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Long-time TaxAlmanac member

Hi, I see you've been a member of TaxAlmanac since November 2006 - welcome back!

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Trillium 16:45, 4 June 2009 (CDT)

form 8865

Thank you for your reply I have looked at Reg Sec.301.7701-2 (b) which states what a corporation is. It specically says under #8 certain foreign entities and under Costa Rica it says (Sociedad Anomima) That was basis of not believing this entity was not a foreign corporation

Your cite I presume is this: Section 301.7701-3(b)(2) provides generally that, in the absence of an election otherwise, a foreign eligible entity is (a) a partnership if it has two or more owners and at least one owner does not have limited liability, (b) an association if all its owners have limited liability, or (c) disregarded as an entity separate from its owner if it has a single owner that does not have limited liability.

Does this mean I need to determine if any of owners have only limited liability to see if it is corporation. If so Do I file a 5471 or are you saying I can file a form 8832 even at this late date and elect to treat as partnership?

Also if we file 8865s are they attached only to one partner's personal return (I would attach to amended 2006 and 2007)

Your help

Chris, thanks for all your patient help on my pship issues. I, like JR1, much prefer and better understand S corps and would opt to never work with partnerships. I've had two incredibly challenging ones already this season and hope that I've seen the worst. I've researched, studied and read enough to be comfortable preparing most 1065s and the ones I usually work with. But I know what I don't know and will do research and ask questions until I know that what I prepare I can sign my name to. Thanks again and have a great 2011!LJACPA 09:09, 12 February 2011 (UTC)

Oh look. In the back of the class. Somebody's got his hand up...

Hey Professor Chris! If you're gonna be giving exams on TaxAlmanac you'll have to answer some of the students' typically whiny and inane - but sometimes really really tough - questions about the exam question. Like this one:

You wrote in the exam question that because the taxpayer's principal place of business is his home, all business-related driving to and from his home/home office is deductible.

Can you support that? Can you give us a working definition of "business-related driving"?

It sounds to me like preparer-wishful-thinking-on-behalf-of-many-of-his-clients...

The sun is approaching the yardarm.

Harry Boscoe 17:48, 12 February 2011 (UTC)

I moved all of those off-point comments

to a whole new discussion on OICs since we were all off-track from the original discussion. I hope you don't mind. Kevinh5

Thank you for the various options. I didn't I could deduct as S/E on the 1040. That won't cause the individual any audit issues? Thanks.

your answer to excess HSA contribution question

Hi, just wanted to comment to you personally that your explanation/description was so clear and well-worded that I am re-reading it again and again (to use as my explanation to others, with your permission). I am not the person who asked the question, just reading the new topics. I teach some basic tax classes and people often ask me if I'm a teacher because I am able to explain things in "down to earth" language that invites listening and learning. Do you teach any tax classes? Just curious.

Thank time to teach classes, but maybe someday. The tax law becomes more clear when the theory is first understood.

The "principal shall be paid first" note...

Chris: I'm dithering now with my pretty strong post earlier about "what the borrower and lender bind themselves to is what happens." I remember where I was when I researched this issue almost to the point of going blind, and it was certainly - as I remember it - before the imputed interest/OID rules. [When did they get invented anyway?]

Is it possible that Congress actually gave IRS the power - by invoking the imputed interest rules - to override what "the binding contract" between borrower and lender says as to when the interest will be paid?

Yes, I might be geezing, and remembering the distant past more than the recent past, but I clearly remember writing the "memo to file" that supported the parties to the loan being able to structure the payment of P and I as they pleased just as long as the documentation was strong enough to bind them to it.

I betcha you're working on Saturday; at least I hope you are. You better be!!

Harry Boscoe

Baily decision

Ckenefick, thanks for your posts on my question regarding the NC client who received a lump sum from his TSP. I presume you're in NC and have some personal experience in this area of the NCDOR tax code. You stated pretty quickly and definitively twice that the distribution is 100% tax free if it qualifies under the Bailey decision. However, looks to me like it only qualifies for the exemption if the taxpayer is vested as of August 1989. Meaning someone would have had to work there 20 + years in order to qualify. So... maybe it's not a slam dunk that my client qualifies for the exemption. Is that your understanding of the rules as well, or am I looking too closely at the NC code and missing an obvious exemption?

Anchorman 22:23, 12 April 2011 (UTC) Anchorman


For your response Chris -

Can I send you a quick email with the K-1?

Jeff-Ohio 18:32, 27 April 2011 (UTC)

Guidance on Limited Entrepreneurs?

Hey Ckenefick,

Thanks for all your insight on my last thread! It looks like you have had experience forming multi-member LLCs with non managing members in the past, so I was wondering if you could give me any tips or knowledge on how to treat " ‎|limited entrepreneurs?" (As asked in Discussion:"Limited Entrepreneur" and Benefits?)

Since the IRS recognizes them as someone with an interest different than that of a limited partner/investor who does not actively participate in management but at the same has a different type of "stake" in the enterprise than a limited partner, could a "limited entrepreneur" get certain fringe benefits from the enterprise like having their health insurance paid?

To make my question as clean as possible, let us assume the entrepreneur is truly limited, provides no guidance or services besides the occasional reviewing of financial or operational reports that are described in other IRS publications as outside the purview of day-to-day management and allowed as activity by someone in a limited partner/investor role, and thus does not receive any W2 income or guaranteed payments - just SE free distributions.

Definition from IRS website: Limited entrepreneur. A limited entrepreneur is a person who: Has an interest in an enterprise other than as a limited partner, and

Does not actively participate in the management of the enterprise.

Thanks so much for any advice or insight you can provide!

Covance 06:31, 8 May 2011 (UTC)

added link above, Trillium 13:42, 8 May 2011 (UTC)

Limited Entrepreneur Discussion Continues

Hey Ckenefick,

Thank you for the great information! I had two quick follow up questions:

"But what you could do is treat the health insurance payment, under 707c, as a "for the use of capital payment" (assuming that the circumstances fit the mold), In this case, the payment would be deductible by the LLC as a guaranteed payment and taxed to the recipient member as a guaranteed payment. And such income would be subject to S/E tax under Reg. Sec. 1.1402(a)-1(b). This would be a nice benefit to the member, although he does have to pay tax on it...but paying tax on something is better than paying something. In other words, following my example above, the guy would still get a $1,000 cash distribution - and wouldn't have to pay the $300 health insurance cost out of his own pocket, although he would have to pay income tax and S/E tax on the $300."

Would doing the above, especially if the member has no involvement in the enterprise, cause the IRS to assume they do and re-classify some or all of their income as subject to S/E?

Also, can a "for the use of capital payment" scenario be as simple as the member having contributed cash towards the enterprise as start up funds?

You're the best!

Covance 21:33, 9 May 2011 (UTC)

Hi there;

Yes, it appears from the final "basis statement" that he has a remaining basis in the loan. The problem I'm dealing with is the new accountant won't give me a copy of the CY 2010 1120S...only the final K-1 and basis worksheet. She claims I have 'no need' for the full return. The basis w/s shows the same loan basis at both the beginning & end of year. I don't know if the loan is foregiven or just left as an open payable to the original shareholder. Either way, I take it that the remaining loan basis does not enter into the Cap Gain Calc for the Sale of Stock. Is that true? Also, can the legal fees for preparing and negotiating the Stock Sale (paid by the seller - my client) be used as a selling expense in the CG calc? I believe it can but what say you?

