Abby Normal Posted July 15, 2016 Report Share Posted July 15, 2016 http://www.journalofaccountancy.com/issues/2016/jul/infrequent-sale-not-subject-to-self-employment-tax.html First off, sounds like to me the bankruptcy trustee really screwed up if he valued 300k of scrap steel at zero. And I suppose after bankruptcy the basis in the steel was zero? I really think this could have gone either way. 1 Quote Link to comment Share on other sites More sharing options...
Elrod Posted July 15, 2016 Report Share Posted July 15, 2016 That's a real toughy one....but as you said...agree... could have gone either way. ... 1 Quote Link to comment Share on other sites More sharing options...
JohnH Posted July 15, 2016 Report Share Posted July 15, 2016 I think the taxpayer got VERY lucky on this one. I'm glad for him, but I'd have never predicted that outcome. Certainly wouldn't suggest it to anyone as a course of action. 1 Quote Link to comment Share on other sites More sharing options...
mircpa Posted July 15, 2016 Report Share Posted July 15, 2016 I agree with court decision. Taxpayer passed majority of tests for inventory not being held for resale & not part of trade or business and it was one time event. 2 Quote Link to comment Share on other sites More sharing options...
RitaB Posted July 15, 2016 Report Share Posted July 15, 2016 He sold scrap 12 - 24 times a year for seven years. Averaged $45k a year. That was his only income. I think he's a lucky dog, too. 1 Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted July 15, 2016 Author Report Share Posted July 15, 2016 Fortunately, it's a very rare circumstance to have a lot of zero basis inventory left over after a business is closed. Most of the time you'd be selling at a loss. Quote Link to comment Share on other sites More sharing options...
Max W Posted July 15, 2016 Report Share Posted July 15, 2016 Based on the courts analysis, it is the only decision that could have been reached. Three factors positive; 5 neutral; 0 negative. Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted July 15, 2016 Author Report Share Posted July 15, 2016 10 minutes ago, Max W said: Based on the courts analysis, it is the only decision that could have been reached. Three factors positive; 5 neutral; 0 negative. Yes, but all of those analysis are quite subjective. A different court could well have reached a different conclusion. 1 Quote Link to comment Share on other sites More sharing options...
Max W Posted July 18, 2016 Report Share Posted July 18, 2016 That goes without saying. Different judges could come up with different analyses. My comment was on this court's decision. Quote Link to comment Share on other sites More sharing options...
Roberts Posted July 20, 2016 Report Share Posted July 20, 2016 I'd call it schedule D, sale of assets. 2 Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted July 20, 2016 Author Report Share Posted July 20, 2016 11 minutes ago, Roberts said: I'd call it schedule D, sale of assets. Hmmm. I like that thought! Quote Link to comment Share on other sites More sharing options...
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