Discussion:Section 59 e(2) Election and Lacerte
From TaxAlmanac
| Revision as of 04:39, 23 April 2009 Riley2 (Talk | contribs) (If the taxpayer) ← Previous diff |
Current revision Diego (Talk | contribs) (Thank you very v) |
||
| Line 13: | Line 13: | ||
| }} | }} | ||
| + | |||
| + | {{ForumReplyPost|UserID=Diego|Date=23 April 2009|Text=Thank you very very much! This took a number of hours with support and no resolve. It was the amortization code section of 59.}} | ||
Current revision
Discussion Forum Index --> Basic Tax Questions --> Section 59 e(2) Election and Lacerte
Discussion Forum Index --> Tax Questions --> Section 59 e(2) Election and Lacerte
| 22 April 2009 | |
| I have an S Corp with a R&D expense line 12 J for 28k. It is a passive activity. If I make the election under 59 e (2) to amortize R&D Costs Line 12 of K1 over 60 months rather than having the AMT on the R&D. If I do remove R&D from line 12 and place R&D as an asset in depreciation lacerte indicates the difference between the annual amortization and annual passive income to be unreimbursed expenses on the reconcilliation statement where the depreciation expense is offset against other passive income. Lacerte does not have the answer to this. Unreimbursed expenses by scorp shareholders are not allowed and this clearly is not but the lacerte program indicates it so in the Sched E statements. | |
| 23 April 2009 | |
| If the taxpayer materially participates in the activity, no election is necessary since the tax preference item does not apply.
If the taxpayer does not materially participate in the activity, the optional amortization period under Internal Revenue Code § 59(e)(2) is 120 months for R & D expenses – not 60-months. This is not really a shareholder expense. Instead, it is an S corporation expense with a shareholder election to avoid the Sec. 56(b)(2) preference item. Lacerte will present the amortization properly if you use Screen 22 to input the asset and then tie it back to the K-1 input screen. Be sure to indicate Code 91 for SL and the amortization code section of 59. Also, indicate the asset category as “amortization” and the amortization period as 10 years. | |
| 23 April 2009 | |
| Thank you very very much! This took a number of hours with support and no resolve. It was the amortization code section of 59. | |
