User talk:Doug M

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"Belle---I think R2 is going to embarrass me." Don't look at it that way; lot of gray area there, and some of the really sharp folks here have differing interpretations. I agree with your logic, but exactly what does logic have to do with tax law <w>. Belle 00:18, 9 March 2010 (CST)

Big tax this year

Thanks Doug... The BIG tax does not apply this year since the S Corp has a loss. So the BIG tax is pushed of to next year when there will be no limitation if there are profits. I was uncertain about the fact that the BIG tax will apply at the corp level, and the gain flows through to the shareholders this year. I think I have it figured out... thanks for your post.


Have you tried the link yet? I haven't (amazingly, most of my clients know whether they got the $ 250 or not). I'm curious what pressure forced them to provide the link - maybe "our" lobby is more powerful than we thought. Good luck the next four weeks. Belle 10:05, 18 March 2010 (CDT)

Sidd: Your basis in your new asset has to be reduced by gain deferred. The basis in the new asset is equal to the basis in your old asset plus boot.

In this case, it would be the NBV of the old asset plus .6MM for the add'l debt assumed/cash paid. Based upon your numbers, the client took on add'l debt of $200K and paid cash of $400K to make the trade happen. (somehow you went from 2.4 to 3.0)

So, if an airplane is a 5 year asset and you took bonus, and no short tax year/mid quarter convention rules apply, your NBV is $960,000. Add to this the boot of $600,000 and the basis in the new asset is $1,560,000.

If by chance the only boot was the add'l debt assumed of $200K, then your new basis is $$1,160,000.

And, you continue to depreciate the old basis as though you still owned the asset and depreciate the new basis of $200 (or $600). You can elect out of this application of the law.

DOUG: Thanks for the response. You are absolutely correct, but as I mentioned Proseries does not do a good job so what I do is sell the old asset for zero or whatever it takes to give zero gain/loss and then just add the Net Book value to the additional cash paid and start depreciating it. If you think this is not correct, do you think I should create a new account just saying LKE ASSET and in your example only depreciate the addtional $200K assuming this is the additional debt taken as the basis for new asset over the same life as the old asset and continue to depreciate the old asset. We try to do it the way I said to avoid the hassle of matching with total assets on books.

Please explain more

"Get your joint client in a tax due situation, lower the withholdings and file joint? No tax refund to trustee?"

Doug, above is your response to my question about a newly married client wanting to file separate because her husband just went through bankruptcy.

She is stuck on wanting to get a nice refund each year even though I suggested to her otherwise but maybe I can suggest to her what you are saying so could you go into a little more detail?

1. Are you saying next year and beyond they should do a joint return and get close to oweing nothing or something close to it so they won't have their refund confiscated?

2. As for this year she wants to file separate and he wants to change his withholdings to where he owes at the end of this year. Good idea or bad? I mean if they do this is there a problem from then on to file jointly and do what you suggest above?

3. If she is stuck on wanting a refund, do you think it would be a good idea to suggest her to lower her withholdings and put money from each pay period into an account so she could have that "big once a year" refund?

Thanks for any help.


Please explain more


Relative to my earlier post about a client filing separate due to her newly husband filing bankruptcy.

If she files using itemized deductions, my understanding is he does also.

Does he have to claim all his available itemized deductions (ie...real estate tax, loan interest) if it causes him to get a refund?


I appreciate your input and the article Doug.

I agree regarding the debt, it seems like the best course of action for them is to pay it off as soon as possible, wait the twelve months, and then sell the rest of their lots.

Their debt is recourse, but I can't see anything that that would affect for this particular situation. (Must be non-recourse in IRA otherwise it is a prohibited transaction I believe). UBTI looks like it applies the ratio of average debt over adjusted basis to their gain, however their basis was practically nothing so they are still going to being paying quite a bit of taxes.

Its unfortunate because I think if they had known about this before hand they could of structured the development deal without debt.

Thanks for your post.

Credit where credit is due

Actually, it was Kevin who removed SpellCzech's posts, after the numerous spelling errors in that preceding post had been fixed by the OP. But I don't think you should consider SpellCzech a spammer per se - post history shows more of a joking-around nature, and no offsite links. I imagine you might see more posts from him, along the same lines, but feel free to let one of us know any time you feel his, or anybody else's, posts are inappropriate. Anyway - thanks for the report!

PS - you just posted asking about how to bold - see FAQ#10.

Trillium 11:04, 11 October 2010 (CDT)

Thank you

Thanks for your help on my S-corp sale.

Your time time to illustrate the details are very much apprecaited.

Would you mind if I sent you a quick email with my calculation?

Thanks again.


Jeff-Ohio 19:17, 30 November 2010 (UTC)


Hi Doug - I have a memo typed up and was hoping I might be able to email it to you for your blessing.

Mych thanks.

Jeff-Ohio 17:30, 1 December 2010 (UTC)

rolls traded in on new rolls lease.. Doug I was hoping I could get some more direction form you on this item.

The 2007 rolls was disposed of as part of the new lease. The rolls dealership paid off the outstanding loan of approx $162k and the book value on the vehicle prior to the disposition was $264k. The new lease is approx $5300 per month and the there is no buyout at the end of the lease as the dealer will take it back. What to do with the remaining book value in this scenario? Amortize over the term of the lease or can TP take a section 1231 loss here? I appreciate your help here. Sometimes the other uses on this board like to attack and take shots and people rather then actually make an effort to help.

I also can be reached at 954-347-5391 if you would like to discuss via phone.

Thank you

History tab

Click on the history tab at the top of your talk page, it'll tell you who made changes, and when. That particular note was left by user:Vermontcpa, in reference to his discussion Discussion:Business automobile trade in on leased vehicle.

Users have two ways of leaving a note on your talk page:

  1. the easy way, click the link that says "leave a note" - which will nicely format things to separate the note from the prior one with a title, or
  2. the hard way, clicking "edit this page" and just adding their note at the end of the prior one. Vermont must have selected the second method, and then also neglected to add the four tildes at the end.

If you choose to respond, you might consider doing so on the discussion itself, rather than in the talk pages. KatieJ often does this, usually with a mention that the benefit of the forums is that responses build upon each other, and that other users might also learn from the exchange. But that's really up to you; you don't actually have to respond at all if you didn't want to.

Trillium 20:43, 9 December 2010 (UTC)

S Corporation


I left you that question on S Corp. The client provided me with a completed Form 2553 showing the first day to be Dec 29. I was not happy.

I wanted to know if I can file a fiscal closing and take advantage of the payments he made in in 2009 and 2010 and let it flow to his 2009 tax return. If not, then I will file an 2009 calendar and 2010 calendar 2010 and keep the S Corp going.

I think if he is going to start up another business, he would avoid the incorp fees again. He could change the name of the entity and the file a change in what the business does, for the future.

editing history

go to the discussion HISTORY tab at the top of the page. Click on (prev) to see the prior edit. Kevinh5

History tab (take 2)

yep -what Kevin said Trillium 23:15, 28 January 2011 (UTC)

Some extra hints on the history tab, et al

Doug, maybe you got what you needed from the rushed notes you received from Kevin and from me, but in case not, here's some extra info.

When you click on the history tab on a discussion, it shows you the people who contributed. Unless somebody has a lot of posts on a discussion, you can usually pick out an edit because the username shows up more than once (also, some people "label" their edits, and that'll be shown there, in parentheses to the far right). If you click the radio radio button for those two occurrences of the username, you can compare the two events - click the right-hand radio button for the latest time the username appears, and click the left-hand radio button for the prior occurrence, and click the "compare selected revisions" button, and you'll see the "before" and "after" versions.

You can also just look at any prior version of the discussion; click any date/time stamp link in the list. Although that's not usually as helpful if you want to find out what changed, or why changed what.

If you're curious about one particular user's edits, you can click on "edits" next to their name in any post. That displays all of their activity, and you can compare those by clicking on the "diff" link. That shows you exactly what changed with each particular edit.

If those two ideas didn't help with your specific issue, or if you have other questions, let me know.

Trillium 00:32, 29 January 2011 (UTC)

Doug, is this you?

If so, I have read several of your articles and texts in the past. Kevinh5

Thanks, Doug. This is a brand new concrete driveway. The old concrete was torn out and new concrete poured in. So, recovery period seems to be either 15 years or 27.5years. I am not sure.Cpaea 20:21, 9 February 2011 (UTC)

Thanks for the info. I did not know that 15-year land improvement would get bonus depreciation. Good to know.Cpaea 06:07, 11 February 2011 (UTC)

@Doug, my client received the IRA distribution last year at age 59. He is aware that there will be a penalty. So I have answered my own question. Thanks. 23:49, 23 February 2011 (UTC)~

Formatting links

If that link is good, and you want to include it, but format it, you would type this:

[ Fleming Case]

(In case you click "edit this page" above to copy/paste that, it's everything from the [ to the ], inclusive, that you want to copy/paste and/or type.)

When you're formatting external links (a link to something outside of TaxAlmanac), you enclose them in single brackets and leave a space between the link and the link title.

(This relates to Discussion:Head of Household - Support Test‎.)

Trillium 18:46, 24 February 2011 (UTC)

editing to add: well, I see you weren't trying to link directly to the Fleming case anyway, and I can't find a direct link to it (at a quick glance around). Since OP already linked to the SCA, I think I'll just leave your post as you'd last left it. Trillium

$5 million

thanks a "million" Doug -- yes -- I did all my tax updates in November -- they were excellent, but of course December ruined a lot of what I knew/know.

Claim of right

There are some discussions about whether or not signing bonuses and claim of right requirements conflict, e.g., Discussion:Wage bonus repaid in following yr, see TinCook and Riley following Taxwizard. Jlevy is in PA, and that might make a difference in the application of Sec. 1341, but also given his lack of experience (VITA/friends and family only) I'd be hesitant in providing hope that may not actually apply, as he may not know how to research the actual requirements. In other words, he may interpret your note to imply that he can simply remove the income from 2010, and if you don't actually believe that's the process to be followed, you might want to expand on your note to him earlier this evening.

(Or you might think it's just fine as is! Had you posted the reference to "picking the year you want" on Jlevy's discussion, there might have been some other comments that would help him determine how it fits, but since it's on the talk page he kind of loses the benefit of any additional insights your comment might raise. So I figured I'd post my observations in case it changes anything for you.)

Trillium 01:10, 6 March 2011 (UTC)

PS - My note above is probably overly complicated by my reference in the first sentence; skip that for now if you don't mind. I think I was really just concerned about whether or not Jlevy, who actually brought up Sec. 1341 himself in the OP, but was grasping for straws for something that could be done in 2010, might mis-read your note to him. Of course, it's always possible that I misunderstand the situation, and you actually ARE suggesting that he could adjust 2010, in which case I still wish you'd post that on the discussion itself, so that I (and others) could learn from your info. This isn't an area I've done much independent research on; I could probably use the update.

Trillium 01:22, 6 March 2011 (UTC)

Gross Income

Please note:

Gross premiums due on accrual method small business corporation from its sale of insurance policies are gross receipts for purposes of section 1372(e)(5) of the Code.

REV. RUL. 69-192

That is to say if the insurance agency is collecting the gross premium and remitting the net premium due to the insurance company, that gross income is the gross premium and not the net commission.


RoyDaleOne 19:57, 7 March 2011 (UTC)

Hey, Doug!

You may want to consider changing your recent statement in the discussion of the sale of 70% of an interest in an LLC: "The surviving partnership will pay ordinary income tax on the A/R it collects."

Probably the partners will pay the tax; the partnership will likely only recognize the income...

Spell Czech

Rev Rul 69-192

The ruling is about an agency.

Sorry I did not make that clear.

Alimony Thread

Hey Doug, remember that Alimny thread from a few weeks back, well, you mght know that I'm a tax case junkie and the courts seem to agree with your position on Alimony, which contradicts the normal IRS position. I just posted on the thread about two cases that support your original theory. [[1]] Tax Writer 23:53, 8 March 2011 (UTC)

I wish..

I was kidding; I had just taken a bite of a sandwich and choked/coughed and had to wipe down my monitor. I pity the folks he's doing financial planning for as he seems to hear what he wants to hear. Hope your season is going well. Belle 21:55, 12 March 2011 (UTC)

Reverse Mortgage Article

Doug, thank you for your comments on my article regarding reverse mortgages. DaveFogel 23:52, 29 March 2011 (UTC)


Hi, Doug - I'm not really willing to post on Xz's discussion about this, and if your questions there are sort of a socratic method of posting, please carry on! If you're trying to get to the bottom of what Ckenefick is posting, you might be able to get some info from the discussions and links on the QJV category page.

Since this has started arguments in the past, I should probably say that my opinion is that when Riley points out what the IRS's position is, I don't think he's saying that there's any basis for their position, just that it is what they're saying they believe and will enforce.

Hope that helps.

Trillium 23:25, 1 April 2011 (UTC)

Bonnie Lee's article about ... oh, whatever.

Doug, you mentioned that you e-mailed the author about her article in FoxBusiness. Did you just tell her point-blank that what she wrote is **wrong**? And maybe that it should be retracted? Did you write to her after her second article on June 30th? Did she respond to you?

This case begs for a Zorro or a Batman ... or a Spell Czech ...

As noted elsewhere, my obsessive disorder is tweaked and then thwarted by this type of thing, and that's not healthy for me!!!

Spell Czech

Your response to my NUA question. Thank you.

Hello Doug M:

Baskerville99 here. You kindly responded to my Q on NUA. I just got back to check the site today.

At least I was able to find a relevant code section from your post. It appears to be 1.402(a)-1(b)(1)(i)(B)

I picked up on what I've capitalized here also- (the reg quoted)

The amount of net unrealized appreciation which is excludable under the regulations of (A) and (B) of this subdivision shall not be included in the basis of the securities in the hands of the distributee at the time of distribution for purposes of determining gain or loss on their subsequent disposition. In the case of a total distribution the amount of net unrealized appreciation which is not included in the basis of the securities in the hands of the distributee AT THE TIME OF DISTRIBUTION shall be considered as a gain from the sale or exchange of a capital asset held for more than six months to the extent that such appreciation is realized in a subsequent taxable transaction. However, if the net gain realized by the distributee in a subsequent taxable transaction exceeds the amount of the net unrealized appreciation at the time of distribution, such excess shall constitute a long-term or short-term capital gain depending upon the holding period of the securities in the hands of the distributee.

Note that it says time of distribution, not the time of disposition or sale. Also, the idea that they use six months in that sentence and then long-term or short-term in the next sentence is also interesting.

In example, the NUA at time of distribution is 350K, not 300K which would be the amount at disposition or sale.

I don't know if the regs really have clarified this, although I think the case against my POV has been strengthened.

Your other post touched on why this could be important. The individual could be a day trader with a lot of STCG and LTCG. He would like his tax shield from the $50K loss to be used up at 39.6% ordinary rate as opposed to 20% LT rate (or whatever marginal tax bracket he is in).

I will continue to look into this, but I feel more informed than what I was before. Thank you.


thank you for help and time with my question.

Dan, cpa in Ohio FireCPA19 22:39, 8 February 2013 (UTC)

Thanks for the Cash/Accrual help

Aloha Doug, I didn't mean to sound sharp to you or to JR, I do appreciate your help and his. Sometimes Chris (CKENEflick??) gets a little too much on the smartass side when all you want is a straight answer. I wasn't in the mood to be confused by his retoric at the time. Actionbsns 04:49, 12 February 2013 (UTC)

Your little asterisk problem

This is very minor, but as you've seen a couple of times today, the wiki software underlying the website doesn't like your asterisks at the start of lines. If you'd like to have the two asterisks (or even one of them) appear as typed rather than as bullets or indented bullets, you have to tell the wiki to stop applying wiki rules. You'd do that like this:


Trillium 20:31, 28 February 2013 (UTC)


Hey Doug M, you said Go to our resident experts website, you will find all the info you need. Dave Fogel., what is the resident experts website? I don't follow, sorry, just started using TA in January. Thanks! --Mhewes 23:07, 2 March 2013 (UTC)


Thanks, Doug MCMCDEVMCMCDEV 22:40, 3 March 2013 (UTC)

Providing depreciation schedule...

Doug, here are some of the prior discussions where Laura has posted about her "work product" policy... Search Results. They may not all be on point, but I thought you might want to know that there have been prior debates on this (so you can decide whether and how to approach the issue this time around).

Trillium 17:57, 5 March 2013 (UTC)

Thanks Doug.

That reminds me, I need to replenish my Scotch supply! Gazoo 20:28, 6 March 2013 (UTC)


I've emailed him to tell him we miss his valuable advice. I've printed his articles/responses many times to put in my files as documentation of the position I've taken on returns (mainly foreclosures/short sales/etc. It's sad that Chris drove him off. Hope your season is going well. Belle 20:04, 11 March 2013 (UTC)

Accrual to Cash Basis calculation

Thanks Doug, for the method you illustrated a couple of weeks ago on making this calculation. I just did a sample conversion following your method for the end of January and it worked really well. The program my client uses did a couple of wonky things, but once I figured that out, I was able to get it to work fine. I appreciate your taking the time to provide that information.Actionbsns 03:59, 15 March 2013 (UTC)

Thanks - and also w/r/t depreciation schedules

I had meant to write you and Actionbsns notes thanking you for your support* on that guy's talk page, but I really appreciate the second note you left him.

I suppose you've noticed that the ethics of certain "depreciation schedules" policies has been raised yet again - Kevin's edited some of his comments but it's still an interesting read, if you have the time: Discussion:Mystery Depreciation‎. You do know that if you click on the history tab, you can review prior versions of the discussion, don't you? That can be helpful and illuminative at times.

Trillium 06:30, 18 March 2013 (UTC)

* I meant "support" in the sense of "helping to foster a congenial environment on TaxAlmanac" and not as support of me or my actions; I realized that wasn't very clear, in retrospect.

Search skills

Surprisingly, that JCT cite was on the very first page of the search results when I put "168(k)" "263A" into my generic search engine (i.e., not even a tax service). I will admit that I spent another 10 minutes or so surfing around trying to be sure I wasn't just seeing things, because if it was that easy for me, then why the heck couldn't he find that after looking "everywhere," or whatever his claim was. Makes you wonder about all that glorious experience that he was so loath to communicate....

Trillium 00:54, 19 March 2013 (UTC)

Oregon film credit (oregon production investment fund)

Dear Doug M,

  I searched this forum, and found 1 tiny posting within another thread where you made mention of the oregon production investment fund (you referred to it as oregon film credit I believe).  I started a thread about concerns I had about this credit a couple weeks ago, but no one responded.  
  If you have time to comment here, I'd greatly appreciate it.  I am also located in Portland. I Don't know how many contributors are from oregon and familiar with this credit other than you.   My question is not how to treat the credit at the state level -- that is the easy part.  It's the schedule A deductibility at the federal level that makes me nervous. First I consulted an auditor within the dept of revenue, and he hadn't even heard of it, had to call me back, and gave me some vague info about it, saying it was possibly deductible as a charitable contribution OR state income tax paid.  It just sounds too good to be true, so I emailed the email addy for the credit and got a much more detailed response, copying me on two letters the dept of revenue had received from the IRS, which were murky themselves, but each seem to justify sch A deductibility. 

Also, from your other post, it sounds like any diffence between the credits you receive, and the discount you are paying for them, you are reporting as STCG on 8949?

 Do you participate in this credit? Do you advise it for your clients? If it truly is fully deductible at the federal level, depending on what tax bracket you fall in, investing in this credit could be a better deal than the stock market at its height...and that makes me nervous, it sounds too good to be true...

Again, any feedback or experience you have in this subject is highly appreciated... Thanks, Jake Regicide9 18:11, 17 July 2013 (UTC)

Depreciation question

Aloha Doug. The $13,000+ mentioned in my post for depreciation is based on 95% business use of the vehcle. Actionbsns 20:49, 17 July 2013 (UTC)


Thanks, Doug. I appreciate the help.Actionbsns 00:45, 18 July 2013 (UTC)

Taxable Gifts

Thanks, Doug. Although, I think I may be misinterpreting what you mean by "add back taxable gifts". What is your answer to my question in dollars ?

--Wiles 20:30, 2 October 2013 (UTC)

I just saw your correction on my User Discussion page. Thank you. I rephrased the question on my thread.

Does Joe have to include the full $300K as part of his gross estate?

--Wiles 20:30, 2 October 2013 (UTC)

You may have heard by now that the Tax Almanac ( ) web site forum is permanently closing its doors effective June 1. Perhaps you have seen the pink bombshell “Important Service Announcement” when logging in.

Long-time TA user ChrisV2 has volunteered to set up a new website where TA users may continue the discussion. The site is up and running now and has an active base of contributors.

We invite you to take a look and join your fellow TA refugees.

Frankly (TA member and new member of TaxProTalk)

Frankly 03:47, 3 May 2014 (UTC)

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