User talk:JR1
From TaxAlmanac
| Revision as of 23:02, 30 November 2007 Taocpa (Talk | contribs) (LLC taxed as S Corp.) ← Previous diff |
Revision as of 23:56, 5 December 2007 Inagpurwala (Talk | contribs) (Interest on tax due) Next diff → |
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| Tom O'Connor | Tom O'Connor | ||
| tao.cpa@verizon.net | tao.cpa@verizon.net | ||
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| + | == Interest on tax due == | ||
| + | |||
| + | Hi JR: | ||
| + | My client receivedd CP2000 for tax year 2005. I did not prepare this client 2005 tax return. Client forgot to file and include Sch D income. | ||
| + | |||
| + | I have calculated the amount what shoud have been reported. That will reduce client's refund amount (already received). | ||
| + | Should I calculate the interest on this extra tax or let IRS do it? | ||
| + | |||
| + | CP2000 instruction spefically says that not to file 1040X, just provide the explanation for the changes. | ||
| + | Which is OK with me, I will put difference looking at 1040X. | ||
| + | |||
| + | This is my first time case to get involved with interest on under reporting tax in my last 20 plus years of doing business. | ||
| + | Also ProSeries did not calculated the interest. Which I think I do not have entered anywhere. | ||
| + | Please e-mail me your thought to inagpurwala@yahoo.com | ||
| + | |||
| + | Thanks | ||
| + | |||
| + | Ishaq[[User:Inagpurwala|Inagpurwala]] 17:56, 5 December 2007 (CST) | ||
Revision as of 23:56, 5 December 2007
This page is where you can leave a message for JR1. JR1 will be notified of messages the next time they access TaxAlmanac.
Please make sure to sign your message by adding four tildes: ~~~~ at the end of your message.
If you are actually JR1, this is your page. Feel free to edit your discussion page to add or remove anything you'd like.
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.
As you begin to interact on TaxAlmanac, your changes will be linked to your personal user page. We encourage you to edit this page and add a short description about yourself. This will allow others to better understand your background and qualifications as they review any replies or information that you submit. I see that you've already added information to your user page - thank you!
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I hope you enjoy being a member of the TaxAlmanac community! If you have any questions, see the help pages or ask me on my talk page. Again, welcome!
- Tim Doyle, TaxAlmanac Moderator 09:45, 9 March 2006 (CST)
Your User Page
Yes - that is where you give a little background about yourself.
- Tim Doyle, TaxAlmanac Moderator 09:45, 9 March 2006 (CST)
Farm Pond
I'm being literal today. So . . . you think it's not a depreciable land improvement?
HUD Discussions
JR1:
Thank you for bringing this to my attention. MEJungman frequently helps out by fixing spelling or capitalization problems. This is what he was doing with the HUD discussion. I think what happened here is that there are actually two HUD discussions. Take a look at both Discussion:Rental Income Received from HUD Taxable? and Discussion:Rental Income from HUD Taxable?. I think the missing posts might be on the second one. Please let me know if you still think there are missing posts.
Thanks!
- Tim Doyle, TaxAlmanac Moderator 11:25, 25 March 2006 (CST)
PSC or S corp?-reply
received your answer to my question regarding filing a PSC as S corp..your answer was that there are only two types of corporations, C and S..yet,the IRS reg's 1.444state that "PSC" pays a flat rate of 35%..since I have had no luck finding the Reg in the US Code, I am confused as to how an attorney I know is filing as an S, and not a C/PC..I do appreciate your feedback; and thans for your earlier responseSwannie 23:26, 29 March 2006 (CST)
desperate housewife here..
Hey..would you be willing to do my tax return??? Only thing is..you are far from me...does that make a difference? and what about helping me set up for 2006? do you use Quick books, etc....let me know...thanks.
hey there
Thanks Jeff for getting back with me..when would be a good time to contact you..and of course what is your rate...and could you help me with my 2006 "stuff"....thanks. hope you had a great dinner with bride and son..its the little things in life that make it good......as for me..i am going to take my 15 mo. for a stroller walk...did I tell you she is the smartest little baby that ever lived? and the prettiest?? haha...have a great weekend. Jeanne.
No efile
Virtually all my paid returns are 1041's and 706's. My client base is essentially lawyers and CPA firms and what I do for the latter, they usually sign. Also Photocopying and assembling is an essential part of my review process.
production credit
JR
Thanks for the response. Do you a code/reg. section re: credit
SEP
So, you are still up. Would you please look at my last "Panic" posting? I'm not sure what to do. And of course my tax library says that it has "expired." What wonderful timing! 22:32, 14 April 2006 (CDT)~Natalie
"self employment earnings"
i have 87,000 as "self employment earnings" on the k-1...can i put the max allowed into a sep and deduct that...what time constraints do i have...i have filed for an extension....i am 61...thanks--Gordons1 21:50, 15 April 2006 (CDT)
Green Bay in winter
Hi JR,
Well, I'm from Wisconsin, but I can't say I'm familiar with the area you refer to for hunting. I'll be staying in Waupaca, which is about an hour or so west of Green Bay. Hunting season is pretty much done by Christmas, though, isn't it?02:04, 18 April 2006 (CDT)~~Natalie
Don't disagree with JR1 - Offending!
Hi JR1, Sorry for responding late to your comment on my user's page. You DID NOT offended me at all. I made that comment "Not to disagree with JR1", because your answers are always corrent and to the point. You also mention IRS Pubs or Reg # for reference along with the answer, which makes easy for others.
I hope this clears the misunderstanding.Inagpurwala 11:12, 21 April 2006 (CDT)
CPA / EA
JR1:
Are there other 'groups' that I should create similar to the CPA and EA groups? What about a designation for a simple professional tax preparer?
Thanks!
Tim
ID Number Issue
Sorry, I'm new at this, (the site interaction thing), But isn't that form for employment tax purposes?
I think you opened a can of worms by talking about the various form of business. I guess this discussion will last 2 weeks!
Thank you!
I very much appreciate you jumping in! I'll go adjust the formatting. If you think of any others, or have any for any other states, feel free to add them too.
Thank you!
- Tim Doyle, TaxAlmanac Moderator - Talk to me 10:00, 20 June 2006 (CDT)
Michaelstar's Spreadsheet
It looks like User:Michaelstar answered your question, but he replied on his own talk page at User talk:Michaelstar, so you may not have seen it.
- Tim Doyle, TaxAlmanac Moderator - Talk to me 10:16, 20 June 2006 (CDT)
Thanks!
ThanksSue Wells 19:39, 20 June 2006 (CDT)
Employee vs Contractor
If the employee should receive $600 or more than at year should the 1099 or W2 be issued ? As for the same person week to week, the may continue for 2 months than another is employed and process repeated .
Thanks
Sale of Rental Properties
JR: What is TIC property? Probably will recognize it after I see what the acronymn stands for. Thanks, ShirleySkq9545 12:28, 21 June 2006 (CDT)
TIC
JR: I just figured it out going through a tax class I had - TIC = Tenants in Common. ShirleySkq9545 14:53, 21 June 2006 (CDT)
"Making" an LLC
JR1,
Thanks again for the frequent responses to my LLC questions. I don't take much personally...i'll be the first person to admit when I don't know something, and that's why i'm here - to learn from my fellow CPA's and tax professionals, and also give my own two cents where I can.
I just recently had the chance to advise two potential clients who are LLC's, and I had not had much experience with foreign members of LLC's. Hence my questions...
My background was as a tax manager at KPMG in the 90's...I didn't deal too much with LLC's, as they were not as popular as they are now. I started my own practice 3 years ago, and am really starting to gain more corporate clients. (really trying to limit the 1040's and focus more on business work because of better issues and higher fees).
In any case, thanks for the info, and also calling me out on my choice of terms. :)
Early withdrawal of retirement
Jeff,
Thanks for your take on this subject. I have a similar situation and have really been kicking this idea around myself. My husband and I are dicussing moving from a dual to single income family, and I am the primary bread-winner (I have some medical issues making it difficult to work, but I'm not quite at the disability status). We would be reducing our taxable income by about 2/3. We have just under $30,000 in debt between vehicles and credit cards. We are paying next to nothing in interest, but the payments alone would make this move unmanageable. I am only 30 and plan to return to work and rebuild my retirement at a later time.
We've thought about a home equity line, but at 10% interest stretched over 15 years or more to make the payments manageable, I would be paying out an astronomical amount. I've also rationalized that the penalty we're paying was never really "my money" to start with because we have a good matching/profit sharing plan.