Thanks for the feedback...Bob K. ````

Yes...I would assume there is still a small loan balance on the books and it should be repaid. Again, the other accountant is not cooperating in terms of providing me a copy of the 2010 1120S so I can't see the Balance Sheet... only the K-1 and Basis W/S. Since the loan doesn't impact the Cap Gain Calc I will work with the K-1 and Basis W/S. Thanks for your feedback. ````

How to Handle Proceeds From the Sale of a Business Attributable to non-197 Intangibles

Hello - you mentioned this article from RIA's daily update dated 5/12/11 recently in a discussion. I have a similar situation and would be interested in reading this article. I checked the RIA daily update archives on Checkpoint and they do not go back that far. You wouldn't happen to still have this article on hand would you?

Update - Actually - scratch that request. I was able to find it after all! Thank you! :-)

Thank You

Thank you for your explanation.

I'm sorry that I haven't responded. I had a high speed biking accident (decided to learn to fly) and then my 97-yr old Mom went into the hospital. Both of us are fine, but I have been splitting shifts with a sibling and am just now getting back to the op agreement.

Your explanation was very clear and helpful. Now I can answer the kids (entrepreneurs!) questions and finish the op agreement with a little more confidence. (Typing it with a broken finger will slow me down a bit, but I am really lucky I didn't do much more damage.)

I'd be happy to connect you with my son's group. Thanks again!

son's #

Just picked up your message. His name is Charles Head and his # is 703-992-4399. Good luck with the game!

Thanks - can you look at my response and see what yu think. I appreciate your response.

Thanks so much for your guidance. It was greatly appreciated.

Thanks again for your assistance. You seem very knowledgeable in the partnership area. What is your background?

Stock sale was not an option. Allocation was spelled out in sale contract. Valuation of wife's goodwill was done - apparently contention was that she was owner of corportion at this point. Non compete and consulting agreement to her as well. Appreciate your input


Simon v Commissioner

Hi Chris,

Thank you for your cite regarding Simon v Commissioner in the Discussion:S-Corp_Being_Audited_for_Being_on_a_Cash_Basis. You stated that you successfully defended the use of Cash Basis in audits based on this case law. See my lastest post regarding Epic Metals which seems to narrow the scope of Simon to only include commissioned sales people.

Did Epic Metals come up in any of your audits?

--Wiles 16:28, 15 August 2011 (UTC)

Thank you

Chris, Thank you very much for assisting me on Discussion:Fixing_a_disguised_sale_/_FLP_contribution. I appreciate that your perseverance in staying with me on this discussion.

Fire Dept.


Thanks so much for the information offer! I've been reading as much as I can about this for about the last two or three months. We had a guy come in a few months back wanting to take the deduction for a donation he made in 2010. After reviewing his paperwork we informed him that we would not be taking the deduction because his FD documentation clearly stated that he was contributing the right to use the property for training purposes for two days. Seems like a no-brainer there.

Now we have a client call us before he does anything asking how to structure it so that he has the highest likelihood of surviving IRS scrutiny. Unlike some others I do believe that the taxpayer should get a deduction for the true FMV of the structure contributed, offset by the FMV of "whatever" he receives in return, whether it be more valuable land, reduction in demolition costs, etc. I'm just trying to learn from the mistakes and errors that others have made, and of course the success stories also.

You can email me at, and thanks again not only for all of your insight into this matter but for all of your outstanding help on the board in general!


John Hollinger (Nightsnorkeler)

Nightsnorkeler 18:31, 30 August 2011 (UTC)

Hi Chris.

My son asked me to get in touch with you almost a month ago. He was supposed to call you, but he left for a trip and wanted to say he'd call when he returned. I never contacted you because we had an illness and death in the family (my Mom, 98 years old). Somewhere along the way, he lost your number. If you still want to talk to him, you should probably give him a call.

Looking forward to having things return to normal and to pondering great tax questions. Detta

Life Insurance

Thanks for your heads-up about this problem. I just replied again, but it still says that the last post was yesterday. Something is screwy with the system.

You are a big help and I really appreciate that. Thanks so much.

System glitches

Hi, Chris -

I've reported the issue of discussions not popping up to the top of the discussion forum index after regular posts; I had noticed someone else post about it, and have also had it happen to me. So Tim Doyle is aware of it - however, it couldn't hurt for you to post a note on his talk page about it, just so he knows it's still happening.

They've been experimenting with ways to optimize the site so that it loads and updates faster, but sometimes the changes they make have unintended consequences. That's my bet on why this might be happening. It's kind of a pain to have to add another post just to try to bump the discussion, but in my experience the second or third one does the trick (your way of leaving notes also works!).

Trillium 04:22, 18 September 2011 (UTC)

Thanks for info are interest tracing is my email address. Thanks again.

Thanks you Ckenefick.

Much appreciated!

Late 1065

So, Chris, what is the worst that could happen if my client opts not to do the 1065 this year and we leave their return as a disregarded entity?

Paula Actionbsns 02:32, 8 October 2011 (UTC)

1065/Sched C cllient

Chris you seem to be alluding to something that I'm not getting. Can you enlighten me? You may be thinking, doc's prepared in 2010 become effective 2011. If that's it, I'll have to look at the document faxed over to me, but I'm pretty sure it showed effective date as 01/01/10 because I thought to myself that at least I didn't have to do a short year SP. Thanks a bunch for your guidance and help, it's been really helpful.Actionbsns 22:09, 9 October 2011 (UTC)

1065 Docs

The document that I have a copy of is the one in which they named a new member, the wife, and it is accepted by the DCCA effective 01/01/10. I believe that one has official stamps on it. Do you think there is a possibility of having that start date changed?Actionbsns 03:37, 10 October 2011 (UTC)

Where to find the discussion on IRS audits w/questions about prior year S-corp flow-through items/basis

You recently participated in a discussion that needed to be relocated for administrative purposes. If you generally use the "my contributions" link (op right corner of your screen) to get back to your prior posts, you will not find the new location there.

You can get back to it via this link: Discussion:IRS_Audit_-_questioning_prior_year_S-corp_flow-through_items_&_basis#OCTOBER_2011_posts.

By the way, I did report your issues with posts not bumping discussions to the top of the forum index - and you may also have noticed that the same thing happens with talk page notes. If the talk page note is posted, but the screen doesn't come back and show you the updated page, then the person may not actually get the orange flash bar to alert them to your new message. So sometimes, you can't win! I'll be reporting that secondary effect to Tim Doyle sometime this week.

Trillium 21:51, 23 October 2011 (UTC)


Chris, I called you as you requested, but there was no answer. Please send me an email to DaveFogel 17:46, 1 November 2011 (UTC)

A topic you posted to recently has been moved

The emailing clients and client consent discussions that were started in the tax forum yesterday were moved over to they Practice Management forum, since they are practice management topics (as defined in the Discussion Forum Index. You posted in at least one of those, and Michaelstar has recently reminded me that it would be considerate to let people know when discussions are moved.

