BulldogTom

26 minutes ago, kathyc2 said:

Would it make a difference if the rent is cash rent or shared revenue/expense rent for the depreciation?

Be careful that your client is not getting into a partnership with their renter.   If they are sharing income and expenses, it sounds a lot like your client is putting in land and the "renter" is putting in labor to produce a crop that each will then share the profits from.   That looks a lot like a partnership.   If that is what they are wanting to do, that is fine, but there are tax/legal implications to consider.

Tom
Longview, TX

16 minutes ago, kathyc2 said:

I have a client that will be inheriting farm land with a pivot irrigation system.  They are planning on keeping and renting out the farm land.  Some quick research shows that land with the irrigation is valued at about 4 times more than non-irrigated. There are no buildings on the land, so only item for depreciation would be irrigation.

I'm thinking the irrigation value could be deprecated over 15 years?

Would the valuation when they get it need to show the breakdown between just the land and the irrigation system?

Would it make a difference if the rent is cash rent or shared revenue/expense rent for the depreciation?

The estate should have an appraised value for the property at DOD, and if you are lucky, it will break out the land from the improvements.   If the estate did not do an appraisal, or if they did but did not break out the irrigation improvements, then it would be best practice for your clients to have an appraisal done when they get the property.   If they have to get an appraisal done, it would be a good idea to show the appraiser the valuation at DOD so everything matches up.   I believe the irrigation improvements will be 15 year property, but watch for anything that can be segregated out that is less than 15 year property.   There may not be any, but you could potentially accelerate some of the assets if they are a different class.

Tom
Longview, TX

Another Random Thought....these fractional CFO companies may have to be included on the reports as CFO's are explicitly included in the section on persons having significant control over the company.   And the "catch all" provision states that the work you do is determinative of the requirements for reporting, not the title.   So a CFO cannot have their title changed to "Finance Manager" just to escape the reporting requirements.

I wonder when FinCEN is going to start auditing the reports, if they ever do?

Tom
Longview, TX

On 9/1/2023 at 9:26 AM, cbslee said:

"A “Reporting Company” is a domestic or foreign corporation, limited liability company, or similar entity that was either formed or registered to do business in any state or jurisdiction by filing a document with a secretary of state or other similar office and which does not qualify for an exemption. " (There are 23 exemptions)

Depending on how this is interpreted, it could include any entity with an "Assumed Business Name" registration with any state.

Including Schedule C, E and F without ABNs appears somewhat unlikely.

"We will see what happens"

I agree that the plain reading of the guide seems to exclude C&Fs.   It appears that the trigger for most of our clients is a formation document filed with the SOS of the state in which they are formed.  

Just a random thought, companies that form after 1/1/24 have to include the "applicant".   Lawyers and Public Accounting Firms who set up these entities are going to have to be included on the report as the "applicant"?   But Law Firms and Public Accounting Firms are exempted from the reporting requirements.  I wonder how that is going to play out?

Tom
Longview, TX

On 9/18/2023 at 9:48 PM, cbslee said:

FINCEN just released an updated Small Business Compliance Guide:

https://www.fincen.gov/sites/default/files/shared/BOI_Small_Compliance_Guide_FINAL_Sept_508C.pdf

 

I downloaded the guide and it is pretty well written for a government document.   Cleared a lot of my questions up.   Notice that there is a "Catch All" for each class of reportable persons...very slippery when a $500 per day penalty is on the line.

I sent a .pdf copy to all my clients who have LLCs, Corps & Partnerships.   Told them I can't do the reporting for them but as a courtesy I was providing the guide to let them know about their requirements.

Tom
Longview, TX

Love that song.

Tom
Longview, TX

Wow....they finally put their foot down.   I applaud them.

Wait for the news to find 2 or 3 people who are legitimately claiming the credit and now have to wait months to get the funds.  They will start crying on TV that their business will be shut down if they don't get the money and in an election year, no politician wants voters crying on TV that their business is closing because of the IRS.

Just my cynical take on the situation.

Tom
Longview, TX

40 minutes ago, Catherine said:

"Uhhh, that would be a great big negatory, good buddy." (Don't even recall where that silly quote comes from!)

Smokey and the Bandit?

Tom
Longview, TX

I don't think so.   It is not listed in the instructions for the form for types of income to include in investment income.

Tom
Longview, TX

I remember something about them, but I am not going to show my ignorance by telling you what I think I know.   Can someone explain to me in 4-5 sentences what a QSUB is and how it is taxed and its relationship to the parent and the parent's taxation.   I plan to read up on this when I get some time, but I don't have a lot of time right now.

Thanks

Tom
Longview, TX

Catherine,

I think the TP would have CA source income and required to file a 540NR.   Where are you showing him domiciled during that period?   You may be able to wipe a big portion of the income from CA because if he was "traveling for business at a temporary worksite" and returned to his domicile, he can take, for CA purposes, the unreimbursed travel expenses (Air BnB, meals, transportation, etc).   CA never conformed to the 2017 tax law changes related to unreimbursed employee expenses.

Take a look at how he was paid.   If any portion was considered a scholarship, it would be excluded to the extent of tuition, fees and materials.

Tom
Longview, TX

45 minutes ago, Lion EA said:

And, excited to meet you in person,

Make sure to keep your eyes down or you will look right over the top of her......