So how low is LOW when it comes to the tax bracket? Everyone I've heard ask this question doesn't mention anything about the cashing out having to do with a significant reduction in their taxable income. I think if I could hang out at my job until the first of the year and then do this smartly, we could make this work.
What are your thoughts?
Thanks, Kim
Practitioner Contacts
I've removed the Practitioner Contacts page from the menu structure. I'll check with our tax guru to find out if these numbers are public or not. That info was put there by another TA user.
If you're trying to sign your name, just use four tildes, like this ~~~~.
- Tim Doyle, TaxAlmanac Moderator - Talk to me 15:19, 12 July 2006 (CDT)
Practitioner Contacts 2
JR1:
I asked our Senior Tax Consultant, Mike Davolio to take a look at the Practitioner Contacts page to see if it should be removed or not. He found that they are on this publicly viewable IRS website page. Because of this, he didn't see any issues with them being on TaxAlmanac.
Thank you again for letting me know about this. I appreciate it!
- Tim Doyle, TaxAlmanac Moderator - Talk to me 10:53, 17 July 2006 (CDT)
accumulated earnings tax
if a C corp has made about $400,000 (loss $50,000 prior year, retained earnings = $350,000)from its security investmnet in a single year and decided to retain it, does it trigger the IRS audit? I have read some articles mentioned about $250,000 or less to be a reasonable amount. thanks.
Thank you!!
Thank you JR and also thanks to so many people here. Today has been especially tough for me as this client is also a friend of mine. I think that is where the lines got crossed and I had to take a stand ethically against a friend of mine.
He just called and he doesn't understand why I won't represent him further. He is upset and saddened as am I. If I could only make him understand that the laws of the US are not bendable when it comes to paying illegal aliens and hiding money.
What do I do now? I don't want to lose his friendship ever and I have offered to continue paying the bills and making deposits into the US account without a professional engagement with him.
What say you?
Signed;
Sadsack...hehehe aka Sandy
self-employed health insurance with W-2 employees
Sec 83 does not deal with this issue. I would appreciate it if within the next week you could find me the section that does. It is not a rush but I would like to put it in the file to document our position. Thanks
Construction - Lookback method
I didn't thing that anyone would go to this much effort on the question. The information that you provided was really valuable.Thank you.
KBost
Gift Exemption
Thank you JR1. Lnevis
JR1
Have you had any logoff problems this morning?
Thanks!
Tim
Log off Issues
Thank you - I hope we found the issue, but if not, we'll keep working on it.
Tim
New Forum View
JR1:
I've created a new forum view that shows the discussions in ALL of the discussion forums. This is valuable for people who want to stay up-to-date with what's going on in the TaxAlmanac discussions regardless of if they are in the Tax Questions or Accounting Questions forum. Take a look at Discussion Forum - All Topics and let me know what you think.
Thanks,
- Tim Doyle, TaxAlmanac Moderator - Talk to me 16:46, 19 September 2006 (CDT)
Date Field
JR1:
That's actually easy to do. See Discussion Forum - All Topics now. However, this is something that we intentionally changed to make it easy to read. I'll admit that I had not thought of your use for the timestamp. I changed it here to show you what it'd look like if we switched, but I'll probably change it back and then ask the community for their feedback.
Keep sending me your thoughts - I appreciate it!
Tim
Travelling again...just wanted you to know :)
Well I am off again to Maine on Sunday for 3 or 4 weeks. Don't want people to think I fell off the face of the earth!!
Talk with you soon!!
Thanks for everything JR :)
Oh you can BET no Canada for me!!
Maine is so beautiful and I can't wait to go. Lobster is on the list believe it!! hehe
Not yet my friend :)
HEHEHE; How I WISH I were in Maine...leaving early early Sunday morning; lets say about 3:00 a.m. Doing the driving thing so I can see the country so to speak :)
Thanks for noticing me still here *blushes*...hehehe
I have a Partnership that has converted to an S-Corp. How do I transfer the Assets of the Partnership to the S-Corp and also report the $70K in unrealized receivables. When and where do I report the Income. Should I include in partner equity accounts when I dissolved of the Partnership or transfer to S-Corp and then pay the tax? The Partnership is a cash based company. Thank you for any help you can give. I'm working against the horrible deadline.
On the balance sheet, how should I dissolve? Write everything down to the Capital Accounts?
Partnership to S-CorpPBERRY 20:31, 7 October 2006 (CDT)
I have a Partnership that has converted to an S-Corp. How do I transfer the Assets of the Partnership to the S-Corp and also report the $70K in unrealized receivables. When and where do I report the Income. Should I include in partner equity accounts when I dissolved of the Partnership or transfer to S-Corp and then pay the tax? The Partnership is a cash based company. Thank you for any help you can give. I'm working against the horrible deadline.
Also, how should I dissolve the Assets & Liabilities on the Form 1065
PLEASE HELP ME
I have a Partnership that has converted to an S-Corp. How do I transfer the Assets of the Partnership to the S-Corp and also report the $70K in unrealized receivables. When and where do I report the Income. Should I include in partner equity accounts when I dissolved of the Partnership or transfer to S-Corp and then pay the tax? The Partnership was a cash based company. Thank you for any help you can give. I'm working against the horrible deadline.
PRTNR T0 S-CORP
I'm sorry, what does "answered on your page BP..." stand for? I sent you an e-mail from my personal e-mail,could that be the place? Mr JR, I see you answering folks all over the place, please know that you are extremely appreciated. I know how this time of year can be.
loans from shareholder to s-corp
thanks for the response but have another question for you.
if i disolve without paying, is the balance of unpaid loan, capital gain on k1 to shareholder? yes, notes are fully documented. in this case, both ways are capital gain to shareholder - right?? can i convert the loans to paid in capital. if so, how?
thanks so much.
Partnership loss
Hi JR1,
Thanks for replying to my partnership loss question. So One of the partners is going to get 100% of the loss so do I give the other partner a K-1 with all zeroes?
loans from shareholders
thnaks jr1 -
this was thrown in my lap and i have no experience in dissolutions. i am tempted to take this whole thing to a CPA. yes, the balance of the 8k will show on k1 - as a net capital gain since loans from shareholders were reported on tax return of 05. the 2k will wash itself out.
i also have another issue - i have a/p accounts on the books for expenses make by shareholders on behalf of s-corp. these have not been paid back since there was not enough income. will these a/p/expense accounts, now be converted to loans from shareholders and also capital gain to the shareholders on k1?
Hmmmmmmm
Hey JR!!!
Got in late last night....want to go back...the NE is soooo beautiful....
No lobster this time alas :(
But sure brought back some native vodka and rum from Nova Scotia.....
Got some pics...want any?
GO PATRIOTS!! and have you watched the BEARS? They are whoooping asss!!!!
Just wanted to show you this!!
Hey JR;
I got sent an email today from a very close friend on a website and I have shared it with my email friends. Just wanted to give you the link to check it out...very inspirational!!
www.the212movie.com
Installation Sale ?
JR1- Is there an "installment sale" for a client that plans to seller finance a plot of Land ? Also, as the payments are received, would this be original income. The client is not a real estate investor. Thanks.
thanks for the
JR thanks for the virtual tutorial today on the LLC's. You really helped put the pieces together for me. Take care. CrowJD.
i forgot the tildes
--CrowJD 21:24, 1 November 2006 (CST)
THE BEARS!!!!!!!!!
What is up with this? The bears are undefeated but yet, they are losing today to the Dolphins who has played virtual bad football all season....
Just an AARRGGHH even though I am a south floridian...I love the bears!!
THE BEARS!!!!!!!!!
What is up with this? The bears are undefeated but yet, they are losing today to the Dolphins who has played virtual bad football all season....
Just an AARRGGHH even though I am a south floridian...I love the bears!!
Sandy
Your mom
Hey JR;
So...your mom is in Stuart? That is very close to me. Please let me know how she is doing, k? Any surgery even minor can be very scary....just know that I will be thinking of her :)
Sandy
Business Comp software
JR1,
A couple of months ago you had a post that referenced a business comparison/industry comparison software package. I thought you wrote that it was part of QB, maybe? I can't remember but I wondered if you remembered the software package name?
Thanks...Mike
How is your mom?
Sandy
Your mom again
Well then...this is good news....I think something in FL is causing people to be ill....I know that I AM SICK OF IT!!!
