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About David

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    ATXaholics Anonymous

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  1. So are both of these numbers shown on the K-1 and result in no tax impact? Is this because there have always been rental loss carryforwards and because a distribution was able to be made only because depreciation isn't a cash impact? So the distribution isn't considered from principal? Thanks.
  2. The only activity in a client's complex trust is a rental property. There have only been rental loss carryforwards reported each year. In 2019 both beneficiaries took distributions totaling $5K. The only reason they are able to take distributions is because of depreciation deductions through the years. In 2019 the trust is reporting $5K rental loss, $10K depreciation and, with the current year $5K rental loss, the total loss carryforward is $35K. My question is how should the K-1 report the distributions? Shouldn't the K-1 report $2,500 to each beneficiary in box 9 as depreciation de
  3. David

    EIN Issue

    Thanks for helping with this mess.
  4. 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.
  5. 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 busine
  6. 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
  7. I meant to say "Liabilities don't exceed assets..."
  8. 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.
  9. 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 shee
  10. 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.
  11. 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.
  12. 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
  13. Thanks, guys. You've confirmed that I'm not to unreasonable in these situations.
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