You can still find it via the "my contributions" link in the upper right corner of your screen.

Trillium 12:19, 2 November 2011 (UTC)

Thanks for SCRIP clarification

Your input on the tax nuances of using SCRIP purchased from a local nonprofit in making corporate business purchases was extremely useful. I understand your explanation and it looks like your interpretation is the clearest possible route. I agree about not counting a business charitable donation if the SCRIP is viewed as an asset. Thank you for your insightful resolution!


Thedayawaits 15:46, 10 November 2011 (UTC)

Thanks, Chris. My email address is

Thanks so much for the response.

I guess than my angle should be that the total amount of participation is the brokers, the drivers and my client. Along those lines his involvement is incidental and not material as it may total no more than 12 hours a year or something like that.

Does that sound like the response to help determine the income as passive?

I have a similar situation but instead of an existing member being bought out by other member's of LLC a new member has purchased 20% of majority member's interest. Prior to purchase, the majority member has a positvie capital account and the incoming member pay's majority member personally. 754 election was made Goodwill set up on books to adj incoming member's basis.

Who get's credit for the amortization of goodwill, it looks like the incoming member would get full credit correct?


Hello Chris,

Thank you so much for your time and assistance today! My personal email is I know my issue is an uphill battle but I'm not afraid of the challenge.  :-)

Unfortuneately my client trusted the wrong people and was taken advantage of, at least in my opinion. He is not versed in taxes, like the majority of Americans. He was separated from his spouse when they filed their 2009 tax returns. The tax preparer and the former spouse both represented and showed my client the refund amount only for the tax return and he agreed for her to get the amount since it was only around $1,000.

There was $10,000 applied as a credit elect to the next year that he knew nothing about. It appears to me that it was a way of hiding the money and getting my client to agree to her getting the "refund". So when we filed his return for 2010, his refund was held up for several months because of this credit elect.

During this time, without our knowledge, the IRS was communicating with the prior tax preparer because they claimed the credit. Once the IRS determined the credit be given to the spouse, my clients refund was released and that is when the prior tax preparer finally sent a copy of the 2009 tax return. I believe knowing that it will be a fight to get the IRS to change that determination. Very frustrating!

So I appreciate any help and guidence you can provide! Thank you, Thank you, Thank you!!!

Re the CCA and the election [or is it a **choice**?]

This is a pubic forum, pretty much, so we better be careful how we expose ourselves.

I have a hard .. a hard time keeping track of who's up to speed on what issues. But I know you're at the front of the pack if not leading the charge in the discussion of the (o)(5) erection.

Whatever. I trust you have noticed the statement on page 5 of the CCA, namely that "the election is made by reporting the interest on the return as business interest..."

... oh shit, I know you noticed it; you wrote about it, already, didn't you...

Who've you got in the Super Bowl?

Spell Czech

Where's that post?

Chris, you wrote a short but pithy piece in the Tax Forum - in one of the (o)(5) threads - about how the gummint has gone overboard in helping "Average Joe" get his home mortgage interest deduction and how that's leading - maybe - to inexplicable and unsupportable results in the business interest deduction world. It's about the CCA and all the other things that have festered over twenty-plus years about Section 163(h)...

Where's that post; I can't find it now.

I wanted to read it again and then ask you leading questions like "Do you think the Treasury *mis*interpretations are because of ignorance, or malice, or both?"

Harry Boscoe


"...pre-tax Sec 125 deferrals..."

Harry Boscoe


Hey Chris,

Some of the stuff is vague for a reason, not that you can't figure it out based on what I posted, but if you want more specific info add an after my screen name and shoot me an email.

Fsteincpa 02:11, 28 February 2012 (UTC)

Basis in intangibles

Chris, My entire comment was tongue-in-cheek. I just want to make sure you knew that.

--Incognito 01:26, 18 March 2012 (UTC)

Hi Chris - would you mind taking a look at the questions I asked on the discussion titled LLC Partner Has SEP? I did answer your question for clarification and no one else has responded. I would really appreciate a comment or nudge in the right direction. Thanks, Kathleen Biasinik 16:07, 20 March 2012 (UTC)

Good one

And I also considered the source.

LOL :-) Belle

Thanks that's what i needed.

I completely understand what you are saying which is what is causing my problem. The S corp is carrying a negative balance in it's investment in Sub S account and I cannot come up with the journal entry that will zero it out. I know it's basic, but when I debit the investment account to zero out the asset I have no place to go with the credit.

I think I can see the forest for the trees, but my trees are growing faster that I can cut!!!

Sub S

I completely understand what you are saying which is what is causing my problem. The S corp is carrying a negative balance in it's investment in Sub S account and I cannot come up with the journal entry that will zero it out. I know it's basic, but when I debit the investment account to zero out the asset I have no place to go with the credit.

I think I can see the forest for the trees, but my trees are growing faster that I can cut!!!

Mlcpa51 11:08, 2 April 2012 (UTC)

Ckenenfick - thank you very much for your quick response. As a sole practitioner it is "comforting" to know that there is help out there!!

I did review the PL and the related code sections. Just to confirm my understanding, a direct trustee-to-turstee rollover is not required to happen within the 60 day required period as prescribed by section 402(c)(3)(A)? So the fact that my client did not deposit the check written to the IRA trustee in approximately 90 days is not an issue?

Thank you again for your time.

CA Partnership Withholding

Chris, I'm sorry to be so slow getting back to you on your LLC/partnership question.

The CA source income flowing through from the lower tier to the upper tier (NC) LLC keeps its character. Therefore, the nonresident individual members of the upper tier LLC have CA source income flowing through from the CA LLC. Assuming they have no other CA source income (other than source income reported on another composite return, from another flowthrough entity), they can be included in a composite nonresident return. Of course that means they pay the tax at the highest rate.

You are correct that CA requires withholding only on amounts of CA source income actually distributed to a nonresident. The upper tier NC LLC can get a waiver of withholding by agreeing to withhold when it makes a distribution to its individual nonresident members.

All this is covered in FTB Pub 1017 [1] Let me know if you have more questions.

KatieJ 19:39, 14 April 2012 (UTC)

whoops on the SS-4

Chris,thanks for your help on my recent post about hubby and wife who erroneously set up a MMLLC. Question: Whats the best way to handle this with the IRS? Should the client call IRS and simply explain they checked wrong box on the SS-4, or is a letter required? Thanks again Anchorman 22:25, 15 April 2012 (UTC)Anchorman

I guess they're right when they say... can't see the twinkle in someone's eye online. I'm howling, just simply howling, about Marcilio and the "regular" parts of tax law versus the "not so regular" parts of it. "Portfolio" versus "investment" versus "passive" versus "clueless". The kid is clueless, I think, but trying so hard...

Thank you

Chris, Over the last year or so you helped me out on several important client issues. When most TAers would have lost interest, you continued to provide advice. You led me down the right road and helped me in my decision making process, albeit, some good for my clients and some not so good.