BTW: I have pictures from Maine if you are interested...I wish there were a place to post pictures, etc. here, but I guess that would be "non bean counter like" or something like that...hehe
Anyways, please know that I will be praying for your mom....
Alternative Minimum Tax
How do you know there are only three guys in the country that knows about the AMT, and who are these three guys?
Sch C to Sub S
Good morning,
I just want some clarification on the 351 transfer of assets & notes payable from a Sch. C to an S-Corp. Situation is this: Trucks & equipment NBV are around 200,000, loans are around 100,000. Some of the trucks are fully depreciated, but still carry notes. (Don't ask how/why-previous tax preparer deducted mileage AND actual expenses!!!.)
I believe I transfer the assets at lesser of FMV or book, & transfer the notes at principal balance. But do I do it in total? That is, on the eqpt that's fully depreciated, the taxpayer is transferring zero basis, and being relieved of a liability. Is this "gain" taxable? When I read Sec. 357(c)(3), concerning liabilites assumed, I am a bit confused. When I transfer these notes, they do not create/increase an asset. Give rise to interest expense only. Therefore we leave the N/P's out of the equation????? I'm confused.
Also, an unrelated question. If the Sch. C "rented" the equipment/trucks to another C-Corp, would this be SE Taxable? It appears to me this is the rental of personal property.............
Thanks so much for any reply.
Pam Papp k10smartax@prodigy.net
Need your help
I need your help. I am trying to get people to fill out their user pages. Could you reply to the "Who are you?" discussion and just say that you have added information to your page?
Thanks!
- Tim Doyle, TaxAlmanac Moderator - Talk to me 11:56, 5 December 2006 (CST)
Difficult Times
JR1:
My thoughts are with you in this difficult time.
Tim
Zorro Picture
Unfortunately, I had to delete your Zorro picture due to copyright issues which are described on our Website Use and Contribution Terms. I wish I could allow content like this as I think it adds personality to the user pages, but if I did I wouldn't be doing my job.
Sorry about that,
Tim
Merry Christmas JR!!!
Hope your mom is doing ok after surgery. I hope your Christmas season is full of everything you hope for and hold dear this time of year.
Thank you for every post!!
Sandy
Thanks
Thanks for the response on the 'Dissolving Corporations' discussion. Always nice to hear how things are done in practice as apposed to to just straight book knowledge.
William Price, EA | Portland, OR - Talk to me
Something funny in DEnmark?
This site is goofy today :)
Deb has responded to hundreds of questions the last day or so at least on my screen, but only a couple of responses are noted? And what is this about the 1099 for child?
What's happening?
JR1:
I looked through the logs and I don't see any recent edits to that discussion other than yours. Can you describe what happened?
Thanks!
- Tim Doyle, TaxAlmanac Moderator - Talk to me 17:54, 8 January 2007 (CST)
Browser Setting
Interesting - What browser? If changing it back fixes things, let me know what & where the setting is so I'll know in case others have a similar problem.
Thanks!
- Tim Doyle, TaxAlmanac Moderator - Talk to me 17:59, 8 January 2007 (CST)
By the way...
Sandy mentioned earlier that the site was goofy today because Deback was replying to discussions, but nothing was there. Deb has actually been adding categories to recent discussions. Look at one with LLC in the title, scroll to the bottom, and click the LLC category to see an example of the great work she's doing.
- Tim Doyle, TaxAlmanac Moderator - Talk to me 18:00, 8 January 2007 (CST)
film accounting
Hi JR1
my instinct tells me that you know a lot about film accounting. my client launched shooting a movie recently as a co-producer and director of cinematography. I am brand-new to this industry and want to know how i account for all the expenses. do i expense everything or do i capitalize some of the expenses such as script fees or something else? There is no income right now since it's still in production. the budget for this film is under a million. if there is anything else i need to pay attention to with regard to film accounting and preparig tax return for this entity(LLC), any information will be really helpful. Thank you so much for your help in advance.
Peter
Adding Categories
Hi JR - Thanks for helping out with the categories! I wanted to mention that, if it's easier for you to add categories on the line under the last category, it can be done that way. I discovered, after I started this a week ago, that it was easier for me to do it that way, because I was copying and pasting the categories, and it was easier to highlight one line (in order to copy one category to the clipboard) than trying to highlight one category that was listed with other categories on the same line. It doesn't matter, though. Whatever's easiest for you. Thanks again!
Deb Deback 20:36, 15 January 2007 (CST)
Categories/Michigan
I'm in a little city called Potterville, which is 12 miles south of Lansing and 6 miles north of Charlotte.
When I want to see what categories are already set up, I'll right click the word Categories at the bottom of most pages and open in a new window. Then I have to click on 250 to get a list of all of the categories on the same page. Adding Restaurants and Realtors was a great idea. What I do, after clicking on the red category link, is either type (in the empty box that opens up) "& n b s p ;" without the quotes and spaces or [[Category: Individual]] or [Category: LLC]] or [[Category: C Corporation]] or [[Category: S Corporation]] or [[Category: Partnership]] or [[Category: Credits]] or [[Category: Expenses]]...basically, I try to add a main category to the new category. Then the new category will be listed in the main category. I'll enter & n b s p ; if there is no category already set up to link the new category to, or when I'm in a hurry. Thanks again for your help. My energy level seems to be lower this week, so I haven't been spending as much time here so far this week.
MI
Interesting! We used to go to Gun Lake when I was a kid...somewhere over by Hastings, from what I remember.
Categories
For example, in the current inventory discussion: I added a new category called Inventory to the discussion. Then I added the following to the new Inventory category: [[Category: Sole-Proprietorship]]. When you click on Inventory at the bottom of the discussion, it takes you to the Inventory category, but the Sole-Proprietorship category now has a new sub-category called Inventory. This was the most confusing to me when I started adding categories...trying to figure out what went where, and it's still a little confusing at times. So, I try to add specific categories (Inventory, Restaurants, Fishermen, etc) to the discussions and then add main categories to the specific categories. By the way, click "Edit this page" to see how I typed the above category string into this message without it resulting in a link to the Sole-Proprietorship category.
Categories, continued
Of course, Tim taught me all of this. He deserves all the credit for adding categories.
Efiling Illinois Forms
Hello JR1 !
Are you a ProSeries user ? If so, have you efile to the state of Illinois yet ? I've been trying to get someone from ProSeries to interpret what "final version of IL1040 ready for efile, but final IL8453 NOT ready until January 30th" means. It's my understanding that the efile packet to the state consist of both forms IL1040 and IL8453. Comments are welcome.
Chet -
No Need to Apologize....
Jeff,
...but thank-you for doing so! I just read the message you left me, and I should apologize to you. I kind of knew I was asking a stupid question and got frustrated with the reply! I'm sorry I lashed out, after all I knew all along you did know the answer!!
Thanks for the Gator love, maybe my contribution to the forum can be a little Gator karma!
If you have a minute I'd like to explain my situation. Yes, I'm a CPA but I have worked in corporate accounting, financial not tax, the whole 13 years I have been licensed. About 4 yrs ago I decided I wanted to do taxes and small business acctg. I worked with an old colleague who had a small practice and after 2 seasons he offerded me his clients as he was retiring. I thought with him as a resource it would be no problem. Unfortunately he hasn't been much of a resource either in time or knowledge. I've actually found several mistakes he made on returns - some fairly obvious. But I've decided to push on, juggling a 40+ hr per week job with trying to learn/do taxes on the side (not to mention QuickBooks). But I'm very honest with my clients, and with myself. If I feel I'm over my head I won't hesitate to tell them. It's not about the money right now, it's about gaining experience. If I could afford to leave my day job and go work in an accounting firm as a jr. preparer I would do in a heart beat. As it is I owe it to my family to keep making my corp. salary. I'll just have to learn on my own. I may take an EA prep class - I've printed tests off the IRS web site and it's a pretty comprehensive exam.
In the mean time I'll watch and learn. One thing I know for sure I will never forget is that A SOLE PROP. CANNOT BE ON THEIR OWN PAYROLL!!!!
You're a hell of a smart guy - you deserve the respect you get on this forum!
Take care !
Doug
thanks a lot JR1
Hey
Jeff,
Thanks for the pep talk! The business isn't too bad, noting too complicated (yet). I'm not soliciting new clients either until I have more time which means when I'm ready to try it full time. I have a professional consultant for issues I haven't come across before. Someone who saw one of my questions on Accountants World and solicited me via e-mail. It generally works OK.
I've purchased many books/courses the past couple years. Well over my CPE requirement. I'll look into your recommendations.
