User talk:Mtmckeecpa

From TaxAlmanac

Welcome

Hello, and welcome to TaxAlmanac! My name is Tim Doyle and I serve here in the role of TaxAlmanac Moderator. If you haven't done so already, you might want to review our Quick Start Guide to help you get oriented.

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- Tim Doyle, TaxAlmanac Moderator 10:53, 9 February 2006 (CST)

Fringe Benefit

Would you mind sharing the sample plan? If so, you can email to tpp4u2@yahoo.com. Thanks!

Jake's email

schindlerjerome@mindspring.com

CPA Designation

I've just added it to your user page - you can edit the page to see what I added.

Thanks!

- Tim Doyle, TaxAlmanac Moderator 13:34, 28 April 2006 (CDT)

K-1

I greatly appreciate your response to my K-1 question regarding the Sec 988 income, and the tip to access the web site of GreenTrader. Thanks much!

Thanks

I appreciate the comments. I am heading to Amazon to get these books. I have some opportunities that I am working on with some clients that become way more attractive if you through a tax deferral vehicle such as an IRA or 401(k). best regards, Keith Kavinger 09:38, 23 May 2006 (CDT)

Links

Select Help from the navigation box on the left side of the screen. From there, select How to add links to an article. That should give you several examples. If you're still unsure, let me know.

- Tim Doyle, TaxAlmanac Moderator 08:40, 25 May 2006 (CDT)

Linking

Hello:

To add a link to another website, such as the IRS website, you first go to that site and copy the address (for example, copy http://www.irs.gov, or the address to the specific page you want to link to). You can do this by clicking up on the address in the top of your browser, highlighting it with your mouse, and then pressing Ctrl-C to copy that into your clipboard.

Then come to TaxAlmanac and go to the discussion reply box, or edit an existing page and go to the point where you want the link to be. Then, right-click and select paste, which should, if you did everything correctly, put the address of the page into the edit box.

You can leave the address bare like that, or you can make it look a little bit better by adding some formatting around it, like this: "[address text]" This is a square bracket character, the address of the page to go to, a space, the text you want to be displayed for the link, and then a closing square bracket character.

Here are two examples:

Let me know if this still doesn't help!

- Tim Doyle, TaxAlmanac Moderator 20:23, 6 June 2006 (CDT)

sale of rental property

What does TIC stand for? You left a message on my tax question, but I wasn't sure of the acronymn. Thanks, Shirley Skq9545 14:08, 21 June 2006 (CDT)

LS. Vines v. Commissioner, 126 T.C. No. 15

I saw your post re the above and wanted to know if you thought the following would fit into that?

Tp had a reg job until may 05 - saw the hand writing on the wall and decided to leave before being terminated. Tried day trading, and lost about 100k from May 05 - Apr - 06. Then got a reg job - When tp met with me the tax preparer, I realized the losses for 2005 wont count b/c didn't make an election with the 2004 tax return (b/c facts were not available at the time). 2006 will also be lost b/c tp didn't inform me that this is what he was doing or planned until we met after the 4/05 date.

Any thoughts would be greatly appreciated

Thanks

Binyamincpa blipsky@fmm.net

Bold & Italics

Mtmckeecpa:

At the top of the Tax Questions Discussion Forum listing, you'll see an item highlighted in yellow with the title Frequently Asked Questions. Select that, then go to the How can I change the formatting of my posts? section.

You can also click on the Help link on the left side of any TaxAlmanac page and go to the How to add bold or italics link in the Editing Guidelines section.

It's very easy actually, just type two apostrophes on either side of the text you want to be in italics, or three on each side for bold. To do both bold and italics, it's 5 (2+3) on each side.

Let me know if you have any problems getting this to work. Feel free to try it out in the Discussion Forum - Test Area.

- Tim Doyle, TaxAlmanac Moderator - Talk to me 21:37, 27 August 2006 (CDT)

Prior Post

Is it either of these?

• Discussion:Real Estate Investment
• Discussion:Basis increases to Land
• Discussion:Are blue shield insurance premiums deductible by me on my Schedule C?
• Discussion:Real Estate Taxes included in basis in computing Gain or Loss?

Let me know if not...

By the way, I basically did a "dummy search" on "fkjdshf" to get the negative search results page. I then went to the bottom of that page and unselected all areas except Discussion, then searched for "266"

- Tim Doyle, TaxAlmanac Moderator - Talk to me 11:30, 2 September 2006 (CDT)

Found It!

Excellent! Glad I could help. I'm hoping to have a better search interface deployed to the site in the very near future, and I can then tell everyone how to find discussions that way.

How's TaxAlmanac working for you overall? Any improvement we could make? In the discussion forums? Do you use the content sections of the site at all?

