't be paid until after the final tax return date. It appears that the LLC members are out of luck as far as deducting their portion of the fee, Is this correct? Thanks.
  15. David

    S Corp Using PEO

    Thanks Judy for the link. A little scary since every company I know who uses a PEO thinks the PEO is liable. But back to my question as to how best to handle the officer's wages since no payroll reports are filed by the company - John's solution is similar to how I was planning to handle this - see my original post. Does anyone think that reporting officer's wages on line 7 of form 1120S will be a problem when there are no W-2s or employer reports filed by the company? Thanks.
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