There's a Riley on the CCH discussion board, I'm pretty sure it's the same person.
You're right about family. I have a daughter in college (FSU, yuck) and a 4 year old daughter. The 4 yr old is always in my office. She draws pictures and every 2 minutes says "look Daddy". I love it!!!!
Doug
Owning property with an S-corp: not your usual question
JR1,
I have been searching all over the internet on this topic and you seem to come up quite frequently. If you have a moment, I would apprecaite any insight you could throw my way regarding my situation.
I am a small business owner. My business, a s-corp, generates about 225-250k per year and runs about a 50% profit margin. I live in arizona and I recently have been given an opportunity to purchase a property in mexico at a reasonable price. Since I would use this property to entertian clients, I was wondering if my company could purchase it and pay all of the expenses (this assumes that I would qualify for the loan). I have read, time and time again, that this is a bad idea --- but I don't really see why in my specific case. The company is just me and I am not looking to expand. Your thoughts would be greatly appreciated...
TELEPHONE TAX CREDIT
WHERE HAVE YOU PUBLISHED YOUR COMMENTS REGARDING THE TELEPHONE TAX CREDIT?
telephone credit
JR
My name is Matt A CPA in NC, where is your position published? I am curious .
I developed a quick spread sheet for my practice, it takes the annual telephone cost and complete s the form input in 1 second.
I am curious on your position. E mail me at southparkcpa@yahoo.com and I will share the spreadsheet with you.
Matt
Can I please whine????
Well...today it actually happened!! I was finally insulted by an EA in Vero and I am feeling so discouraged right about now. Wanted to post on the forum, but it is sort of private I guess and just needed a pep talk :)
My practice is still a small one...I have not advertised or even looked for work much this past year. I have been busy "helping other people"...just who I am I suppose and now we are in the busy time.
An EA in Vero called me the other day...wanted to know if I would think about outsourcing from him or working part time for him this tax season...he has some returns he is struggling with and only has one admin person and 2 staff people...both from India, neither of which speak English well....
Anyways, I saw him this morning....he has a TON of work for me....50 + hours per week at present....
He said before offering me a number..."I don't want to insult you, but I also want to be fair"....
$12.00 an hour!!
YAY for me!! I looked right at him and said "I am sorry but I decline"...he went to 13, 14 and then 15.00 and I still declined....He said...I thought you NEEDED to work? I said, yeah, I NEED to work, but I can't do it for that amount....we parted ways....
Naturally, I soooo need the money that I almost called him back and said, ok...I will take what you can give me...but here I am and I refused green dollars....
Before I went to see him I prayed asking that God open a door for me....I called my son right after and my son said....oh Mom...God did open the door. He opened it that says....you now can have the courage to say NO....something I have never been good at....you most likely already know that from my previous clients, no?
Anyways....I am asking you (as a believer) to just say a prayer for me if you will....just need to get my head right and go out there and make it....I give at least 20 tax returns away each year to the indigent (kids, elderly) and now I need to make a living....go figure!!
Thanks for letting me vent to you!!
Oh BTW: He was very impressed with my "tax and accounting test"....I told him about tax almanac and the wealth of information here!! Who knows? He wrote down the site and maybe we will see the cheapskate here...hehe
Thank you my friend :)
A Little help please?
Fairly new and a little bit rusty on some of basic tax rules. Took the leap to open own practice. Got a new client is indep't contractor(Sch C) for one of the delivery services UPS, FEDEX,....etc. Purchased delivery truck, the size of brown UPS delivery trucks, in Sept/2006? The question depr(179), as well as actual expense gas,oil,etc... delivery truck is 100% use can all be entered in Sch C. Would you mind a little guidance for "the new guy" and I know one day I will no longer be the "new guy" of which I will definetly help other "new guys"
Obvious answers/don't mean to bother you JR
Tp sold ins in Oct/2006, however, did not receive 1099 from ins compny. Tp has a copies of chks not to exceed $330 and has expenses of $2000 advertising, laptop, leads, etc.... I would like to take loss(Sch C) and transfer to 1040 to lower taxable. Am I on the right track. Thanks JR and God Bless!!
Mcharg5
Help calculate % per depreciation
Hey JR1,
I'm back at you again. Tp converted personel home into rental approx Oct/2006. How would I figure percentage of depreciation, for last 3 months of the year. Example, earlier client had similar situation Oct/2006 and in Straight Line MM for % of business use I inputted 100% was I correct. I understand about splitting mort int per personel and rental its just depr'n of which I could be looking/thinking to hard. Thanks for your time sir!
Per depr'n on rental Oct/2006
JR figured it on my own via Qfinder whats great is another notch on my belt. Thanks for your input JR "you the man". Just real quick a little while back read your opinion per real estate agents and 100% business use autos. Great concept and "nice tax moves"!!!! Thanks again chief----until next time.
Father answered!!
Jr...I am so confused. I had a CPA in Pt St Lucie ask me to help him with tax season...many unique returns I have only heard about let alone done....he will pay me $25.00 an hour to assist. Then, my contact in Vero called and would agree to the 25.00 an hour...he needs SOMEONE!! My gut told me to take the new person...he is 67 yrs. old and wants to retire in a few years and possibly sell his practice to me....I want so much to make this a go with the new person...he is on the board of AICPA in Florida, but yet....since he has such complicated returns, I am nervous.
Please keep praying with and for me!! I got 3 new clients today on my own....but I am still scared :)
Thank you as always JR
Sandy
Log Out Issue - Still a problem?
A while back, you indicated that you were affected by the "log out" issue - where TaxAlmanac would "forget" you and you had to log in again, fairly frequently. We think we found the solution, and I wanted to find out if this has been solved for you or if it is still an issue. I know you're busy with tax season, but if you could leave me a quick message, I'd appreciate it.
Thank you!
- Tim Doyle, TaxAlmanac Moderator - Talk to me 14:25, 17 February 2007 (CST)
Gay Clients
No, I wasn't offended at all and was just kidding around. But I couldn't tell if you were saying you didn't want gay clients or not. I do know that my brain doesn't work very well until after I'm up for awhile. Anyway, I shouldn't have posted that message. :)
thanks
Thank you for the comment, I asked because I was curious to why my employer wouldn't withhold the correct amount. I guess I will assume it was an error, well multiple errors.
Auncle
I wonder where the Aunt was through all of this. I liked your response and couldn't think of anything better to say than what you and Kevin said. Anyway, I happened to come across something the other day and just thought of you, so I thought I'd send you this link:
Suze Orman Reveals She is the '55-year-old Virgin'
Ya just never know, huh?
Deback 12:34, 25 February 2007 (CST)
I might have found a bug within the Proseries Illinois Software
JR1 (Jeff),
I trust your tax season is going well. Just to refresh your memory, I have written you a few time regarding tax matters. My name is Chet (screen name Truthseeker). I also live in Cary Illinois. I am writing you because I have encountered an error within the Proseries Illinois software and can't seem to get any help from Intuit's tech support. Here's the issues, see if you can recreate:
Problem: The TP received unemployment compensation in 2006. She received an Illinois 1099G. TP, also had federal and state withholding deducted from payments. Using the Proseries 1099G worksheet, I entered the unemployment compensation amount on line 1. Afterward, I entered federal and state withholding on lines 4(a)(b). Everything in federal checked out fine. Performed a final check in the state, no errors. However, when I performed an Efile state final check, the program flags the file with an error(w2; w2G not allowed by state).
WorkAround Solution: I removed the 1099G state withholdings and move the amount to an estimated payment worksheet. This seem to work for the state's final efile check. However, I've encounter another problem. The state of Illinois Department of Revenue sent a letter to the TP informing then of a error on their 2006 tax return. They told the TP that they made a correction on their return, and the client would be getting an additional $60. Very strange assessment by the state, the numbers don't gel. Based on my manual computation no way the TP should be getting additional funds.
JR1- Don't mean to bug you, just wanted to know if you are having the same software problem for the state of Illinois. Write back if you can help.
ps: If you are able to re-create or are having the same problem, do you think I could get Tim Doyle to help contact someone within Intuit Proseries organization?