As a token of my appreciation, I would like to send you a gift card if that is OK with you. I want to make sure I am sending it to the right person. I did an internet search and found a CPA in Charlotte, NC. Is that you?

--Wiles 15:34, 24 April 2012 (UTC)

scorp stock sale

Chris...I am hoping you have time to help me with an issue. I have got myself so turned around I am not sure I even know basic s-corp principles/rules anymore. You have commented on this scenario in the last few days, but I am stuck on another aspect.

Aunt sold her s-corp stock to Niece in 2008. Niece and aunt have a note payable for $119K. So this is all outside the scorp.

What I am stuck on is what happens to the APIC in the scorp??? The APIC was $123K and retained earnings were -$19K at the time of the stock sale. If the neice gets basis of only $119K for determining loss and such, do I have to do anything with the APIC??? My thought is the APIC is part of the stock and has to be replaced by the new value. So confused on this.

SO, if I do nothing with forward to 2011 when the corp liquidates. What do I net the APIC account against to zero the account???

Thanks in advance. Kbairtax

scorp stock sale

Chris....THANKS for taking the time on a sunday to put me in the right direction. I think I can figure it from here. Got caught up in too many things


You probably know this already, but in case not: to see the posts that have been removed, click on the "history" tab at the top of the page. You can then read any earlier version of the discussion by clicking on one of the time stamps. It is often pretty clear which one removed a post, or posts, although that is not the case in the EA/RTRP discussion. For that one, if you're really interested, you may have to click on a bunch of the timestamps and use trial and error to find the old posts. Although 22:15 would probably give you most of it.

Trillium 00:27, 13 May 2012 (UTC)

Proposed merger structure

Hi Chris,

Sorry for the confusion, but the P.C. is an S Corp. I appreciate your assistance.


i wish you would have given ME an answer

thank you for your response; I just did not find it amusing; just wanted an answer........respectfully, Paul

2022-22 Reference

Thanks for the help.

My understanding of 2002-22 is that the default is, no partnership treatment (assuming all 15 conditions are met) and that the four entities could later contribute the property to an LLC without having retroactive partnership classification.

I would assume that these (the purchase and subsequent contribution) would be treated as separate actions and no substance over form issue would arise... Do you think I'm on the right path here?


xenon16 16:16, 13 June 2012 (UTC)

Guidance on the messy S corp dissolution

Aloha Chris, I appreciate the help you have offered so far, it seems I keep digging deeper into problems with this dissolution. I received an e-mail just before I left for home, seems the lawyer did some amending to clarify certain things, and they have decided to sign off. She sounds upset at me because I told her that she still has the issue of two shareholders, it's really hard not sending a sharp e-mail back to her. I'm wondering, if we account for everything properly, is there any reason, other than fairness, why they can't decide to give the other SH $12,000? It's just frustrating. Actionbsns 03:11, 17 July 2012 (UTC)

Chris, when preparing an S-Corp return where during the year the shareholders guaranteed a loan made made to the S-corp to purchase property, can you consider the loan balance at year end to be a "loan contribution" in calculating the shareholder's stock and loan basis at the end of the year? thanks Cottcpa 17:00, 15 September 2012 (UTC)

even if property purchased is pledged also?

Treasure Recovery

Thanx so much; oddly I have seen nothing in the Asbury Park Press which we read on Sunday's.

Death&Taxes 17:24, 23 September 2012 (UTC)

Royalties & Depletions

If you can't answer a Question leave it aone..Some people want to HELP

Embedding an Image in a Message

Here is some info from a note that DaveFogel left on my talk page on 1/30/10

It's easier than I thought. See Discussion: Cancellation of Debt State of California.
First, you need to upload the image (a .jpg file) from your computer. To do this, click "Upload file" in the toolbox area just below the yellow search box on the left of the screen.
Once the file has been uploaded, go to the discussion and type the message in which you want the image to appear. :When you get to the place where you want the image to show, click the editing button with the picture on it ("Embedded Image"). This will insert the text "Image:Example.jpg" surrounded by two square brackets. Change "Example.jpg" to the name of the file that you uploaded, and VOILA!

Hope that helps.

Trillium 21:30, 27 September 2012 (UTC)

Note from mrTP

no, you have not followed the fact pattern correctly; it was kevin who started the very condescending commemts

Hi Chris,

Thanks for the reply. One item here that I failed to mention (so much going on I just forgot about it) in the beginning which I know will make a huge difference. The c-corp elected s-status effective 7/1/12 and the building was not "transferred" until 8/30/12. So I am thinking the BIG tax applies here. I am reading where it states if an s-corp acquires an asset through a transfer from a c-corp, and the assets basis is the transferred basis from the corporation, the BIG tax applies. I'm thinking the c-corp basis on assets would transfer over to the s-corp. Is that correct?

The vast majority of assets in this business, outside of the real estate, are fully depreciated and would still probably have some value so there would be an overall unrealized BIG for sure. What I am coming up with is for the building/land for the big tax would be fmv of $269,501 and the book value is $252,230 for a gain of $17,271.

Then I see there are limits on the amount to be taxed like overall net unrealized gains but because I don't really have any built in losses, that wouldn't apply. Then there is the taxable income limit calculated as if it were a c-corp.

Thoughts? Anything you can tell me would sure be appreciated. Thank you.

Thanks for your input... just wanted to check with you one more time to see if you have any other ideas on how I can structure this deal to accomplish what I want.


Hi Chris,

I saw your latest post on Discussion:NOL_Carryback_-_Freeing_previously_suspended_passive_losses. I wanted to contact you directly because a cursory review of this thread would lead somebody to believe this is the same riddle that has been asked on the other two threads regarding the NOL/passive loss circular formula.

This is a different scenario. It's a completely different question. The NOL in my example is NOT being created by the same passive loss that is being released in the prior year.

The question deals with the calculation in Code Sec 172 that deals with how much of the NOL gets absorbed in an intervening year.

--Wiles 17:20, 1 November 2012 (UTC)

It matters, because I was selfishly hoping to get your input on this. I didn't want you to simply blow it off as the same old prior discussion.  :)

--Wiles 18:19, 1 November 2012 (UTC)

Chris, Thank you for your valuable input to that thread. It seemed to go around in circles about 4 times and got pretty frustrating. It was nice to have another person of reason involved.

--Wiles 22:36, 4 November 2012 (UTC)

Your piece on "Public Policy"

Yeah, I read your piece back when, and it was then and is now intriguing. But reality rears its head, and I'm first to point out that my leaning is more toward the mechanical, with (maybe) a true aversion to this **policy** stuff. Yeah, I'll follow, eagerly [maybe you could create a blog or just use TaxAlmanac to keep us au courant], but any attempt on my part to provide *assistance* here would be 90% my learning time and then 10% my acting like a sea anchor...

See Len's very gracious caveat about his limited experience and limited background in this arena, and you'll get an idea where I am, too. And he's waaaay smarter than I am, anyway.

Thanks for thinking of me and clueing me in, Chris. Only one 's' in occasion.