Love ya @Catherine but you are short!

Tom
Longview, TX

I am just the opposite, I have noticed in the last month fewer spam robocalls.    Less than a dozen in the last month....used to be a couple a day every day.

But the election season is coming up so it will be ramping up again.

Tom
Longview, TX

20 minutes ago, Lion EA said:

They can export both "company's" subcontractors' info to Excel and then add...

That is what I am thinking.    I can export to excel, combine duplicates and import into something that will prepare the 1099s from a .csv file.   

I found something online called Track1099 by Avalara that seems like it will do the trick.   $2.99 per form for the first 15, $2.19 for the next 150 forms.   All versions of 1099s.  I just watched their promo video on how to do the import.    Seems straightforward enough.

Anyone ever use this Avalara product?

Tom
Longview, TX

5 minutes ago, Lion EA said:

If they used classes in QB, then they could generate one report for things like subcontractors but still have run separate P&Ls for decision-making issues or whatever their need is.

I know.   But that ain't what happened.   At least I am not dealing with this in January.....

Tom
Longview, TX

Long story, not enough space to tell the whole thing.  This is just 1 of the headaches.

Taxpayer has split his business into 2 separate companies in QBO, but they are still actually both 1 company under 1 EIN.   They have common Subcontractors.   To file their 1099s, they will need to export the data from both QBO copies, combine, and import into a 1099 software package to print and efile the forms.

Any recommendations for a package that will allow upload of a .csv or excel spreadsheet so the staff does not have to enter each payee individually?

Thanks in advance.

Tom
Longview, TX

@Sara EA that comment was made with a lot of sarcasm, I was taking a jab at cbslee.   You have to go to the other thread where he was defending the IRS for backdating material to get what I was doing on this thread.   To his credit, he apologized for the comments on the other thread.

Tom
Longview, TX

On 8/25/2023 at 10:24 PM, cbslee said:

All of their money, lobbying influence and political contributions will protect them.

There will be a negotiated settlement and the class action attorneys will get a very big payday.

Don't you find it troubling that one little mistake by HRB is being used as a broad brush to paint the entire company?   I would think you wouldn't appreciate that.   Or is it only the IRS that gets a pass from you when they do unethical things?

Tom
Longview, TX

On 8/26/2023 at 11:53 AM, cbslee said:

To take one difficult area of tax law and apply that to the whole agency is an exaggeration which may make you feel good 

but frankly I don't appreciate it.

 

cbslee is easily offended when you question the ethics of the IRS, but if they ever have a data breach, he will be posting about it for weeks.  

Tom
Longview, TX

I consider myself a Management Accountant.  I love putting processes and procedures into place so the owners and management get their KPIs reported timely and accurately so they can be acted upon before there no chance to change the operational outcome.   

The GAAP and Tax Reporting are important, but profits and cash flow rule the business world.   

Tom
Longview, TX

6 hours ago, kathyc2 said:

For the most part, I've always been happy with interactions with IRS employees.  I find them much more helpful than companies that send your calls to India. I hung up on a call to Comcast recently as the language barrier was too much for them to even understand what I was asking. 

Back in the day, when the PPL was fully staffed, I used to get great service from the IRS employees.   They would listen, tell you what they could and could not due, and what the next steps would be to resolve the taxpayer's issue.   Many times, they would be able to take a faxed document and close the issue over the phone.   It has been a minute since that happened....

Tom
Longview, TX

What a sad state of affairs when a government employee doing their job is something we take notice of because it is so unusual...

Tom
Longview, TX

19 minutes ago, cbslee said:

After I uploaded my response I received the following acknowledgement:

"Your documents have been successfully uploaded. You may be contacted at a future date regarding your response.

The current time is: Wed Aug 09 2023 13:21:48 GMT-0700 (Pacific Daylight Time)"

Did you have to register or go through IDme to do the upload?

Tom
Longview, TX

@jklcpa  No, I don't think I have to make an adjustment for what did not happen just because it could have.   If I did, I would have to recompute every return between 2008 and 2021 to determine the tax effect and bring every one of those adjustments into 2022.   I don't think the Rev Procedures and Regulations prescribe that intense of an analysis.   I think the intent is to take the adjustment for the item in a vacuum in the year you file the 3115.

Anyone disagree?   I am not sure, but I hope I am right because I don't have enough summer left to complete this return if I have to re-do every return.

Tom 
Longview, TX

24 minutes ago, jklcpa said:

Tom, obviously one goal is that, at the end of all calculations and current year's depreciation, that the accumulated depreciation and NBV of the assets are correct, and . . .

the second is that any PAL carryforward reflects the actual amount as if everything had been reported properly in the first place.  Hope someone will chime in if my reasoning is incorrect on this part, but I believe that it may be necessary to make some adjustment to the PAL for any years where the taxpayer may have been allowed the special $25K allowance if the MAGI was under $150K on a joint return, or half those amounts on MFS returns.  Were there any years where that may have been the case?

Another 2 thoughts - AMT calculations, and I hope you are getting a healthy retainer for this work.

Yeah, I keep getting this nagging feeling that I need to see the detail for every return from 2008....

Tom 
Longview, TX