Sincerely, Chet
--Truthseeker 10:59, 28 February 2007 (CST)
RE from S-corp to LLC
Hi thanks again for your help with this, I really appreciate it. I posted this this morning. Harlan
Since I appear to be missing something, allow me to restate the facts as I understand them: (i) S Corp has 4 properties, each one holding a different business of the taxpayers; (ii) prior to the 2006 "LLC spin-off", 2 of the properties were titled in the name of the corporation and two were titled under the names of the two individual shareholders (but are recorded on the corporation's books); (iii) sometime during 2006, the 4 buildings were transferred ("spun-off") to LLC's and title was recorded in the name of each LLC (note: from a tax perspective, the corporation contributed assets to LLC's and distributed LLC interests out to shareholders or corporation distributes assets out to shareholders who, in turn, contribute assets to the LLC's); (iv) all 4 LLC's are owned 50/50 by the two individuals. Some comments:
Ownership of the two individually-titled properties: although title to the property is a key element, it is not the only factor in determining ownership for tax purposes - a "benefits and burdens" analysis might produce a different result depending on other facts (is the S corporation paying property taxes, mortgage, maintenance?, etc...); Because the individually-titled properties have been reflected on the S Corp tax returns, presumably you will have to record an M-2 adjustment ("Other Decrease") to get the assets (and related liabilities) off the returns without showing a distribution (or sale). Depending on the size of the adjustment, this could raise the audit flags; Corporate-titled properties: with respect to the 2006 "spin-off" to the LLC's, it appears that you have a couple of options (i) recognize a 311(b) gain on the distribution of the assets, or (ii) check the box on the LLC's to make them corporations in order to accomplish a 355 spin-off. If (ii) is applicable, this could work provided that you make the check-the-box election in a timely manner - you haven't indicated the dates of formation for the LLC's, so it's not clear if this is still possible [note: if (i) is applicable, checking-the-box on the LLC's makes no sense (you have already recognized the gain once, checking the box only puts the taxpayers right back in the same position)]. As for depreciable basis with respect to a 355 spin off - assuming that you qualify for one - you would treat as carryover basis.
HLCPA (talk|edits) said:
1 March 2007
Thanks again for all your input, I GREATLY appreciate it. I have 2 last (hopefully) questions. Now that I am getting into the numbers, I see that the mortgages against some of the properties are more than the net book cost (cost - accum depr) for 2 of the 4 properties.
One owned personally has cost 634,000 and loan 884,000 One owned by corp has cost 344,000 and loan 417,000 One owned by corp has cost 1,096,000 and loan 901,000 One owned personally has cost 1,416,000 and loan 1,279,000
I was able to get S-election for the two with the corp ownership.
My question is how I would book this on the old corp and on the new entities. Would I book the net between the cost and loans as "property distribution" or "shareholders contribution" depending on whether the loan was more or less than basis? Or some other way?
On the new entities, would I book the cost and accum depr as of transfer date,and loan payable, and make the balance members contribution for LLC's taxed as ptnship, or I dont know what on the LLC's taxed as S-corps? What would I put the net to? Thanks again.
Apology
JR1: I made a bad attempt at being tongue-in-cheek regarding my rant on the C-corps and K-1s thread. I figured since the OP did not have a profile you were assuming another person with an extrordinarily lacking amount of tax knowledge. (And you are right, there have been some pretty nutty posts from people who are supposedly tax professionals.)
And I was dismayed and hurt when you made the comment after I posted such that I could barely work thereafter. (Okay - not true, but I couldn't resist.)
In any event, I have posted an apology in the thread but wanted to do so here as well.
Regards Peter C. Gatto, CPA
State Income Tax Refund Worksheet - Line 10
Hello JR1 (Jeff)!
It's your tax preparer friend from Illinois (Buffalo Grove, Illinois). My question is related to the way ProSeries handles the State tax refund from the previous year. Example: The client gets a 1099G for $500 (refund received from the state). However, after the transfer by ProSeries of the previous year's state return information, the state refund appears on the 1040 line10 in the amount of $139. How could this be ? The client had itemized deductions on Schedule A of $24,000. I looked at the ProSeries 1099G worksheet, and the amount of the refund Line2 is different from what appeared on the previous year state tax refund. Also, the ProSeries "Federal Carry Forward" worksheet amount is different from the previous year's state tax refund. I have contacted the ProSeries technical support help-desk and they were of very little help. It's been very frustrating interacting with Intuit. I welcome any insight you maybe able to provide.
Chet
not so desperate today
My my...did someone forget to have their devotions this morning? I could feel the sting in your words. You did nothing to make me mad. Why would you think that? I payed your fee which you gave me at a reduced rate (and I was very thankful for that!) but I was not comfortable paying you only half of what you normally charge and I couldn't afford your regular prices although you are worth every penny of them. Call me proud but it is the truth. You would be proud to know that my taxes have been finished a long time ago! (When you know your going to get money back, you are more inclined to get them finished!!) If you recall, I was very interested in taxes and have been on taxalmanac for months because the information is all very interesting and stimulating and I have returned to college and getting my basics at the moment and toying very seriously with becoming an accountant.And you had a big part in that. I am so sorry you feel some hostility towards me, but I don't know why. When I saw how many people were singing your praises I wanted to give my two bits as well. Because I never did so adequately. Now that I have been so rudely awakened by another "bro", I will keep my praises to myself. But for what it is worth,I still love ya.."sweetie" and am and will always be thankful to you. And good humor?? Always. A cheerful heart doeth well like medicine. I just wish my present accountant was as fun as you, but she's rather boring. Too bad. Jeanne.
not so desperate today
JR1. OH..now I get it...the email that you sent me a long time ago....the reason I didn't respond is that I didn't want to put you on the spot. I know that you would of continued with our payment arrangements but I just felt so "shy" about it. So I thought it would be better to just go away....... You could replace me with another client who had the money to pay you your full price. I am sorry I didn't communicate that but I didn't want you to feel obligated in anyway. Sorry. My fault. Believe it or not I do lack in the communication department. But I am learning. The hard way for sure. Take care. From Texas, with love. Jeanne.
p.s. I will say tho, I am a little scared when I see so many viewpoints from the accountant pros who answer tax questions on this forum. Yikes! Surely things ARE black and white and not gray??? I guess a little gray could possibly be a positive thing. smile. Hope you have a great tax season.
Jeff,
Thanks for the manly hug. It's good to know I am not alone. I read Romans 8:1. Thanks for the passage. It is helpful.
A couple of weeks ago, I experienced God's love again. I met some new friends at a Knights of Columbus meeting who after talking with, helped get me back on the right track. God's grace is certainly powerful. Jesus didn't condemn the woman about to be stoned, but I kept condemning and stoning myself. It has taken a while, but I am stopping that and I continue to march on and know I am loved by family, friends and colleagues.
God bless you and thanks,
Tom
wrong routing number
I just found out today why I haven't recieved my income tax refund. I filed efile dd. 2 other members of my family mailed theirs out 1 week after mine and they recieved theirs. I had my taxes prepared on March 8. I call my tax man and he did a search on the Irs website and found that it was sent out on March 23. If it was filed electronically shouldn't it have been taken care of sooner than that. Or could this be the check that will be issued to me instead of direct deposit. I am praying so. I can't have a vacation without the money. Anyway he entered the wrong routing number. I realized I was completely out of checks and deposit slips. I offered to call my bank to get the number, he said no I have it here. I was told he looked at the one above it and entered that one, according to the routing number in which I was told was used. How long do you think this will take to get back from the Irs. I was very upset because I have a broken down van that need a fixing and Spring Break I was planning a trip with my friend which now I am not sure if I will have the money to go. I guess my question is should I be punished for a mistake they made. I was told I should demand they pay me the money that is owed to me and I could just give them the check when it comes in. Why should I have to not drive or vacation because of his wrong doing. Is their a penalty for him for such a thing. Thank you, Annetteski
Questionable Legal Advice for rental properties
I retained a lawyer on March 2nd, 2007 to help me set up a corporate structure for my real estate holdings. I have 3 rental properties, my personal residence and 4 pieces of raw commercial/industrial land in my portfolio. My lawyer recommended that I set up a main LLC and 2 sub entities. One for my rental properties and one for my raw land holdings. She also set up an S-Corp for the following reason:
"The S-Corp will be used to manage the properties. You generally use an S-Corp to manage rentals. Your tenants pay rent to the management company. Your management company pays a fair rent to the LLC’s (so you can cover your mortgage). If the tenant falls in a hole and sues, they would sue the management company which would have little to no assets.
You also use the S-Corp to pay yourself a salary. It has to be reasonable. So if you make $25k per year in the S-Corp, you would pay yourself about 50% in salary. We want to keep it on the low side, but it allows you to pay less in self-employment tax. Based on the $25k, you would save about $1875 in taxes next year."