Harry Boscoe

Note from Todd

Hey Chris, Thanks for your input on the various questions I've posted. I am the lone tax accountant at my firm. Sometimes I just need to discuss questions with someone in order to think it through better. Your fast responses to my posts have been great and I appreciate it. Todd

Thanks Chris for all you help!

Much appreciated, ZL

Re: "Mind Crime" and your defense

1. I plead not guilty to the charge.

2. My checks to you are in the mail. $599 each, different payees, as you instructed.

Harry Boscoe

salt and pepper

Yes but it's been a long time since any contact. Big, prestigious, well-connected. Podolin 00:17, 5 January 2013 (UTC)

Hi Chris

Yes I live only 5 minutes from UNCA and would have loved to have had coffee! Next time you're here, give me a shout out. My office number is 828-650-9444. I won't leave my cell number here because of security issues (others can see deleted posts if they really know how). Kevinh5 16:49, 7 January 2013 (UTC)

Thanks for the reply to my OIC question but page 23 of the 656 booklet doesn't help much. I am looking in particular for how to allocate household expenses when submitting an OIC on just the married spouse of a couple. I assume he can't claim 100% of household expenses but don't know how to allocate them (50/50% and prorata based on spousal incomes seem to be alternatives). Any idea where I can find such info. There seems to be no guidance/instructions for 656 or 433-A OIC. Thanks for your help. Jim

Hey Chris,

Thanks for your input on the Medical Excise Tax.

From another Chris (Chris Sullivan in KC)

You have *nothing*

on which to base your allegation that if the lawyer were my client he would not get good service from me. What did you have for breakfast, thumbtacks?

Spell Czech

I think that the waters *are* muddy and

that there's an opportunity to shine light into the muddy water to let others acknowledge the muddiness. Not to mangle the metaphor too much.

Tell me, please, how you've decided that this attorney, if he and his S corp were my clients, would be poorly served...

Spell Czech

Spice Podolin 01:43, 15 January 2013 (UTC)

A request

Hi Chris, here is a polite request: Could you please not further any arguments with other posters here? Some people are rather edgy or easily offended, and your comments might not be taken in the constructive way you intended. This coming from a person who has offended many on this site (and been told that I have done so). Thanks Kevinh5 20:22, 17 January 2013 (UTC)


I've never really been able to make that work. Wish I had hints or tips, but I've got nothin.

Trillium 22:27, 18 January 2013 (UTC)

Canadian citizen thread

Hi Chris,

Thank you for your post on the Discussion:Canadian_citizen_never_reported_US_rental_income thread. I would like to refer my client's cousin & sister to a tax pro that can handle both their US & Canada issues. Do you handle this kind of thing? Or do you have a referral that you can pass along to me?

Thank you for your help!

--Wiles 17:40, 31 January 2013 (UTC)

Thanks for the reply.

Not to mention:

I spy... LAND in that there S-corp! Category:RE in a Corp, oh horrors (horrors apparently unknown to the OP).


I wondered if I should have confessed that in my note

The regulars tend to be pretty aware of the rampant eavesdropping - usually because they've discovered the "recent changes" page on their own - so I decided it wouldn't be confusing to you. Seems I was right!

Trillium 20:57, 31 January 2013 (UTC)

So, I guess...

I guess we both have too much time on our hands.

I guess your payroll returns are all done.

I guess all your 1040s are stockpiled and ..

I guess we should both be in the islands sucking suds...?

Are you dogging me?

Hi Chris

You appear to have a problem with just about anything that I post. Why are you taking this so personally. Many times I will post in a effort to get the reader to think about the issue thoroughly yet, you seem to react to my posts as though I am saying something is true when what I am saying is "is it possible that". An example of your responses to my posts are in the DD box 5 issue. I never said there is a TP deduction, I only suggested that the OP research all options for this being included. If you look at the W2 instructions you will find that MSA contributions by employer are required to be reported. This is just one example of Box 5 inclusions. If you want further from me why not send me an email rather than calling me out in this manner? I don't owe you or anyone else an explanation of my statements. I frequently state it to cause people to further think about or research the issue. Some posts can be answered by mere common sense or reasoning the issue out, however, I do realize some people are not capable of this. Some posts can be answered by doing a little research because they are or should be sop to a pro. In these cases I dcn't provide a source. I believe that if people would take the time to research an issue they will remember it better than if the cite is provided to them. So I ask...what's your point in singling out my posts? If you have something to say to or about me, just say it to me and let us get past this. Laura

And from Smokeytax...

Ckenefick - congrats on the victory at the father daughter dance. Someday your daughter may also admire your tax knowledge and generosity sharing it with others. Smokeytax Smokeytax 11:49, 3 February 2013 (UTC)

I'm surprised

Chris, I'm surprised at your description (maybe twice) of Section 1231 as creating (or as allowing, I don't remember the words) a loss or a deduction on the disposition of property used in a trade or business. You're usually an exacting technician of the rules, and you write pretty good, too, so I would've thought you would describe Section 1231 as *characterizing* the loss from the sale/exchange of trade or business property rather than creating or allowing it. I'm sure the loss is created somewhere else in the Code, and is given protection from being a disallowed capital loss by Section 1231.

And totally unrelated to that, I have located the "take depreciation last on the mixed-use property" in the *Proposed* Regs from 1997 under Section 280A. But where I found them, they're still shown as only proposed... So now I'm on a mission to find out if they ever went final. I have no clue why I am doing this. Obviously, too much time on my hands.

I hope the 49ers didn't cause you any discomfort in yesterday's Super Bowl... I think some high stakes gamblers may be a bit peeved.

Harry Boscoe

Know what you mean

This story is very long, and I have skipped the first part, but it talkes of the two drug dealers who came into my office in the late 80's:

I asked what they needed. Burger let me know he had to file three years of tax returns showing $45,000 of income each year.


“The police raided a house I own on Germantown Avenue. Mind you, I don’t live there but I have a room on the second floor. There was this desk in that room, and the police seized the desk and carried it out with them. In the desk are three years of those, what do you call them, papers with your income on them that an employer gives you?

“W-2 forms.”

“Yea, that’s it, W-2 forms, each showing 45,000 of income. They’s fake. I was gonna use them to get a loan, but now the law has them. I’se afraid they’ll turn them over to IRS and they’ll check up on them. So I want to pay tax before they do that.”

While this was going on, Fries' beeper had sounded several times and he had used my phone to respond to pressure in the commodities market. How much easier it would have been had he had a cell phone, but those were the days before they were perfected.

I sat there dumbfounded. All I could think was that I wanted these men out of my office, but had no idea how dangerous they were. None of us had mentioned the business that occupied their time. We had tap danced around that matter, but surely it had to come up. All they wanted was to buy three years of tax returns! I did not want to come right out and say I did not do that kind of work, so I tried to play nicey-nice and hoped they would reach that conclusion.

“Well, I can’t just put down you made $45,000 on a line; it has to be from a type of income. How shall we say you made this money?”


“Are you a carpenter, an electrician, plumber, consultant? I can’t just say the money floated down from the sky, or that you robbed a bank.”

“Well, I do lots of things.”

At this point, Fries stopped massaging my Touch Tone long enough to break in.

