Discussion:Basis in Partnership and 1099 MISC
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| Revision as of 20:11, 15 February 2008 KristieL (Talk | contribs) (Thanks. She is) ← Previous diff |
Current revision Vickytown (Talk | contribs) (Kristie: The LL) |
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| She also added this additional information, but it still doesn't clear up this muddy mess. She said the shares (partnership interest) were deferred from 2006 and not paid out until after the divorce in 2007. Some tax planning strategy from their CPA when they were married. She says he has to also pick up the other half of this income (but included in his W-2) on his tax return this year. Hopefully, the divorce agreement will clear this up.}} | She also added this additional information, but it still doesn't clear up this muddy mess. She said the shares (partnership interest) were deferred from 2006 and not paid out until after the divorce in 2007. Some tax planning strategy from their CPA when they were married. She says he has to also pick up the other half of this income (but included in his W-2) on his tax return this year. Hopefully, the divorce agreement will clear this up.}} | ||
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| + | {{ForumReplyPost|UserID=Vickytown|Date=16 February 2008|Text=Kristie: The LLC may have filed an election to be taxed as Subchapter S, thereby paying members "reasonable compensation".}} | ||
Current revision
Discussion Forum Index --> Basic Tax Questions --> Basis in Partnership and 1099 MISC
Discussion Forum Index --> Tax Questions --> Basis in Partnership and 1099 MISC
| 15 February 2008 | |
| Background : Husband and wife divorced in 2007. Wife is my new client. Husband worked for an LLC (according to my paperwork it is a partnership, but received a W-2 for wages (That's another question their getting back to me on). As part of the husband's compensation package he received partnership basis (she keeps calling them shares) each year. Since they were divorced, she was entitled to some of this basis.
Question : For 2007, the wife received a 1099 MISC for $ X,XXX as Nonemployee Compensation for her share of the partnership basis (FMV) of worth. I know that she has to pick this up as income, but my question is ... should this be taxed as self-employment tax? He had the FMV included on his W-2 in the past. Where can I find some guidance for this type of situation? Thank you. | |
RoyDaleOne (talk|edits) said: | 15 February 2008 |
| A property settlement in a divorced is normally tax-free. If that is the case no 1099 should have been issued, as no 1099 should have been issued anyway.
Why can the husband not get a W-2 as an employee of the LLC? An owner of all or part of an LLC is normally called a member, and ownership is normally a member's interest. A LLC can issued certificates of a member's interest, similair to shares. The husband receives membership interest each year and may or may not have any basis in such interest. | |
Death&Taxes (talk|edits) said: | 15 February 2008 |
| I would strongly suggest you ask for a copy of the divorce agreement; Roy is right, it makes no sense for her to be issued a 1099 if this settlement was part of the divorce. | |
| 15 February 2008 | |
| Thanks. She is working on getting the additional information I need.
She also added this additional information, but it still doesn't clear up this muddy mess. She said the shares (partnership interest) were deferred from 2006 and not paid out until after the divorce in 2007. Some tax planning strategy from their CPA when they were married. She says he has to also pick up the other half of this income (but included in his W-2) on his tax return this year. Hopefully, the divorce agreement will clear this up. | |
| 16 February 2008 | |
| Kristie: The LLC may have filed an election to be taxed as Subchapter S, thereby paying members "reasonable compensation". | |