I talked to my tax accountant and my property manager. They both agreed that I did not need an S-Corp. I am strictly dealing with rental income, not foreclosures, fix and flips or development. I thought I was getting some bad advice from my lawyer and she was just trying to pad the bill by charging me for a product I did not need. I sent a letter to the law firm stating I wanted to sever the business relationship because of the aforementioned reasons. i got the folloing response:
"The reason you form the S-Corp is NOT for liability protection so much per se, but for the bifurcation of income tax. The S-Corp is the only entity that the IRS allows you to save self-employment tax with. If you made $100k in the S-Corp, you could pay yourself $50k, and take a distribution of the other $50k. You would save about $7500 in self-employment taxes by doing this. However, there is one caveat—you can ONLY use an S-Corp for service type entities. So when dealing with real estate, you can only use an S-Corp if you actively rent property. So you use the S-Corp as your rental management company. You run your rents thru the S-Corp, and the S-Corp will pay a fee to the LLC (who holds the property) to pay the mortgage and other debts that the property may have."
From my understanding, I do not pay self employment tax on real estate rental income. Would setting up an S-Corp mitigate my taxes. Do I actually need an S-Corp in my situation? One last point. She wants to charge me $1700 for the work done to date. I have received from their office: 1). The operating agreement for my LLC 2). The articles of Incorporation 3). organizational minutes 4). IRS Form SS-4 5). IRS Form 8821 6). Waiver of Conflict Agreement 7). Engagement Letter
Obviously, most of these forms are preprinted and are not indigenous to my case. Is $1700 a fair assessment for legal fees?
Ameliorate 23:35, 27 March 2007 (CST)
L1 Visa - Election Form
Hi JR: Client has L1 visa, in USA over 180 days (all in 2006). It qualifies to file 1040 worlwide income - yes? Which form should I fill to make this election? On ProSeries Basic I could not find one. Please help. Thanks
IshaqInagpurwala 13:35, 28 March 2007 (CST)
Questionable Legal Advice for rental properties
Jeff:
Thanks so much for your input. This is my first experience with real estate lawyers and it was not a pleasant one. I guess they can be a bit self righteous and take umbrage to some piece of advice you do not agree with. I plan on contacting the Nevada Bar Fee Dispute Committee regarding the $1700. That seems a little excessive to me too.
James
Answer
I answered the questions in the forum that other asked. I've put my final comments. Can you just verified it? http://www.taxalmanac.org/index.php/Discussion:K1_%28Form_1065%29_issue
Thank you so much!
Sorry to bother JR its pitiful but vital for me
I'll make it quick JR. Can start up cost create a business loss Sch C. My client had some start up cost in Fall of 2006 and had no gross income can these cost create business loss. Probably, one of those questions that "everybody knows" unfortuneately I don't know the answer. Thanks for the time sir!
HRA AND 105 CONCEPTS
JR: I HAVE JUST SIGNED UP WITH 105 CONCEPTS IN FEBRUARY OF THIS YEAR. I THINK THE SUPPORT IS OUTSTANDING AND I DO NOT SEE HOW THEY CAN DO IT FOR THE PRICE THEY CHARGE. ($36.00/YR/EMPLOYEE
ANYWAY MY INTENTION IS TO PROVIDE THIS SERVICE ALONG WITH THE QUICKBOOKS ENHANCED PAYROLL FOR ACCOUNTANTS. I WOULD BE FILING THE QUARTERLYS AND DETERMINING THE AMOUNT OF THE PAYROLL CHECKS FOR ONLY THE EMPLOYEE SPOUSE AND ON A MONTHLY PAYCYCLE. I INTEND TO CHARGE SOMEWHERE BETWEEN $225-$300 PER YEAR ON A MONTHLY PAYMENT PLAN. I WOULD LIKE YOUR OPINION ON MY CHARGES AND ANY TIPS YOU MIGHT BE ABLE TO GIVE. THANKS IN ADVANCE RichardMN````
PS SOME OF MY FONDEST MEMORIES WERE BREAKING UP THE FIGHTS BETWEEN THE VIKING AND PACKER FANDS WHEN GREEN BAY CAME TO TOWN.
Expense vs Depreciate roof repair question
Can you provide a regulation or code reference that backs up expensing repairs (in my example the the roof shingles were replaced, because it was an old building with shingle buildup). The roof had been leaking and threatening the structure inside the building.
Bookmarks
JR1:
I have no idea. They should not have gone away and I know of nothing that we have done that would have caused this. Specifically where are you looking to see your list? I just want to make sure that you're aware that when you click on "my bookmarks" that that list will only show the pages on your bookmark list that have been edited since you last visited them. To view the full list, you have to click on Display and modify your complete bookmark list. You may know about this already though.
Let me know...
- Tim Doyle, TaxAlmanac Moderator - Talk to me 21:12, 9 April 2007 (CDT)
Hello. I was reading your posted comments on a related issue and hope you will take a moment to answer my Qs. I'm a practicing environmental atty and have no tax expertise - just a Finance undergrad degree.
I formed a Pennsylvania Corp in 2003 and made an S election w/ IRS. I'm the only shareholder. The S corp had (assume $100,000) NOL in 2003 as reflected in 1120 filed. On other year it did business was 2004 and had a smaller (assume $10,000) NOL that year. FYs 05 and 06 Inactive Corp was filed.
Personally, I never did anything w/ my 2003-present 1040s b/c I just got the IRS to grant late-filed S corp status for 2003 (I filed the election late in June, 2003) in a Private Letter Ruling last month. Now I would like to amend my personal 1040 for FYs 03, 04, 05, 06 to carry the loss forward.
Can an individual carryforward an S. Corp's NOL? Will the 1040Xs be timely if filed in two days? Do I need to file amended sched. Ds w/ the 1040Xs? Basically, I'm not sure how an individual can benefit on the 1040. Is it a sched. D capital loss carryforward? Do I first need to carry it back 2 years - amend FY 01 02 1040s?
Attorney referral
Hi JR1, I noticed that you practice in the western suburbs and so do I. I have a very small tax practice out of my home (South Elgin). I worked for Ernst & Young for 15 years and since I am a mom I basically quit with a couple of small clients that I still work with. I wondered if you would share with me the name of the attorney you are so fond of and mentioned in the posts on incorporating. I often have the need to refer people to an attorney that can do that sort of work (and do it well) and I just don't have anyone to refer them to. Would you mind sharing??? I could mention my referral source to them.
Sarah Matthews
K1's
JR1, I am trying to find out information about filing a k1 without SE tax. The company I work for gives me a k1 at the end of the year, with my income in the Ordinary business income, but input a $0 for the Self-employment earnings. The accountant who files my taxes informes me that it is incorrect. From reading your posts you seem quite informed about this topic. I would love to gather more information on the subject, and if you process individual tax returns uses your services in the future. Thank you for your time, any information would be greatly appreciated.
Larry User:Lbenedek
Capital Gains-S corp-Stan
I'm new here, so I'm not sure if I'm using this forum properly! How can the situation regarding the sale of townhouses be dealt with, ie, quit claim the project from S corp (100%) owner to himself?. Any ideas, suggestions?
Thx!!
S-Corporation Questions
Hello- I found your link through a search and I am having similar issues that the others you were chatting with are experiencing. I adore my CPA but I am often not sure he understands the ins and outs of S-Corporation taxes.
I am unsure about the issue with paying myself a reasonable salary and then having Profit Distributions or whatever they are called that aren't subject to FICA taxes. I switched from a sole proprietor business model to S-Corp at teh suggestion of my lawyer but I'm not sure that I have been paying my taxes to my benefit with the S-Corp standing.
I would love to have a CPA who is really familiar with S-Corporation taxes give me a second opinion. Like I said, my CPA is great but I work really hard and just want to make sure that I'm not paying too much in taxes. I did, afterall, pay to set up as an S-Corp and I'd like to get something out of it!
I have no problem with working with you electronically -- I saw that you have another client in Ellicott City and you are willing to do that. Can yoou let me know if you might be interested in helping me out with a 2nd opinion? I am not sure what you would need to do that, bu tI can tell you that I am pretty good with Quickbooks these days and I do keep pretty meticulous records, etc.
Please get back to me and let me know if you would help me out. Alsoo wondering what your fee might be for a consultation/review of how I have been handling my taxes, etc.
Thanks so much and I hope t hear back from you soon!
Help with Taxes for S-Corp
Hello there- I am new here and I just typed you a long message and then screwed up and it disappeared. Arghhh!! Actually, once I finished this one, I see that it is there above -- just no signature as to who it is from. It's me!