“Yea, he do lot of things!”

“Like? Do you rent?”

“Yea, you could say I rent.”

I could picture him renting a street corner for his dealing.

I was getting nowhere; I had to make my point, and so I reached back ten years for ANOTHER STORY.

(here I told the story of how my associate had been given $300 cash and a sheet of paper with one number on it, '$82,000 rent' to do the return of the 2nd man in the Philadelphia Mafia, explaining that if that man said he made 82K, he knew that IRS could not get him for tax crimes, and his net worth must have gone up that much.....and if Chicken Man, as he was called, could do that, it should give him some idea of what he had to do.)

“But you guys want to pick some number out of the air which might or might not be true and provable. You’ve gotta be smarter and more scientific than that.”

Burger was silent a moment, then asked:

“Are we wasting your time?”

“I think we are wasting each other’s time. You have a lawyer; he surely knows someone who can fix you up with what you want, but that is not my area of skill. I’ve told you what I know. Think about it.”

“Thanks, we will.”

With that they left the office. My room was flooded by the staff and other professionals, all asking who they were. Bill Clinton should have been there. I neatly paraphrased him by saying, “Don’t ask and don’t tell.”

Death&Taxes 17:57, 9 February 2013 (UTC)


Thanks for your input on this. I referred the lady to a bigger firm that will have someone more able to argue this. My only connection to the taxpayer is that the vacation home is not far from where I live.

Your information about SC taxes is enlightening. I have a client who now lives near Hilton Head and I am amazed at how low his property taxes are. Income tax structure is pretty good for pensioners, too. He sold his New Hampshire home shortly after buying the SC one, so there is no argument of it being a second home.

Again, thanks for your help.

"Yes. And, I'd show it on the 982 for 2012 and show it as excludible.

If there have been no efforts to collect for 8-years - no letters, no calls from lender, no calls from collection agency, etc - then this debt was charged off long ago."

Ken, if they were not bankrupt or insolvent, how would you communicate that the 1099-C amount issued in 2012 is excludible? (This is the case where I think the debt was discharged back in 2004, but issued 1099-C in 2012). Thanks! Randy

medical malpractice.

Just curious-might this have been Tripler Medical Center?

Thanks for the response about the erroneous COD filing procedure. Randy

Mergers 368 only applies if its the other way around? This is not a shell corp. The LLC was merged into a newly formed C Corp in 2012.

Thanks in advance for your reply. Jvolpe 23:50, 28 February 2013 (UTC)

Hi Chris. I am new to this site, but can see that you are a well respected leader. I am really stumped on the partnership 179/bonus question. I've been at this for hours. I've looked through IRS, ProSeries, a handout from a CE on fiscal cliff. Please help!

Form 8941 spreadsheet

Hi Chris,

In Discussion:Lacerte_and_the_health_care_credit, you mentioned that you had a spreadsheet that you created for calculating the Form 8941 credit. You offered to share it with Jessica. Would you be willing to share it with me? If so, can you please e-mail it to me at

Thank you in advance

--PVVCPA 17:47, 9 March 2013 (UTC)

Thanks, Chris

I just sent you an e-mail. It may end up in your spam folder... I had a little issue with the account a month or so back (luckily I only use that e-mail address for TA and not for clients).

Trillium 19:31, 9 March 2013 (UTC)

Gold Article...

Y'all done sent me a copy already. I'm gonna hafta wait til Pappy gits home so's he kin read it to me.

Harry Boscoe

Thanks for your help with my QIO, on one of the busiest days of the tax season.

Good luck over the next month. Smokeytax 21:40, 15 March 2013 (UTC)


I've got to get the tax return out, so I think at this point, all I can do is point out to partner A that his capital account reflects what he would receive at liquidation, and continue to do this each year. He's a savvy guy, and I expect he'll figure out a way to deal with it, such as having the LLC pay his marketing corporation sales commissions. What a learning experience! Thanks again for your help. Smokeytax 05:55, 16 March 2013 (UTC)


I am in Ballantyne/Blakeny. Matt (SouthPark) said he'd get the three of us together after tax season. Any help on the amortization would be greatly appreciated!

Our CPA is the one who told us the electronic filing was rejected.

Our CPA was the one who informed us the electronic filing had been rejected :) Sunny 56 19:43, 20 March 2013 (UTC)

Yeah, I've been noticing that.

She tells me she gets her CE through correspondence. You get what you pay for. We chased BLRGCPA away for the same thing. Kevinh5

You had me for a moment

As I was reading the message, before I got to the signature. If you had left it unsigned, I probably would have thought it was from her. Kevinh5 11:55, 29 March 2013 (UTC)

Mind helping this guy?

Chris, this Discussion:Expenses paid on behalf of partnership was posted on Accounting Questions, so you probably did not see it. It is really a tax matter. I think you are the best TA person to help this guy, if you care to. Podolin 15:34, 29 March 2013 (UTC)

LOL, and you don't think that is heated?

I'm just trying to smooth things over so that you and Rex will move on. Remember last time you got into an argument with user DaveFogel he left the forum. We really need him, so I don't want to scare off anyone with a lot of knowledge or insight. Just trying to keep the peace. Thanks for understanding. Kevinh5 19:52, 7 April 2013 (UTC)

P.S. I've stopped picking on TaxEA. Mainly because she stopped posting.

197 (f) aggregate rule

Chris, thanks SO much for your help on a recent post! Have a follow up question on the rule, however: does it refer to (A) more than one INTANGIBLE (ie., rights to 49 franchise territories) -- or -- (B) more than one TYPE of intangible being aggregated (ie., goodwill plus franchise rights )? My client bought rights to 49 territories, then later sold 16 territories. No other intangible TYPES are involved. Can she claim the loss on the 16 now, or does she have to defer until all 49 or disposed of and simply adjust the basis for now? Thanks again AnchormanAnchorman 14:28, 8 April 2013 (UTC)

Crane Doctrine applying to inherited residence

Chris, where in the hell are you? I really expected you to jump into this thread. I had all the fun alone. MP

Hi Chris -

I read TA quite a bit and have noticed you are clearly knowledgeable, support your positions well.

Also, you can explain them and I am mostly a "learner" at this stage.

I post questions occasionally.

I always try to learn and research before doing so and I have received information that helps but often suspect I have not asked the question well enough.

And, even after about 3 years using TA, I still have a hard time searching adequately and understanding the lingo.

Usually, when I ask questions, I am trying to understand something more thoroughly. Rarely can I yet jump from A to E since I want to understand B, C, and D.

You've been good to address some of my question posts. Thank you!

If you have a good understanding about inside basis and outside adjusted basis for units owned in a Master Limited Partnerships, would you be willing to take a few questions off-line about it please?

I realize you are probably still busy after 4/15 deadline and may not have the time. But you'd be helping a pretty bright CPA who wants to do a high quality and thorough job for her clients in Indiana.

If you are willing, what do you prefer? Emailing? Phone?

Thanks for your consideration.



Probably this one: 10:14, 18 April 2013 User:Cpaeth

Click the history tab at the top of the page...then you have to kind of match people up with messages based on chronology.

