User talk:Jeff-Ohio

From TaxAlmanac

Hi, Jeff, please see my response below and let me know if you have further questions. Cheers!

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Really appreciate your knowldge with regards to the forein income/exclsuion transactions.

Client is coming in today, so I do not have ALL the details, but was wondering if you could lend me a hand.

What I do know is that he as the HB-1. His wife has the 'dependent' visa I beleive is a H-4. H-4 is a dependent visa under H-1 but that will have no bearing on the determination of residency status based on Substantial Presence Test.

Lived in Portuguel until October and also has a rental property there. He is a professor and I assume made decent money.

Moved here in October, so will have a W- from October - year end.

THe factors I need to weigh is, the amount of $ generated in Portuel? If he files a 104NR, this money is not reportable? Only the US income? Correct.

Then, if we file a 1040, using worldwide income, they can elect to fil a joint return, claiming the standard deduction and receiving a potential credit for the amount of money earned in Portugel, but ALL included on 1040? You'll need to weigh in whether picking up his Portuguese income (which would otherwise not be taxable on 1040NR) and claiming §911 with FTC would help you lower the liability.

Tad confused and thanks for your help. Not a problem, Jeff!

Email would be great, if you have time. jeff@newmancpas.com

Thanks!

Resonse to illegal SSN

TP fully vetted by attorney and immigration attorney.

Hi I have some suggestions regarding your post about the termination of the S corp/ partnership - ABC example you gave. I would love your email address to send you this research. The inks won't be active for you but you could use the citations, code sections to find the arguments you are looking for.

Szptax 18:30, 4 March 2010 (CST)szptax monique@ericsoncpa.com

Jeff, Sorry I did not see your message to me at the end of November until today. I did not refer back to the post, but I believe this was the stock sale of S-Corp. What I meant was your figures for basis included all of the S-corp activity through the end of 2009. The sale presumably took place sometime during 2010 so the S-Corp activity during part of 2010 will change stock basis in your computation. Let me know if there are any other questions.

Your original message: TBerg - I sincerely appreciate you attention to my question regaridng the sale of the bar.

I used your calculation, just edited it for the change in basis.

When you say *watch the basis adjustment in 2010* can you further elaborate?

Everything else look good?

Thanks,

Jeff-Ohio

Jeff-Ohio 17:14, 30 November 2010 (UTC)

1031

Yes, the unrealized loss is still the NBV less the $4,500. See my post today to your discussion. DaveFogel 22:21, 1 February 2011 (UTC)

1031 Exchange - Truck

Jeff, you left out some facts that I need to analyze this. Did the dealer give the taxpayer a trade-in allowance for the old truck? If so, how much? And how much did the taxpayer have to pay to purchase the new truck? Cash or note? DaveFogel

1031 Exchange - Old Truck for New Truck

Jeff,

Here are the facts of the exchange you gave me:

• Old truck traded in has basis of $1,000 and debt of $3,000.
• Dealer pays off $3,000 debt on old truck.
• New truck has purchase price of $20,000.
• Dealer credits taxpayer for $3,000 towards the down payment on the new truck.

Even after I asked, you didn’t mention how much the taxpayer had to pay to purchase the new truck. I will assume that the dealer didn’t allow any trade-in allowance for the old truck, and that the taxpayer was required to pay $17,000 ($20,000 purchase price minus $3,000 credit from dealer). This was either paid in cash or with a note, or a combination of cash and a note, you didn’t specify which.

My analysis:

• Since dealer pays off the $3,000 debt on the old truck, taxpayer has $3,000 income (“boot”) on the exchange.
• However, the taxpayer was required to pay $17,000 for the new truck, either in cash or with a note, or a combination of cash and a note, and either way, cash paid or liability assumed offsets a liability relieved in computing “boot.” As a result, there is no net “boot.”
• The basis of the new truck under IRC §1031(d) is the basis of the old truck ($1,000) plus the amount paid towards the purchase of the new truck ($17,000), or $18,000.

DaveFogel 04:12, 7 February 2011 (UTC)

Attachment

I think it could make a difference, however, the issue is a real legal question.

I have been asked to post some of answer to the original question when the answer might benefit other readers. RoyDaleOne 15:35, 2 April 2011 (UTC)

Hi,

So you lost my e-mail address? for shame! I'm fine - same old same old...You?

BTW - I tried your email address & it didn't go through? It came back as undeliverable.

Szptaxszptax

Proposed edit for your recent post...

Jeff, when you wrote "Client sold 31% of his partnership interest in an apartment building..." did you really mean to say - I think you did - "Client sold his 31% interest in a partnership that owns an apartment building"?

Spell Czech 19:58, 23 April 2011 (UTC)

First, the *fact* questions.

What is this unexplained $2,070,931 bump up to the capital account? From what you've told us, it increases the partner's capital account without any detail or an explanation. Do you have some idea what it might be?