Basically, I have a CPA I adore however, like the other discussions I saw you involved with, I am unsure at times if he really understands S-Corp taxes and the profit distribution stuff.
I am looking for a 2nd opinion from a tax professional who understands S-Corps really well. My CPA might be 100% correct with everything he's doing but since I switched to an S-Corp from a sole proprietorship in 2006 and had lawyer fees to do so (my lawyer was the one who suggested the change -- not surprising!), I'd like to get all te benefits of being an S-Corp.
Please let me know what you might charge and if you'd be interested in assisting me with a 2nd opinion. I have gotten pretty darn good with Quickbooks and am fairly meticulous with keeping records and everything up-to-date. I am fine with working electronically with you as well -- that's how I work with most of me clients.
Oh, I am a graphic designer, just in case you wanted to know the type of business. I work for several other companies and I have a home office.
Thanks for taking the time to read my message and I would sincerely appreciate hearing back from yu as soon as you have a chance.BBD1 14:18, 18 May 2007 (CDT)
BBD1 14:12, 18 May 2007 (CDT)
NCPE/NATP
Yup, I have been to some great NCPE seminars, but I don't teach for them.
I have met Jerry and Wayne and have a great deal of respect for them. I'd love to teach for them! Jerry is good friends with a family that I am friends with (amost family on both sides), so when I see him I always give him a message from them.
JR:
Those factors do count to determine main home, and are called factors in determining main home, but it specifically says you have to meet the use test.???
YIKES! EA Exam
Congrats, I really don't think you'll have a problem. You can probably just review the things you have lots of experience in, but study harder those things that are newer (Circ 230, Estates, etc). Great step forward!!! If you join NATP, mention my name - I get Brownie Points (and enough points gets me prizes). Good luck!!! You will like Cos Borzumate - one of the instructors in Chicago. I have known him for 9 or 10 years. Kevinh5
ND 1975
Jeff, Great to hear from you. I just turned 54. Graduated from St Viator in Arlington Heights before going on to duLac. Lived in Alumni all four years. Have lived here in Virginia for past 18 years (wife's family is from here). I'm sure I could learn a lot from you. I, too, specialize in the tax and small biz side, but I'm really a newbie to the profession. Took me a long time to figure out what I wanted to do when I grow up :) Have about 30 monthly bookkeeping clients and did about 80 tax returns this past tax season... (my first tax season). Enjoy your weekend!Anchorman 11:32, 16 June 2007 (CDT) Jim aka Anchorman
NATP conference
Jeff, I have a free NATP conference coupon which I was going to use myself, but since I am a speaker I get a free conference anyway. Are you interested in attending in Las Vegas in July? You would have to pay your own transportation, meals and room, but the confrence fee of $500 something would be free. I need to know this week so I can offer it to someone else if you can't go. Kevinh5
Las Vegas
LOL, well, if they get a free conference they sometimes do go.
NATP
JR,
I've seen some "right on" advice you've given on 1031 exchanges.
I also read somewhere that you get some cred for someone joining NATP (or was that Kevin that was looking for that cred?). I am thinking about joining and wanted to mention your name. I looked on your profile page but don't see your name.
If you'd be so kind to tell me, I'll put you as the "Who recommended you to NATP" line.
Thanks
Reasonable Comp for Doctors
I noticed your thread in a conversation about C versus S for an anesthesiologist.
Have you ever had an agent assert reasonable compensation in the context of a medical practice? I've got a partner with that issue currently -- in this case an oncologist.
Just curious as to your personal experience in this arena. I'm new to this site and am still feeling my way around.
KParker516 11:42, 26 June 2007 (CDT)
Topics
JR1:
When you have time can you read my questions posted in the following topics and give me your opinion. I'm in the process of a few case studies and found your insight helpful on other topics. These were older topics that I found and submitted new replies.
Discussion:SHAREHOLDER LOANS TO S CORP
Discussion:Interest on shareholder loans
Thanks a ton.
Taxstudent07
S-Corporation Stock Issues
JR1,
We have a client that would like to offer a performance based bonus to its managers. Basically the bonus would be given if the company's overall return hits $X the managers would get 10 shares of stock. Or if the company's overall return hits $Y, the managers would get 20 shares of the S-Corp stock.
We are fearful this may be considered a separate stock, thus violating an S-Corp requirement of only having one class of stock.
Is there any authority to support a bonus plan like this? Any other similar structure ideas?
Stock bonus
Thank you for the response.
The bonus plan provides the bonus only to two managers, while there are 10 total shareholders (i.e. 8 non managers with no bonus plan). Is this considered to not be identical rights to distributions and liquidation proceeds? Thus creating a 2nd class of stock?
single-member LLC can hold homes/personal residences
Since a single-member LLC is ignored for all income tax purposes, a business purpose is not required. Thus, a single-member LLC can hold homes/personal residences also. In addition, in PLR 200004022, the IRS ruled that a residence owned by a single-member LLC qualified for the IRC $121 exclusion of $250,000 ($500,000 if married).
Missing Discussion
Jeff:
You moved the page to Phoenix Area Tax Preparers. That's a valid name for a page, but not for a discussion. Just go to that page and change the name to the same thing but make sure you add "Discussion:" in front of it. That'll move it into the discussion area and it'll show back up on the forum listing.
- Tim Doyle, TaxAlmanac Moderator - Talk to me 17:01, 23 July 2007 (CDT)
Parsonage Housing/FRV Confusion
Hi,
First, forgive me if I am posting this question incorrectly... I'm just not sure how the site works. But in my little bit of research on this subject, I found your comments to be most useful and thought I might try to BEG some advice from you.
I'm on the finance committee for our small church and am trying to advise the pastor if he is preparing his returns correctly.
He has been the pastor since October 2004, lives in the church-owned parsonage rent-free but pays for all utilities, maintenance, etc. In 2004-2006 he designated a housing allowance. But for 2007 he opted not to designate a housing allowance, because he said since he was required to report the parsonage fair rental value for SE purposes, an additional housing allowance was actually causing him to owe more tax since his actual housing expenses were less than the parsonage FRV and he had to pay on the excess.
Maybe some numbers would make it clearer:
- 2006 Salary = $33,635.00
- Housing (designated $350/month) = $4,280.57
- FWT = $1,113.00
- Parsonage Fair Rental Value = $9,600.00 ($800/mo.)
- Total Housing Allowance = $4,280.57 + 9,600.00 = $13,880.57
- Actual Housing Expenses = $6,370.22
- Federal Income reported in Box 1 of W-2 = $33,635 - $4,280.57 - $1,113.00 = $28,241.05
- Housing Allowance reported in Box 14 (Other) of W-2 and as SE income = $13,880.57
- Excess Housing Allowance reported as Federal Income (1040 line 7) = $13,880.57 - $6,370.22 = $7,510.35 (this is where he said it hurts him)
- For 2007 he will report the required parsonage FRV ($850/mo. = $10,200) as his housing allowance and not designate any additional amounts, since his actual housing expenses (est. $7,000.00) will not exceed the FRV and he is taxed on the excess. He has projected that even when reporting his fully salary for Federal income purposes (without the designated housing allowance), he comes out better than having a greater amount of excess housing allowance to report as income.
A lady in our church, who has some church accounting background, asked me why he wasn't taking a housing allowance this year. I told her that the parsonage FRV was hurting him... she's convinced he just reports the FRV as income for SE purposes, but doesn't have to add it to his designated housing/utilties allowance when determining if he has excess (which would be federal income).
I don't know if this is worded correctly - I'll be happy to try to clarify if necessary. THANK YOU in advance for ANY insight you can give... he wants to amend his returns (is that a good idea - does it put you in the "most likely to be audited" category??) if he has been doing his returns incorrectly the past few years.
Blessings Ccottrell 12:16, 31 August 2007 (CDT)CCottrell
Hi
Hi, Jeff! Yea, I'm still around but haven't been keeping up with this site for a few months. I'll probably be back more often later this year or early next year. Thanks for checking on me and hope you're doing fine!
Deb 00:01, 2 September 2007 (CDT)
sales tax
JR Thank you for that reply. The question then needs to be researched as to what establishes nexus in IL. Also, what is your thought about all the prior years sales taxes that were never collected (assuming worse case scenario that they have nexus). What would you recommend to your client. Thank you.