PS - "dawn" is also a time for sleeping...go back to bed!

Trillium 13:03, 18 April 2013 (UTC)

Ok Mr. Ckenefick,

You are beaten me up over there in the Discussion log. I am the person who is dealing with a Clt who took a distribution from IRA. This was my first post and now I see why I did not before. Bascially, I just wanted to see what can that FF Professional do that I cannot to save this Clt tax dollars?? I understand there are some exception to the rule. However, this client is totally in deniel that they have to pay takes. Now, if I could obtain a PLR, I would, but this situation is not the case. Spouse A had Spouse B take the money out. She was informed by the Brokerage she would owe taxes. She has been informed by me. But this Forensic Pro wants to make a new law using this client. Clt was not incompetant. She was informed. She is living off the funds. So my point is, I see that the FF wants to change the mind of the IRS. I just want to Rep my client in their best interst, yet compliant and properly reporting? As we wait, P/I is building (did not send any funds with 2012 Ext, which I insisted happen. Thats all, Sir. Thanks for your help along the way.

Hi again Ckenefick,

Read your response. And you are absolutely correct, the questions could have been asked in many different ways, and after reading your reply, that would have been the perfect intital question. So with that said, I learned a thing or to and will do my best to be more direct and detailed. And beleive me, I have my client best interest at heart. Your post have been very helpful. Have a great weekend!

Yeah, trippin' with Grace...

...down the rabbit hole. Feed your head!

Mea Culpa!

Chris, I apologize for perhaps almost certainly giving the impression that I read right past your very forthright statement in the refundable credit thread "What is the IRS's authority for providing this exclusion - trace it back - all the way back - and you'll find that there is none." When I scrolled up in the discussion and read more carefully what had been posted while I slept, I saw there the answer to my non-question, which was, of course, "none," and I flushed with embarrassment for having made it seem as if I don't read with comprehension. At least that one time. Not like all the others. No way. Is the sun over the yardarm?

Harry Boscoe

Interesting topic

Oh, ok, if you insist. But we retired guys are very busy, so I'll get to it sooner or later. Hint - It was triggered by a Fidelity commercial offering 100 free trades for opening a new brokerage account. No fair stealing the idea. I have lots of thoughts on it, and it is interesting. Podolin 15:10, 30 April 2013 (UTC)


it was my partner who just had valve replacement surgery. I'm really hoping that it's the medicine that is making him wacky and saying such hurtful things. I took the entire day to take him to several doctor and rehab appointments, then a late lunch, and was attacked the entire time verbally. I'm going to assume that it's the medicine and brush it off. Thank you for your thoughts and well wishes. I am sorry to hear of the loss of your father. I'm glad you had a good relationship with him. Kevinh5 22:11, 14 May 2013 (UTC)

This same client had another location - same year. He took fixed assets, but was not allowed to take patients' records, which he had purchased and partially amortized. I had put this on Form 4749. The loss generated was $3k. [The loss, of course, was the difference between cost and amortization.] Am I doing this properly?

Hi Chris,

I was hoping you would have time to respond to a follow up question I had on the post "Recourse Debt".

Thanks for any help at all!HurstCPA 15:16, 19 June 2013 (UTC)

Mr. Ckenefick. Could you point out the authority for claiming CP504 does not give you a right to CDP? Is there something in the Code or regs or anywhere else where the IRS clearly so states?? bretsharonbretsharon 23:51, 2 July 2013 (UTC)

I just posted how this has turned out on the board. I just wanted to give you a special thanks, for pushing me to go a little further with this. I think maybe she has already done it, but thankfully all 5 ministers said they would not take her money when (if) it comes. Her minister had no idea she was doing this, had no idea of her financial situation; but he was aware of her mental problems. He thanked me for calling him, and he said he would make sure that she gets help, and she will be taken care of. I believe him, there was genuine concern & surprise in his voice. I also discussed with him that if she has already done this, it can be rolled back over, so he is going to keep me updated. Thank you again.


I am new to this post. I have been reading some of your posts and was impresed with your knowledge. I have a question regarding a limited partner's loan to the partnership. I have alwyas thought a partner loan is a recourse liability to that partner therefore should be allocated to that partner as recourse loan 100% on his/her Sch K-1. But someone point out to me that a partner loan is not a recourse loan unless the partner has a deficit restoration obligation. It is a nonrecourse loan to the partnership if lending partner has no DRO. I am confused. What is it suppose to be, recourse or nonrecourse? Jvclo

Your message

Hey Chris,

The post in question above was not from me, but user:jvclo. Gplourde 22:00, 9 August 2013 (UTC)

sale of ptshp interest

Thanks Chris. Much appreciated!

Foreign Earned Income Exclusion


I posted a thread about the Foreign Earned income Exclusion in the Tax Questions Discussion Board, could you take a look at it? I need help with it.

Thank you,


We did 8 last week.

No im no

No I'm not Kirkland, but that was definately the best line of the day. I am ok at playing my parts, but Kirkland is Academy Award material. I could never reach that level in a million years.  :) Gazoo 21:39, 28 September 2013 (UTC)

Hair & Impressions

Chenefick, I want to apologize for intruding on your Hair Piece hypothetical, and after I did that I swore I would not intrude on another one. However, when I got to the forum this morning, and saw the one on Impressions, I simply could not resist the urge.  :)

You really should have been a law professor because these are just the kind of problems they pose on their exams, and you do an excellent job constructing them.

However, I will now go back to my promise not to ruin them with my silliness in the future because I know that serious tax points are included in the discussion of your hypotheticals. Take care. Gazoo 17:56, 6 October 2013 (UTC)

We agree

"I am not sure what you mean by hypotheticals." How could I make this error? My friends who post here are real and we are all actually having lunch together right now. Ha. I might have a few words in the future from time to time, but not near as many as I put in the hair piece one. Take care. Gazoo 18:01, 6 October 2013 (UTC)

I was sincere

I was very sincere when I said that your rejoinder to my post was excellent, and it gave me food for thought. I just wanted you to know that it was Mark29 who set me off, and of course it had nothing to do with you. Even though I am a progressive, liberal whatever you want to call it, I do get along with a lot of Republicans (I have to where I live ::). And you are one of a handful of peple on the board I really respect. I am writing this so you know that I was really venting on Mark29, he may be a nice guy, I don't know, but he gets under my skin for some reason. My problem, not his. Take care. H.D.J. Friefunk 21:08, 7 October 2013 (UTC)

One more question

Aloha Chris, glad to see TA back and running. I had one more question on my corporation that is liquidating, I posted it but it's way down on the list now and rather than revive it, I thought you might be able to answer here. Is there any advantage or reason to distribute assets on the FYE 8/31 TR as opposed to the short year tax return, which will be a 12/31/13 year end? Thanks so much for your help on this, I spoke with the client yesterday and even though it's complicated, he's happy about saving a few dollars. Actionbsns 23:45, 3 December 2013 (UTC)

Good Game indeed

I hate the game was won on penalties, although Gore did a great job of keeping the offense on the field. Panthers were just a bit overly emotional (some of the players). That Kuechly is ridiculous! That kid has a real future, reminds me of like an Urlacher or Cushing but faster and stronger if that is possible.

