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artp

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About artp

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    Advanced Member

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  • State
    IL
  1. Thanks for the reply. My client pays the real estate taxes, maintains out buildings for storage of equipment and pays property and liability insurance and consults with tenant regarding land usage-so ongoing profit motive. Payment arrangement is combination of flat cash amount per acre with potential bonus based on crop yield and other contingencies. Considering taking 199A and treating income as non SE.
  2. If farmer/landlord (who does not materially participate in the farm operation) has cash rent arrangement with tenant, it would appear that the activity does not rise to the level of a trade or business for purposes of Sec 199A deduction and the income would be reported on Sch E and not be subject to SE tax. Correct? If the arrangement is crop-share where the landlord does materially participate it would appear that the activity does rise to the level of a trade or business for purposes of Sec 199A deduction and the income would be reported on Sch F subject to SE tax. Correct? Is there an arrangement whereby the landlord could get the Sec 199A deduction but not have the income subject to SE tax? In other words, the activity and arrangement would qualify as a trade or business for purposes of 199A, but not rise to the level of material participation for purposes of SE tax?
  3. artp

    Penalty Relief?

    Taxpayer, married 2 children. Wife had family coverage through her employer Jan-Jun. Family moved in July when husband got new job-no medical coverage. Wife did not work after June 2017; stayed home to care for children. H&W got coverage thru Market Place Aug-Dec. Application for coverage to include children was re-routed to MO Medicaid. After 4 month delay they only gave taxpayer's one week deadline to provide additional documentation. Unfortunately, they were out of town and did not get the notice until time to reply had expired. Result-no coverage for the children from Jul-Dec. They finally did get full family coverage starting in Jan 2018. Any relief for penalty in 2017? art
  4. Employee excludes his 25 % share of medical insurance premiums under company qualified plan. He will be retiring later this year. Under company plan the employer will continue to pay 75% and the employee pays 25% after retirement. Employee wants to pay the balance of his entire share of this year's premium on a pre-tax basis. He also wants to pay all of his share of next years premiums on a pre-tax basis before he retires in 2017. I have never head of anyone trying to do this. Has anyone run across this before? Your thoughts? Art
  5. artp

    Clergy M&IE deduction

    Pastor makes several overseas missionary trips each year. He is a dual status taxpayer in that he receives a W-2 for his "wages" but pays SE tax on his earnings. Pastor's wages are reported in box 1 with no other entries on W-2 except for parsonage allowance in box 14. The church does not withhold FIT or pay in Medicare or SS. For SE tax he is allowed to deduct his 2106 expenses after applying the tax free % from clergy 1 worksheet.The church synod pays for the air fare and room accommodations only. He pays for everything else. My question concerns the use of State Dept M&IE allowance tables to substantiate these deductions much like the CONUS tables for travel in US. For example in he travels to India and the State Dept tables allow $90/day can he claim that without a paid receipt, just a daily log entry with the business purpose of missionary teaching/preaching? If so, then could he use those expenses (after applying the 50% limit) in computing his SE tax? Is my understanding correct? Art
  6. artp

    Self-employed with PTC

    After 2016 was filed taxpayer informs me he when out to the market place to get his insurance for 2016 rather than purchasing it privately as he had done in prior years and comes in with 1095-A. On the return as filed $4328 of SEHI was claimed. My fault for not asking beforehand. Anyway after completing the 8962 and calculating the repayment of $274 PTC he loses out on $4194 of SEHI deduction. Comparing 2015 and 2016 he actually winds up paying about $500 more for his insurance through the Market place (bronze level), pays back $274 of PTC and will owe about $494 of additional tax. Does this make sense?
  7. artp

    Rental property 1st year

    Ringers, If the rental property were not available till Jan 2017 would anything be deductible in 2016? Held over till 2017? or just plain lost? artp
  8. artp

    Rental property 1st year

    Taxpayer bought a house for rental property in Dec 2016 closing on 12/09/16 and took out mortgage receiving 1098 showing interest $216.18, Mortgage Insurance premiums $1972.25 and points $2130.38. She held it out for rent in 2016, but was no able to get a lease signed until Jan 2017. Occupancy will start 04/01/2017. Is any of this deductible in 2016 on Sch E? or Sch A ? or does she have to wait till 2017?
  9. Is there any way to get your password updated other the calling their 800#? I have been trying for 4 days and keep getting message that they can not respond and call back later. artp
  10. artp

    Geothermal Energy Credit

    Taxpayer is building a 50x50 ft. structure next to his existing residence. This structure will include a completely finished living abode-kitchen, bath, bedroom ect and will also service as a garage, workshop and storage area. The living abode will meet all codes requirements for a dwelling unit as he plans to use it as a residence for an elderly family member. If he decides to install a geothermal heating/cooling system in the structure will it qualify for 30% energy credit? My concern is that although the structure may meet the definition of “dwelling unit” he may not meet the test “used as a residence by the taxpayer”. I would welcome your input on this as I have never had this situation before.
  11. artp

    Basis question

    One further thought. Does the fact that the brother can not deduct the $18K loss ($30K-$12K=$18K) have any effect on Mom's basis that gets passed on to the son for that 50%? Is that $18K just lost out to everyone?
  12. artp

    Basis question

    Thanks for the reply. There were no improvements made.
  13. artp

    Basis question

    Taxpayer (son) sold investment real estate acquired by gift (quit claimed deed) from Mom. Sales price to unrelated party was $60,000. Mom inherited 50% interest in the property from her father. The other 50% went to Mom’s brother. Property was valued at $66,000 in the estate. Several years later when value was depressed Mom bought her brother’s 50% interest for $12,000. Question: What is son’s basis in the property? Does he get date of death value for 50% interest that his mother purchased from her brother or is that 50% based on the $12,000 that she paid?
  14. In 2013 taxpayer agrees to purchase a small tract of ground FMV $35,000. He gives the seller $15,000 in cash and he agrees to do excavating work for the seller (on an unrelated project) as payment for the balance of the purchase price. Taxpayer personally owns the excavating equipment that he uses on his farm. He is not a contractor and does not do excavating work as a business. Taxpayer should have reported $20,000 of barter income in 2012, Correct? If so, would he then have a tax basis in the property of $35,000? If he sells the property 2015 for $55,000 he would report a capital gain of $20,000 assuming the property was held for investment. Correct? Problem: If taxpayer did not report the gain in 2013 and refuses to amend the return how do you report the sale in 2015? I would appreciate feedback on this as I not sure how to handle this. Thanks, Art
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