Is the "distribution" shown on the K-1 [I've put "distribution" in quotes because I suspect it's *really* just a "plug to zero" - and effectively hides any other plugs... But I'm a cynic when it comes to other accountants' work.] $2,354,000 or is it $2,354,400 or is it $2,354,500? Do you *know*, or are you just *assuming*, that it represents the partner's ending capital account, that is, at the time he sold his interest? [Like, do you *know* that the partnership didn't slip him $10,000 cash along the way - which is now buried in the $2,354,XXX number shown as "distributions" - see my cynicism, just above.]

Let me know the opening capital amount, with dollars, so I can at least have a *balanced* capital account for the year.

If there's any - *any* - "depreciation recapture" under Section 1245 or 1250 when we get through, I'll buy Doug M. a beer. *My* definition of "depreciation recapture" not his... I'll note only that he seems to have over-simplified his description of "recapture" - to the point that it is confusing instead of edifying.

And also, you'll need a snapshot of the partnership's tax basis in land, building, and personal property somewhere along the way, plus an approximate - close enough is good enough - snapshot of the market value of the things the partnership owns.

An afterthought: Was there a Section 754 election and adjustment to basis *before* 2010?

Spell Czech 22:44, 23 April 2011 (UTC)

Another afterthought.

Did your client get a cover letter with his K-1s? Did the partnership or their preparers tell him anything about the K-1, like something about the unexplained $2,XXX,XXX bump to capital, that he - your client - thinks so little of that he's disregarded it or thrown it in the wastebasket?

K1

Jeff, feel free to forward the K1...and the closing statement.

ckenefick@carolina.rr.com

I hope you've been able to find out enough to determine your client's income on the sale

Jeff, I'm sorry that I wasn't able to look at the K-1 from the $8M/$2.48M partnership sale. I'm confident, however, that the information to "finish the puzzle" is *not* on the K-1, as others have suggested. Consider the useless description of the K-1's "bump up" to your client's capital account, and the accompanying likelihood that the reported "distribution" of what *may* be your client's ending capital balance is just a "plug-to-zero". There's a possibility that the preparer used *your* client's capital account to balance the increase in basis for *his* client's capital account, in which case the entry has nothing to do with your client. [Although it could be the purchaser's step-up and the distribution could then be your client's proceeds from the sale *before* his selling expenses.]

Have you been able to talk with the E&Y people? They might be able to figure out what that entry was, and they have an obligation - or the partnership has the obligation and E&Y had best know enough to advise them as such - to give the seller/partner the information necessary to report his "look-through" gains. That's what the Reg at 1.1(h) or whatever the cite is, is all about. It explains how the mechanics work and it imposes reporting requirements. [With a copy of the partnership return and a lot of work you might be able to back into what your client's tax basis in the interest he sold was at the time of the sale. This would then make you ask "Where's the money?" - what's the actual amount of money your client received in this deal? Did he receive two-million-and-something dollars for the sale of his interest in the partnership?]

I hope you realize and appreciate the steepness of your learning curve. And I hope you're climbing that curve. It takes effort - and sometimes luck - to get projects that we can indeed learn from. You obviously have a thirst for getting things right and for understanding how and why they are what they need to be; don't let the bozos beat you down.

And the folks at the Big Eight or Big Six or Big Four can be totally inept and clueless. I say this after decades of often shocking - I mean shocking! - experience with the shortcomings and lack of accountability in their product.

Spell Czech

Games

Yeah, we had this one member here playing games. He signed up with several different user names to disguise the fact that he was the one asking all of the questions. He didn't want word to get out that he wasn't as up to snuff as he portrayed himself to be, so by splitting the questions up over several user names, it didn't look like any one person didn't know how to do his job. Turns out he had also been holding himself out to have a credential that had inadvertently expired. I think he is over all of those games now, because I haven't heard from his alter egos in awhile. All is good now.

Ohio Health Insurance Premiums Schedule A deduction for Ohio

Hi, Jeff,

Could you shed some light on the Ohio medical subtractions on Schedule A for the Ohio It-1040?

Very confused with the worksheet. Part 1 is pretty straight forward. I know if I have self employed deduction on line 29 of the federal 1040, I cannot include those premiums on item 1b. but then below it asks if you are part of a subsidized health plan and if no to put unreimbursed health care premiums on 2b. It doesn't say to exclude them if taken on the 1040. ( I would have thought they would use the same wording as in item 1 if this were the case.)

Am I interpreting this wrong? It seems like double dipping if you put those premiums on 2b but I would like to if that is the intent of the worksheet.

I appreciate your feedback.

Sincerely,

Taxlady2010 01:01, 31 March 2013 (UTC)Taxlady2010

"Learn something new everyday"

And on some days, we unlearn something old, which can be way more valuable than learning something new.

Harry Boscoe

"Learn something new everyday"

And on some days, we unlearn something old, which can be way more valuable than learning something new.