Carolina will be back, it's a shame the yellow flags helped my team. Hey, just think of it this way, at least Carolina won't have to play the Seahawks; that team is crazy good even with the inconsistent play of the quarterback. Niners better bring their A+ game.

Yoga huh, I'm always afraid to go; thinking that the women will laugh at how out of shape I am. Wife put me on the treadmill yesterday and nearly killed me!!

Have a great season, I may be reaching out to you this year with some Partnership questions if you don't mind. Every year I tend to get more and more of these entities and I am just not too strong in this field of taxation but I need the experience; catch 22.

Thanks for all you provide to this forum sir.

You didn't miss much

The game wasn't as close as I wanted; Ah!! Baloney!! People say that and they really don't mean it. I was nervous until that last interception because I know anything can happen (Colts vs Chiefs last week).

Florida Gulf Coast University eh? Tough loss to Jacksonsville last night despite Chase Feiler's 4th double double this season. Yeah, so I was bored and Googled it. I gotta get something accomplished today, maybe I should be reading up on Section 731 partnership distributions for fun.

Hey, have a great rest of your Sunday and stay sane this tax season!

Not that I am counting but.....

darn it, that is a great idea. Maybe I can make fun of someone on the board that has a hairpiece or call a female Almanacer fat! I'll think of something...

I better find some time to get some work done too!

Thanks for all your help

You have always been very helpful and incredible at providing on point research. Thank you again.


…has been added to the trusted list. Let me know if Coddington has any issues with signing back on and posting.

Thanks, Lin


Hey Chris,

Pardon my ignorance on this subject but I still have questions regarding my client's case, if you don't mind answering sir.

The Restitution my client is paying, I understand that the loss is subject to the 2% AGI limitation but am I correct in stating that the payments will not be limited to 10% of AGI as well (the Section 165(h) limitation)?

I realize the above sentence probably answers its own question but I just want to ensure I am doing this correctly. When I fill out the form 4684 I can't seem to get it out of the Section A without it being subject to the 10% haircut. The only other option is Section B (which is I think a Section 165(c)(2) loss should be).

I owe you a few cases of beer for this one sir. And you know I wouldn't bother you with this if R2 and RD1 were still around. I did a yellow box and those two duked it out (respectfully) regarding restitution cases. This is the first I've had so I am just trying to get it right.

Thanks in advance!

It twas

It was me, EADave, with the Restitution question. Geez, I can't even pose a question correctly; I'm all out of sorts today!


Chris, this Dennis is something else. Thanks for your input.

Grandfathering in a sole managing member for SEP

Aloha Chris. That's a good discussion regarding the SEP's, there's a lot information I didn't expect. I'm wondering if you steer me to the language that you suggest including on the 5305 to Grandfather in an owner/employee to a SEP. I've checked a few sources to see if I can find a "master or prototype traditional IRA for which the IRS has issued a favorable opinion letter", I don't think they are used very much, it's easier to use the 5305 and probably less risk, too. Have you seen one? I'd like to read the language. Actionbsns 02:23, 31 January 2014 (UTC)

Ckenefick - thanks again for your help in sorting out my partnership option question. I wrote up a memo about the issues, emphasizing the conflict of interest & gave it to the client. All parties involved will reach an agreement on whether the option was intended to be a capital vs a profits interest, which wasn't clear in the option document. It all worked out very well. Hope your tax season goes well.

The unpaid fees thread

He deleted all of it - including all the posts made by others. I've pointed that out to Kevin, as it is in violation of TA rules. But, there was some damning info in that post - so perhaps a full delete is justified. Belle 18:37, 23 February 2014 (UTC)


I didn't read the entire (initial) dissertation; and I myself don't worry excessively about anyone cross-referencing information posted here back to the 'real world'. But, some folks do and the OP seems to be quite concerned. He deleted his (same) post on a different board too. He sounds young to me, FWIW. Belle 19:28, 23 February 2014 (UTC)


How funny - the coincidence of it all! That article had been untouched in my file folders for more than a year. So you've helped me twice already in less than a month. Thanks! Except I'm still unsure about what to do about the frequency of pay situation. Yay taxes.

Anyway - I would love to read the article. I haven't laughed out loud since tax season started.

Hi, Ckenefick. Thanks so much for your continuing help. May I ask what tax research service you use? I'm just not getting what I want from Parker (although it might be limitations on the part of the user). Smokeytax 13:26, 1 March 2014 (UTC)

Thanks for the info on research services. Have a good one!Smokeytax 16:54, 1 March 2014 (UTC)

Nominee Lien

Thanks for the information.

TA and # sign oddities

Hiya, Chris -

In case you were wondering about TA's odd item numbering philosophy, TA converts any "#" at the start of a line other than the first line into a number. It starts with 1, and then if the lines with "#" at the start are contiguous, then the numbers will increase by one for each line. It also indents the numbered items.

This can be cool, but it - like many things on this site - isn't seamless. If you want to use the auto-numbering for a list, you can't add blank lines between the items in your list (as they'd then all be converted to "1" rather than sequentially numbered) and you have to put something other than your first item into the start of the post, since a "#" sign in that line will just display as typed.


Trillium 18:12, 24 March 2014 (UTC)

C'mon, man...

"Snippet" - with *two* p's!

S. Czech

Thank you....

Hi CKen:

Thought I'd stop by and give you a very special "thanks" for all of your assistance regarding my posts this busy season.

You are very thoughtful to contribute and give your time to helping people out....and yes, obviously very brilliant to be able to analyze tax issues the way you do.

Gotta like your sense of humor too ;)

Best to you and looking forward to continued posting with you in Tax Almanac.

BTW - I am in New Hampshire.

Take care and thanks again for everything.


1031 exch: Something wrong here?

I would like to know what answer your spreadsheet gives to the brain teaser question posted in this discussion. Almost all worksheets will get this one wrong. I have my own spreadsheet too...because I am a tax dork.

That thread is a bit messy. I will summarize the facts here:

Relinquished Property:

  • Basis $183,333
  • Sale Price $308,000
  • Mortgage paid off $110,321
  • Real exchange expenses $13,046
  • Prorations and such $13,600
  • Transfer to QI $171,033

Replacement Property:

  • Purchase $294,954
  • From QI $171,033
  • Cash in by buyer $123,921

What is the recognized gain?

If you are going to play, please post your answer to this discussion.

--Wiles 02:44, 7 April 2014 (UTC)

Ephesians 6:11

It was the last name of my principal in high school. Not really sure why I chose it for TA.

I have another alias here on TA (PVVCPA). The people at my office know me by that alias. They kept calling me a dork for spending too much time on this site. It's funny though! They are always trying to research something. I tell them, "Check out TA." They just turn their nose the other way and stumble through to Google or our research software.

This site has been a tremendous help to me. And, so have you. I appreciate your help on many questions/discussions that we have had. I also appreciate your sense of humor and practicality, some misinterpret that as being gruff, or something else. Being misunderstood is fun, a rush, sometimes.

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