OldJack

So it's alright to submit and swearer it's correct just because its only incorrect by $1 dollar? Would you do the same if it was just $1 million? If not what is the difference? It's alright to lie in 2012?

What's wrong with paper filing?

Schedule L should always be filled out and filed with the tax return for several reasons regardless of requirement. 1. It shows there is proper bookkeeping for the business and maybe less likely for audit. 2. It shows full information to the members. 3. It makes you look like you know what you are doing. If you don't do a balance sheet how would you know income and expense is correct? 4. It shows you have done proper accounting/tax prep of income and expense... as errors would be obvious on the balance sheet if you didn't do a correct balance sheet. 5. It shows you are a professional and not just some preparer that doesn't know anything about business accounting.

Properly documented loans direct from a shareholder increases shareholder's tax basis only for purposes of deducting an operating loss.

>>If it says IRA, that is not your client.<< Hee Hee, I like your answer!!

>>Can I just deduct it on the Schedule E for the new rental<< I would think that you can under the tracing rules.

There is an IRS chart "Annual Lease Value Table" in Pub 15B to calculate personal use of a company owned vehicle and add amount to "Guaranteed payment to partner".

Well, while employee business debt is on Sch-A, that is true, this may depend upon the facts. If this loan was not for keeping his employment it may have been a simple investment which would not be on Sch-A. If it is a business bad debt it could be deducted on form 4797 part 2 or if it is a non-business bad debt it could be deducted on 1040 Sch-D. You have to establish the facts.

Withdrawal of the vehicle from a business other than a corp is tax free until the asset is disposed of. A trade of the vehicle is not disposition and is a tax-free exchange (1031) with the new vehicle taking the tax attributes (basis) of the traded vehicle. The new vehicle tax basis is the tax basis of the traded vehicle plus any additional cost of the new vehicle such as down payment plus financing cost. There is no depreciation recapture at trade time. I usually report the traded vehicle at no gain on form 4797 only to account for the vehicle deleted from the depreciation schedule.

>>But that's what he agreed to take for it in trade, so that's what it sold for. << He actually didn't sell it, he traded it!!

>>the dealer would be getting less than the new vehicle is worth and that just doesn't happen. << Having worked many years as a business manager of a new car auto dealer, and many years as a CPA auditor of dealerships over a 3 state area, I can say the dealer always gets exactly what he wants for his new vehicle or he would not trade. The trade-in figure in the deal is a plug figure and usually not realistic as to the value of the trade-in vehicle.

>>Question 1: Would you use the trade value as a sales value for the 4797?<<!! NO!!! Trade value is a plug figure to sell the new vehicle. Use FMV as shown in a blue book type publication.

Remember, a 1041 is nothing more than a 1040 for the deceased. So all "taxable" transactions before death are on 1040 and ALL "taxable" transactions after death are on the 1041 which usually you flow through to the 1040 of beneficiaries by the 1041-k1. You would prepare both tax returns for the year 2011.

Many times I just delete the form 1116 and the proper amount shows up on 1040 page 2.

Since the house was "sold" to son on an installment note, father is not gifting a house he is gifting the remainder owed on the installment note. Father has already recognized gain, up to gift date, on the note and now gifts the balance on the gift tax return which calculates gift tax that will never be paid unless fathers estate is in excess of allowed amount at his death. :)

>>"transfer on death"<< I don't think you mentioned that fact in your other posts. If that is the case, then the broker should have issued a 1099B to the estate for prior to DOD and to the beneficiary for later transactions.

Maybe I don't understand.... But it appears to me that the broker "account" belongs to the "estate" of the deceased until it is transferred/changed to a beneficiary. Therefore all these transactions would be accountable on a 1041 making the 1099B correct? I don't see a nominee here.

Well... is it a good idea to elect S-corp status? If the C-corp has not been profitable what about any NOL loss carryovers that would be suspended with the S-election? What about the fact that you have to deal with an asset FMV appraisal and Built-In-Gains (Big Tax every time an asset is sold) ? What tax effect is there on all shareholders? Officer Salary is not required for a C-corp. Did the shareholders take into consideration the current max tax on dividends verses ordinary income and what future tax rates may be? Sure there may be double tax if profit is not controlled. And there are many other factors to consider. Maybe you are lucky the IRS rejected the 1120S and 2553?

>>nominee info on the wife's 1040 with the same phrasing OldJack used<< Since this is a small amount of tax, that might be the simplest way even if it is incorrect.

The question must be did the son actually accept the gift and do things that an owner would do? If not there was no completed gift and son could claim step in basis on inheritance. The fact that she retained a life estate is not the point if son was not aware of the deed and life estate.

My prayers are for you and Don.

No deduction as the difference was his cost of life insurance which is not deductible.

Funny of the day. A little boy was sitting on the footpath with a bottle of Turpentine... He was shaking it up and watching all the bubbles. A Priest came along and asked the little boy what he had. The little boy said, 'This is the most powerful liquid in the world; it's called Turpentine'. The Priest said, 'No, the most powerful liquid in the world is Holy Water. If you rub it on a pregnant woman's belly, she'll pass a healthy baby.’ The little boy replied, 'If you rub turpentine on a cat's aXX, he'll pass a Harley Davidson.'

Sure, attached to the 1041 a sch-B and after the name of the payer comment of Bank of XX, nominee "husband name" 1099INT and SS# or something like that.

You have to read the trust documents! Trusts usually have the option to pay any tax that is due on the 1041 or pass the net income on a k1 to the beneficiaries for them to add to their 1040 and pay taxes on the income. You don't do both. A distribution is taken into consideration on the 1041 if the trust is paying the tax. If the trust paid accountant and attorney fees it is deductible on page 1 of the trust 1041.