Thanks!

- Tim Doyle, TaxAlmanac Moderator - Talk to me 12:42, 2 September 2006 (CDT)

Feedback

I'm very happy to hear that you find TaxAlmanac a valuable addition to the other sites that you visit. Not that I am trying to get you to not go to the other sites, but what is it specifically that you go there for? Is something missing from TA that these other sites have?

As far as content goes, I mean the items located at Tax Research Resources - the Code, Regs, topical articles, and other materials that I am in the process of importing, such as IRBs, tax treaties, IRS Notices, Announcements, Revenue Procedures, Revenue Rulings, etc. Some of these categories don't have much in them yet - I am still working on obtaining the information and posting it on the site.

I think the real value of TaxAlmanac, which most people haven't realized yet, is that because it's a wiki and not just a simple discussion forum, that we can link from the discussions to this content material, link from the topical articles back to the relevant discussions, and basically tie everything together. It's still not easy enough to do this, and I am working to improve this so these links can be made much more easily.

Thanks again for the comments - I appreciate it!

- Tim Doyle, TaxAlmanac Moderator - Talk to me 13:55, 2 September 2006 (CDT)

New Search Feature

Yesterday you were trying to find a prior discussion. I said that I was working on a way to allow users to find things easier. Well, I now have a working prototype. Take a look at Advanced Search. You can select which things you want to search and what words you want to search for. You can opt to search just in discussions, etc. Let me know what you think.

Thanks!

- Tim Doyle, TaxAlmanac Moderator - Talk to me 00:24, 3 September 2006 (CDT)

Feedback

Thanks for the great feedback about TaxAlmanac and the other sites that you visit!

- Tim Doyle, TaxAlmanac Moderator - Talk to me 09:33, 7 September 2006 (CDT)

Disappearing Post

Remember when you edited the link on the discussion Discussion:Real Estate Appraiser and your post went away? That was because you removed the two curley braces "}}" at the end of your post. Each post starts with "{{" and must end with "}}". Once Dennis added those back in, your post was restored.

Don't let that stop you from adding links to code & regs though! I'd rather have you try and fail than not try at all. I'm here to help if you need it.

Thanks!

- Tim Doyle, TaxAlmanac Moderator - Talk to me 11:26, 19 October 2006 (CDT)

Employer's educational assistance program

Hi Mtmckeecpa

Thank you for your help with this post. My email address is: mskeane641@cox.net

I have RIA and Kleinrock but they had no sample written program that I could find. Michael

Software

Mike, the one I found is ProfitCents out of NC. $800 I think for a year, unlimited use...I paid for mine already, but it's not gotten the kind of response I hoped for. My small biz clients aren't sophisticated by any means. JR1 08:48, 7 November 2006 (CST)

Attorney client costs

Mike, Let me know if this answer's your question. Michael

a)Law Firm Gross Fee Arrangements and Deductibility of Litigation Expenses

A law firm typically pays many of the costs of a client's litigation, such as filing fees, deposition expenses, travel, etc., but ethically is required to hold the client responsible for these costs regardless of the outcome of the litigation. There are two methods the firms use to account for these costs, the "net fee" and the "gross fee" arrangements.

Under a net fee arrangement, the firm explicitly agrees to pay all litigation costs. The client agrees that all such costs will be repaid, if at all, out of any lawsuit recovery, and will be repaid before the attorney's fee is computed and any remaining proceeds disbursed to the client. Under the net fee arrangement, the firm's payment of litigation costs are treated as advances, payments of a client's expenses subject to reimbursement. Thus, client cost advances are considered to be loans, and as such are non-deductible. [19]

Under a typical gross fee arrangement, the law firm agrees to pay all litigation costs, and the client agrees only that the firm will receive a percentage of any recovery that might be forthcoming or, in the event that the client discharges the firm, the client will pay the reasonable value of the firm's services to date. Under a gross fee arrangement, the client is not responsible for the payment of litigation costs in any event. In Boccardo v. Commissioner, 56 F.3d 1016 (9th Cir. 1995), the Ninth Circuit held that the litigation cost payments made under a gross fee arrangement were not loans or advances, noting that the client's lack of obligation to repay the litigation costs under the gross fee arrangement made it difficult to apply such labels to such payments. The court characterized the payments as business expenses by finding that a personal injury firm's payment of some of the costs of its clients is a necessary and ordinary practice and by finding that the firm chose a form, the gross fee arrangement, that permitted it to claim all ordinary and necessary expenses as deductible.

