cred65 Posted February 17, 2009 Report Share Posted February 17, 2009 Upon checking with a BMW dealership at that time he is informed that the FMV is only $34K - $35K (softtop sports coupe). He plans to sell the car in late spring 2009. The $52K causes $28K in SS income to be taxable, which creates $15K in additional fed & state taxes. Has anyone else had a similar scenaro and is there any relief afforded to the TP? TIA Quote Link to comment Share on other sites More sharing options...
schirallicpa Posted February 17, 2009 Report Share Posted February 17, 2009 At best he needs to check with the issuer of the 1099 to contest the FMV. Otherwise, it's the classic case of "you should have contacted your accountant earlier." Quote Link to comment Share on other sites More sharing options...
jainen Posted February 17, 2009 Report Share Posted February 17, 2009 >>check with the issuer of the 1099<< If he is getting that car from anyone other than a dealer, it is a "previously-owned" vehicle. He likely won't get the 1099 changed, so he is going to have to disclose that he is using a different figure backed up by reasonable documentation. Quote Link to comment Share on other sites More sharing options...
JohnH Posted February 17, 2009 Report Share Posted February 17, 2009 Seems like he would be willing to invest some bucks in paying you to do the research to justify a lower FMV, if he's smart about it. With $15K in taxes on the line, a couple of thousand spent to document a lower value would seem to be a wise investment. On the other hand, if all he wants to do is just toss you the paperwork & say "handle it", then maybe he's stuck with the info on the 1099. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted February 17, 2009 Report Share Posted February 17, 2009 Have the client take the exact specs to the dealer, and get a written statement of what the dealer would pay him for it, at the time he won it. Use that to add an 'adjustment to reflect FMV' to the line 21 entries, down on the blue lines to reduce the 1099 amount. In other words, show the full 1099 amount, then 'adjust' it down. The law only requires him to report the FMV of any prize. Quote Link to comment Share on other sites More sharing options...
Daune/CA Posted February 18, 2009 Report Share Posted February 18, 2009 Have the client take the exact specs to the dealer, and get a written statement of what the dealer would pay him for it, at the time he won it. Use that to add an 'adjustment to reflect FMV' to the line 21 entries, down on the blue lines to reduce the 1099 amount. In other words, show the full 1099 amount, then 'adjust' it down. The law only requires him to report the FMV of any prize. Just a thought-would it not be the price that the dealer would sell it for on that date, and not what the dealer would pay him for it (wholesale price usually)? Quote Link to comment Share on other sites More sharing options...
Lloyd Hudson Posted February 18, 2009 Report Share Posted February 18, 2009 Just a thought-would it not be the price that the dealer would sell it for on that date, and not what the dealer would pay him for it (wholesale price usually)?I did the adjustment on a corvette once, documented with current newspaper ads. Never heard a peep form the IRS. Quote Link to comment Share on other sites More sharing options...
taxguy057 Posted February 18, 2009 Report Share Posted February 18, 2009 Put some good insurance on it and let it mysteriously get totaled and collect a check, and pay the taxes! LOL! JUST KIDDING YOU GUYS!! But i couldnt resist injecting some humor cuz it sounds like that TP gonna need some by Apr 15th! By the way what series is it? I have a 7 series and love it!! Well worth keeping for 15k Lol! Quote Link to comment Share on other sites More sharing options...
michaelmars Posted February 18, 2009 Report Share Posted February 18, 2009 the gov gets about 20% depending on tax bracket, so mail them the tires a fender and one seat. done taxes paid Quote Link to comment Share on other sites More sharing options...
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