jrjames

Thanks for your reply. The new partner has an equity ownership of 30%. There was no past work performed. The intent of the parties was for the new partner to perform services for the equity acquired although there is no written agreement.

There is a 50/50 partenrship AB and before the addition of Partner C the equity was: Partner A: 20,000 Partner B 20,000 Partner C was given a 30% share with no money put in and now it is Parnter A 50% Parnter B 20% Partner C 30% Questions: 1. Should partner C recognize income of 12,000 and if so how would it be reported and on what form and is it subject to SE tax 2. If partner C recognizes income does she now have basis in the partnership 3. If partner C recognizes income would partner B recognize loss or an expense and how and on what form would it be reported. Thanks for considering my questions.

I know that a partnerhsip that is owned by a husband ad wife can file as a sole proprietor. This seems to have several advantages including no balance sheet or basis caculations as well as the ability of home office deduction and a better way to deduct business mileage. Does anyone know any disadvantages. Particularly if filing as a sole proprietor is it required to file two schedule C's or just two SE's?

I have a partnership who made a profit but also had a section 1231 loss on sale of company assets. When the section 1231 losses flow to the partners individual returns the amount is not subtracted from amount subject self employment tax. Am I doing something wrong or do section 1231 losses not reduce ordinary income from the same partnership for self employment purposes. Thanks

I am using ATX to prepare both a 2007 partnership and an individual return. The partnership has zero income because of a 179 deduction. The K-1 however shows ordinary income 12,500 on line one. Line twelve 179 deduction shows 12,500 and line 14 self employment also shows 12,500. Can this be right? When I transfer it over to his personal return he has no income and no federal income tax but 1,500 in self employemnt tax. Is 179 not deductible for self employemnt tax purposes? Thanks for your help.

I have purchased ATX software 2002-2007. Recently I needed to complete a 2004 return, but had lost my disc and it was no longer on my computer. I called ATX thinking they might replace what I had previouly bought. They wanted to charge $100. I call that greed. Just wanted everyone to know that is considering whether to renew

I have a real estate agent who also invests in real estate. She is a general partner with two other partners and has invested in three pieces of raw land. For the last two years the partnership return has been prepared showing a partnership loss because of interest and other expenses such as office supplies. Question 1: If this is an investment company should not the interest expense be reported on th 3rd page of the partnership return and therefore carried forward to the partners as investment interest only to be dedcuted when the partner has investment income. Likewise the other investment expenses(office supplies etc.) shouldn't they be carried to the partners schedule A. She has sold an unrelated piece of raw land this year that she held for more than one year. If I amended the partnership returns could I not use her portion of the investment interest for the past two years on the partnership return as an offset for the investment caital gain on this other land sale? She also has puchased other raw land for investment but has placed a manufactured home on two of the lots and done landscaping and utilities hookup but has not sold these houses in two years. During that time she has reported a loss on schedule C for the manufactured homes from expenses such as maintenance, supplies. licenses, taxes etc. She has not reported any interest expense nor the landscape or utility hookup expenses. She expects to claim long term capital gain on these homes when sold and add the interest and lot improvement costs to the basis of the home Question 2: Isn't she mixing parts of the tax law concerning dealer and investor to suite her own purpose. She seems to be reporting as a dealer by using Schedule C, but is not reporting interest. It is my understanding that a dealer should report interest after the production period as a current expense. It seems to me it would be more simple to keep her reporting as a dealer for the manufactured homes but amend the returns to report the interest and capitalize the lot improvement costs. Of course this would not allow capital gain treatment if sold. She is thinking about coverting them to rental property if they don't sell soon. Would this solve our problem concering capital gain treatment if she keeps them as rental property for more than a year? I know these are long questions but any thoughts or suggestions would be appreciated.