CAUTION: In an extraordinary ruling, the court concluded that the deduction of these expenses would not violate any law of the United States or generally enforced state law that subjects the payor to a criminal penalty or loss of license. Although the California legal ethical standards' prohibition of the payment of client expenses might be treated as a state law, and the violation of that law could theoretically be enforced by revoking a lawyer's license, the court did not know of any general enforcement of that rule. Obviously, the IRS does not accept this conclusion and the authors recommend caution in relying on this opinion as substantial authority, given that only a "well reasoned" opinion can be relied upon.

The IRS has granted automatic consent to lawyers handling cases on a contingent fee basis who advance money to pay for costs of litigation or for other expenses on behalf of clients and want to change the method of accounting from treating them as deductible business expenses to treating them as loans. Rev. Proc. 99-49, 1999-2 C.B. 725, Appendix, Section 1.01. See Section 502.2 for a discussion of changing accounting method.

19/ Pelton & Gunther, P.C. v. Commissioner, T.C. Memo 1999-339 (1999); Canelo v. Commissioner, 53 T.C. 217 (1969), aff'd, 447 F.2d 484 (9th Cir. 1971).

hi there - self directed IRA questions

hi i see from your profile you are familar with the self directed IRAs, can you please offer any insight here:

http://www.taxalmanac.org/index.php/Discussion:Self_directed_IRA_invests_in_LLC_-_UBTI%3F%3F_%28also_Self_Dealing%3F_prohibited_transaction%3F%29

2 lines of credit....preconstruction condo

hey there. the condo is assignable. its not completed yet so i am not earning income yet. but can i deduct the interest that i have spent on the 2 lines of unsecured credit?

preconstruction question i asked earlier

so are you saying i can deduct this as "investment expense"?

Roger Dencklau - IRA in an LLC

Thank you for your response to my "IRA in an LLC" question I posted on April 1, 2007. I appreciated your response which had good information for me to consider. Is it possible that we can discuss this further? Please let me know. Thanks again, Roger Rogerd 15:06, 6 April 2007 (CDT)

I need your help

We had a discussion on April 1 about my IRA in an LLC. This could be lengthy so many thanks for offering your help.

Let me lay out the scenario:

In May of 2006........

Roger IRA invests cash into SC LLC. Roger IRA is 100% owner and sole member. Roger IRA directed an investment of cash (127,000)to SC LLC. SC LLC now had 127,000 in its checking account.

Next, John IRA self directed 113,000 to SC LLC as a promissory note. SC LLC now has 240,000 in it's checking account.

SC LLC purchased a townhome for 200,000 and secured John IRA's promissory note with a mortgage on the townhome for it's 113,000 loan. SC LLC remodeled the townhome with the remaining 40,000. Total invested in townhome is 240,000.

Roger personally is ready and willing to take an early distribution (I am 50 years old) of his IRA for 2007. Roger wants to sell property to a buyer for 240,000 and payoff John IRA mortgage with proceeds of the sale. Remaining cash will be given to Roger. Appraised value of townhome is 240,000.

Equity Trust Company has informed me that I need to provide them with a "Fair Market Valuation Form" to facilitate the distribution to Roger. On the form they ask for the "Purchase Price of the Asset". They indicate to me that would be the 127000 I originally put in. Next they ask for the "Current Asset Valuation". This valuation has to be done by someone qualified to do an independent appraisal. I have the certified appraisal by the licensed appraiser and his appraisal is 240000. Equity Trust has told me that I will be taxed on the "Current Asset Valuation" which means taxable income of 240000.

Is that correct?

Thanks for your time. I hope tax season has been kind to you. Happy April 17!

Best regards, Roger

Sure I will be glad to help you Mike!!

No problem at all. I actually am headed up to Orlando for a few days to see my family. Where in Orlando are you located?

Thanks!!

Sandysea

P.S. Will send you a separate email in case I miss you on here :)

marriage as an unforseen circumstance

I was doing a google search and found your posting. I am in that situation. I was widowed in 2002, bought a new home in 2005. When my old townhouse (owned since 1986) didn't sell for 6 months because of surrounding new construction, I rented it with the intention to sell in 2 years. In 8/2006 I met someone and we got married in 9/2007. He lives 30 miles away so we decided to live in his town and I sold both my townhouses. Total gain is around $250,000. I can;t believe that divorce and separation are unforseen circumstance but not marriage. Were you successful in your petition? I have contacted both my senator who contacted the IRS who said to file for a special ruling. While I gave up $16,000/yr SS benefits (in 4 years), it is maddening that I might also have to pay $11,000 in capital gains!

filetaxes.com

I'm glad the information was helpful. I came across the site last year when a client asked me to file a couple of 1099s after the deadline. Their rates were actually cheaper when compared to the other vendor I used because their rates went up after the deadlines.Natalie 14:15, 10 January 2008 (CST)Natalie

Quickbooks Remote Access

Web-Ex.

