Lion EA

NOT putting real estate into any type of corporation will avoid a nasty tax surprise as he sells properties. Hope he has a real good insurance policy. Depending on state law, he might have some liability protection with each property in its own LLC. He'd have to treat each property separately and not act as if the properties are his own personal checking accounts. And, he still wants good insurance coverage. Certainly look to see if he qualifies as a real estate professional, especially with that many properties.

A very :bday:

That's going to depend on state law. In CT, I cannot violate any terms of my divorce decree without risking consequences no matter how many violations my ex has. Anything my ex does or does not do does not let me off the hook. The decree is quite clear re still standing even if a section or more is violated. The IRS does not care. But, my ex might. I've seen ex-spouses sitting in jail with too much time on their hands take their exes to court re real or imagined violations of divorce decrees. Very costly by the time you hire a lawyer, take time off work, hire babysitters, etc.

Well, the IRS claims to be above state law, so it will rely on its own definitions of dependency. If minor children live with the mother and meet all tests of dependency, they are dependents of the mother for IRS purposes. That said, your client does have to abide by her divorce decree and state law. If she is supposed to sign the dependency over to her ex for one child but the ex does not request Form 8332 for this year due to no need for an extra exemption, then your client can decide to claim both children. The IRS does not care who supports the children as long as a child does not provide more than half his/her own support. Explain the rules to your client and let her make the decision. You don't want to be responsible for her ending up in court.

Thanks. Good point. Now, I'm definitely calling the Hotline

IRS letter suggested RP 2003-43 as a relief, requiring 1.) Form 2553 with signatures from everyone 2.) statement of reasonable cause, blah, blah 3.) statement from all shareholders attesting that they reported income, etc. 4.) declaration by officer under penalties of perjury, etc. all of which I'll draw up for client. Anyone have any good boilerplate paragraphs you've used successfully? Just really mad at the lawyer who insisted company form an S-corporation to the (former LLC) partners and to me and then did not fill out the final form needed to actually BE an S-corporation. I was suggesting a C-corporation to the lawyer so the $25,000+ health insurance could be a fringe benefit instead of reported on their W-2s (and they could have a broader range of future investors and they could have more than one class of stock and...), but the lawyer insisted he should form an S-corporation for them. Lawyer had plenty of opportunities to tell me that he was NOT going to file Form 2553 and that someone else would need to do that piece of the package.

BUMP Client said his lawyer formed an S-Corp for them effective 1 January 2008. I prepared Form 1120-S. IRS writes that they cannot process Form 1120-S because no Form 2553 was filed. Husband and wife shareholders did receive their K-1s and did report K-1 information on their joint personal tax return for 2008. Do I use Revenue Procedure 2007-62 for an entity that has not yet filed a tax return -- they mailed it in, but the IRS did not process it? Or, Revenue Procedure 2003-43? Any tips on what to include? By the way, I'm definitely blaming the lawyer!

Client said his lawyer formed an S-Corp for them effective 1 January 2008. I prepared Form 1120-S. IRS writes that they cannot process Form 1120-S because no Form 2553 was filed. Husband and wife shareholders did receive their K-1s and did report K-1 information on their joint personal tax return for 2008. Do I use Revenue Procedure 2007-62 for an entity that has not yet filed a tax return -- they mailed it in, but the IRS did not process it? Or, Revenue Procedure 2003-43? Any tips on what to include? By the way, I'm definitely blaming the lawyer!

I tried searching on this and variations of it and of Form 2553 but get thousands of posts containing "late" or another part of the phrase. Does someone remember a thread regarding a late election, maybe one you took part in and could search by posting name? Thanks for any leads.

Unique! And, a beautiful couple.

Thank you, Eric.

Jainen explained what I meant but did not explain. All the increases and decreases to the basis of the old house and resulting deferred capital gain are now part of the basis of the newer house. You don't need to send the client looking for capital improvements made to his former house; he did that the last time he sold.

Great idea, Tom. I'll second that.

Snopes e-newsletter this morning covered protecting your data if your computer is lost, stolen, or given away. Of course, you can make more severe changes if you're giving it away, so the smash-the-hard-drive-with-a-sledgehammer method was the number one suggestion. If your computer was stolen, it's too late for the sledgehammer, though.

Wouldn't the type of basis adjustments that a client would find for you have already been included in the gain he postponed?

It emerged from bankruptcy during 2004, at which time the old stock was worthless and the old bondholders received pennies on the dollar. Maybe try Verizon investor relations for more information.

Here's a good starting point on the IRS site: http://www.irs.gov/newsroom/article/0,,id=....html?portlet=7

Aren't they organized with their state? File an amendment changing the name with the state. Take the state acceptance of the filing to the bank.

I've been off ATX for a couple of years, but until someone more knowledgeable jumps in... Does ATX have a code to input for wash sales that'll automatically put in the corresponding line backing out each disallowed loss?

They haven't owned a principal residence anyplace in the world in the last three years, per your scenario. If they qualify for all other issues re FTHB credit, why would rental property enter into the equation?

I'd vote for that guy!

My web site has a FileShare button. My clients choose their own passwords which I do NOT know. I can leave a file for only them to see; they can leave files for only me. (I can also leave files for all my clients to see, such as our Engagement Letter, but that's another topic. Clients can NOT leave files for anyone else but me.) I have to accept the client as a user of this feature of my web site.

A very :bday:

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A very :bday: