User talk:JDACPA

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- Tim Doyle, TaxAlmanac Moderator 23:06, 8 February 2006 (CST)

351

I haven't researched it in a long time, but others have. The rule has always been that a. you must place substantially all the assets AND liabilities into the corp. b. you cannot have excess of liabilities over assets. c. you cannot use debt taken back to balance the scales, except in the CA circuit as I recall. Riley likes to remind us that you can do it there. Otherwise, it's a no no. Now, the solution is time. How long? No one knows. The other solution is to leave out some debt.

In your case, you just want to start with some debt instead. What I've done without trouble is get them inc'd with a thousand bucks. 60-90 days later, add the add'l money as debt. There just needs to be a gap in time from the initialization of the corp and the debt entry. Hope that helps.

Dirtbag. So when you going to SD to visit your new client?

JDACPA:

1. Do not amend the state income tax return for 2008. You will be doing nothing but screwing you client.

2. Include the state income tax refund received in 2009 on Line 10 of Form 1040.

3. Exclude the refund from AGI and MAGI when calculating any deductions, exemptions, exclusions, EOLIBILITIES, or credits that are subject to AGI and MAGI phase-outs or phase-downs.

4. Include an 8275 or 8275-R which ever you believe is correct with the return.

You might want to look at my post of 3/18/10 that made reference to the Kohler case. IRS was unreasonable in the view of the Court and was totally smacked down.

WDK