My Client is a u.s."S" corp doing business in Guam, I have filed form 1120F for Guam Income and paid taxes to Guam, can you help as to how to file form 1118 for foreign tax credit to pass thru to u.s. shareholder. Form 1118 part II line 9 ask total u.s. tax against which credit is allowed but form 1120S has no tax and what about the diff in rate of tax for Guam and u.s. I am a first time user and I hope this message get to you and the disssion forums

IRA UBIT & 990T's

I have read some of your answers to questions regarding UBIT and debt leveraged IRA investments. I have a client who understands that he has UBIT in 2007 and has asked me to complete the 990-T's. The custodian knows they are coming and will pay the tax. Atfer having read almost 24 pages of the IRS instructions I still have a few questions. Can I contact you offline for futher direction and understand that charges will apply.

CLOSTING COSTS

hi there! This is what you wrote back in 2006 : "I separate the loan costs out and amortize over the life of the loan, so if they refiance, the unamortized balance is deducted currently and the new loan costs are amortized over the new life of the loan."

I am currently working on a real estate client that has refinanced. Can you by any chance direct me to a code section or regulation that backs this Up? My boss wants back up and i cant find anything.

Thanks for any help you can provide.

Self-Directed IRA article by Nancy Choate

Do you still have this article? If so, is there anyway I could get a copy? I tried contacting the company provided for in the earlier postings, but they were unavailable.

IRA and UBIT

I started a discussion under tax questions under the above title. Do you agree that logging land would throw my client into the UBIT rules?

Sir,

I read your comments on an earlier discussion about "Can s-corp own llc?", and how you accounted for the LLC's activity. I have a new situation with the following circumstances:

LLC is sole member LLC, thus disregarded entity.

S-Corp wants to acquire entire interest in LLC (in 2007 had two partners, thus filed 1065) effective 01/01/08 (with only one member)

Since LLC is now sole member, doesn't the tax consequence flow to the members personal return on Sch C? Thus, S-Corp cannot own sole member LLC?

Your assistance would be appreciated.

Thanks,

W. Glenn Redden CPA in Pinellas County, FL

Imputed Interest

Saw some of your posts re: Imputed Interest and thought I would ask your opinion on the following situation:

-Company A (S corp) owned 75% wife and 25% husband -Couple going through a divorce but wife (not husband) steadily taking sh distributions but we are booking these as Due from shareholder til we get the divorce final etc. Balance >$10k. -Company A cash basis and of course individual is too.

Questions:

1. Should we wait til the end of year and draw up a loan document showing the balance due on demand with a stated interest higher than the AFR (avoid bml rules)?

2. If you state an interest higher than AFR do you have to impute interest?

3. If you do have to impute interest, what are the entries? for book and tax? Do we actually have to pay it? Or accrual ok?

4. Also even if no imputed interest, do we still need to book the accruing interest on the demand note? If so, what are entries and does the indv record interest expense on 1040 even though cash basis?

I guess in summing up my questions, what is the right way to handle this for book and tax purposes?

Thanks in advance. andyUncleSam 09:45, 10 December 2009 (CST)

FL F1120

If there is no activity under line 21 on the 1120S does the client need to fill out the F1120?

Self-Directed IRAs

MTM -

I have been researching the various aspects of the self-directed IRA arena. Most of the items (as explained by the TPAs) seem relatively straight forward. There are a few areas that I am concerned about which I am experiencing difficulty in deriving answers.

I am reasonably conservative in that I shy away from anything that would even come close to looking like self-dealing (which is where I would think most clients want to go with a self-directed IRA)

The areas which I am perplexed about are as follows:

FMV of IRA assets - Some TPAs want cerfitied appraisels and other TPAs accept K-1s as the value for private placement companies. Such a vast difference. Also vast differrences as to the costs involved for the IRA. I cannot seem to find explicit direction from research as to what DOL/IRS require TPAs to do.

Form 990-T - Schedule F - Interest, Annuities, Royalties, Rents from Controlled Organizations. Not having much experience in the 990 realm, I am a bit confused as to the application of this section when an IRA would "control" a private placement LLC partnership which holds rental properties (even if there is not any debt on the rental properties). This seems to capture rental properties from the touted "Control your own IRA funds by setting up an an IRA owned LLC" type TPA vendors.

Would you allow me to discuss some of those areas with you ?

Thanking you in advance.

Heckster

S Corp with R E Please support my decision do an installment sale of the stock, to family members to separate out the tax impact over a number of years.

2.8 mil over 15 years, does this make sense, I know it would all be LTCG, at the corp level would there still be a realized hidden gain.

I pretty sure I know the answer but I keep looking for pit falls.