The United States Supreme Court in Quill Corp. v. North Dakota, 112 S.Ct. 1904 (1992), set forth the current guidelines for determining what nexus requirements must be met before a person is properly subject to a state's tax laws. The Supreme Court has set out a 2-prong test for nexus. The first prong is whether the Due Process Clause is satisfied. Due process will be satisfied if the person or entity purposely avails itself or himself of the benefits of an economic market in a forum state. Quill at 1910. The second prong of the Supreme Court's nexus test requires that, if due process requirements have been satisfied, the person or entity must have physical presence in the forum state to satisfy the Commerce Clause. A physical presence is not limited to an office or other physical building. Under Illinois law, it also includes the presence of any agent or representative of the seller. The representative need not be a sales representative. Any type of physical presence in the State of Illinois, including the vendor’s delivery and installation of his product on a repetitive basis, will trigger Use Tax collection responsibilities. Please refer to Brown’s Furniture, Inc. v. Zehnder, 171 Ill.2d 410, (1996).
NEXUS
The United States Supreme Court in Quill Corp. v. North Dakota, 112 S.Ct. 1904 (1992), set forth the current guidelines for determining what nexus requirements must be met before a person is properly subject to a state's tax laws. The Supreme Court has set out a 2-prong test for nexus. The first prong is whether the Due Process Clause is satisfied. Due process will be satisfied if the person or entity purposely avails itself or himself of the benefits of an economic market in a forum state. Quill at 1910. The second prong of the Supreme Court's nexus test requires that, if due process requirements have been satisfied, the person or entity must have physical presence in the forum state to satisfy the Commerce Clause. A physical presence is not limited to an office or other physical building. Under Illinois law, it also includes the presence of any agent or representative of the seller. The representative need not be a sales representative. Any type of physical presence in the State of Illinois, including the vendor’s delivery and installation of his product on a repetitive basis, will trigger Use Tax collection responsibilities. Please refer to Brown’s Furniture, Inc. v. Zehnder, 171 Ill.2d 410, (1996).
Thank you
Help with manager-managed and member-managed
Can you help me with something? I left this post earlier, but hadn't seen too many replies and was curious for an answer.
"I am new and I thought I had done enough research and question asking, but now I am confused. We just created an LLC for my wife. It is a home based business and I am the only other person helping/working with her. When we created the LLC it was created as a manager-managed LLC. I am now going through the EIN process and it asks me if its a single member or multi-member (my wife and I) and I didn't know what to do. Upon further research, I found there are "tax ramifications" for manager-managed LLCs. Huh? Can someone help? Thanks in advance!"
Should I have opted for a member-managed? Can it be changed? Does it matter?
Thanks for your patience!
I've been reading your posts and wondering if you are taking any new clients from california.
I need to file delinquent IRS returns and I'm looking for advice on how to structure things. I've made around 10 phone calls to local preparers/cpa's and they just gather the end of year trial balance and prepare a return.
I have a c-corp in nevada from 2000, I never generated much revenue from the corp. because I had another job, just a few thousand per year until about 2005 when i actually started doing business. However, i did put money into the business and take money out and have losses. Back then i was writing software and thats where the expenses came from, hiring programmers occasionally equipment etc. I would write myself checks from the company back to me. I just started paying the taxes back to 2003 for state unemployment tax to start getting straight. And I know when Nevada files with the IRS I will start receiving a letter to file with them.
I have about every reciept you can think of all spreadsheeted out and filed away. I have the quickbooks file setup with all the checks and deposits. But I need someone who will look at what i've done and tell me how to best classify what I have, AND tell me why we are doing something. Like I said i did put a lot of money into the business as investment capital, and i've taken a lot back out. so i don't think i'm taxed on that, but showing the difference between my investment being returned and the income is my concern. Also I don't know if I should make an s-corp election.
I know there will be penalties, wage taxes and the such, and of course i'm trying to minimize them. But I need a more legit business, i'm here full time now and I need to be straight with my books and taxes if I happen to need financing or something.
Thanks
--Addision 14:35, 10 October 2007 (CDT)
Thanks for your comments,
Ya I know there is no benefit to having my corp in NV financially. I also have a business here in CA, and I wanted to distinguish them from each other for a variety of reasons. So thats why I chose Nevada. So do you know how I might find people on here from CA. Is there a profile search that may list thier state as a filter? Or should I just put out the word on the board and start interviewing?
Thanks again
Frank.
Banning Barbara
How do you go about getting rid of her? Couldn't she just sign in with a new name?
I agree - there are COUNTLESS times I have corrected her information. If I were a CPA I would be FURIOUS that she held the same credentials as I, and that the public would be misled into thinking that she were as much a tax expert as you or I. What a joke!!!
Then it appeared that I was attacking her because she was always wrong. I went back and edited some of my posts to soften the blow. I did leave her a CONGRATS last week for getting something correct or being the only one to make a point, but I can't remember what it was. One out of one thousand posts, probably.
Hey, I am a tax professional who now works for this Payment Solution company, that is now specializing in provided a products specifically for tax professionals. I have been an ERO for over 7 years. I would like to share this business opportunity with you and others. Check out our site www.neemaweb.com please. Thanks Neemaweb.com 16:30, 17 October 2007 (CDT)
Don't know if that
Don't know if that was helpful or not. Hate to see him have to hire a lawyer, but on the other hand, sounds like the discovery is going to start flying. The issue for him in the divorce case will be no problem, as the local judge will have no patience for trying the bully the accountant. He's got some potential worries for sure outside the divorce, especially if the business flops and everyone is looking for a scapegoat to recover thier losses.
Ahh forgot to sign
JR, the reason I would say he loses both clients is because he had one engagement with H, then took one with W, and they were in essential conflict, but the conflict was waived (does not sound like he got it in writing but, by their actions). But, then, when she says keep something from H, the essential (and huge) conflict arises again, and it's obvious at that point that it cannot be waived as the clients are in litigation. These conlict cases are so tough because, as you know, even the most experienced and well meaning practitioner can get lulled into them. Take care.CrowJD 14:55, 19 October 2007 (CDT)
Deductiblitiy of second home
Can you point me to the other discussion?
Thanks
Can't find any case law. JRJRohle 10:52, 6 November 2007 (CST)
Hi
THIS CONCERNS MY INHERITANCE TAX FREE
I have a nonresident relative who wants to leave his US-based assets to me, what is the best way to get away from paying so mauch tax?
JR1 Tax Court
JR1, I think it's ridiculous that you have to go through the EA thing to begin with. But, be that as it may. Since I think you've mentioned that you are getting the EA, why not turn right around and take the Tax Court test when all that boilerplate is fresh in your mind? I don't have a scanner, but if someone here can get you that article I mentioned if you don't already get the CPA/NPA mag. CrowJD 15:05, 14 November 2007 (CST)
HA
Yeah, those employee benefits do start looking better and better as time goes on! CrowJD 15:42, 14 November 2007 (CST)
LLC with a foreign member
I woud like to form a US LLC (a partnership) with a foreign member. He will be an owner member and active in the management of the company. The company will be engaged in consulting, training, and channel partner recruitment for European software companies in Europe and the United States. My partner (a Norwegian) will be domiciled in Luxembourg and licensed to do business there under our corporate name.
The nature of the business is project based and personal income will be split 50/50 after business costs on all revenues generated internationally or domestically.
After reading much of the discussion on this site and others it seems the tax implications of this architecture may be complex depending on where source income is generated and how it is disbursed to the partners. Can you provide any general guidlines on the tax implications of this structure?
If you need more information let me know.
Thanks - any contribution will be appreciated--Hwiconsult 08:25, 24 November 2007 (CST)
LLC taxed as S Corp.
JR1:
Tom O'Connor here, aka taocpa on the board. You are the resident board guru on small businesses. Client setup an LLC. It's a retail store pulling in $200K approximately. Most of the costs are inventory and utility bills as he owns and operates the store. My question for you is (after perusing the board): I am thinking of having it taxed as an S Corp so it can generate salary for him. Or is it just better to go with Schedule C and do the tax-free distributions to pay his taxes? I am debating this because his expenses are going to be low for the store overall except inventory, rent, etc. that I mentioned earlier.
Just wanted to run this by you for thoughts, opinions, etc.
Thanks for the help.
Tom O'Connor tao.cpa@verizon.net
Interest on tax due
Hi JR: My client receivedd CP2000 for tax year 2005. I did not prepare this client 2005 tax return. Client forgot to file and include Sch D income.
I have calculated the amount what shoud have been reported. That will reduce client's refund amount (already received). Should I calculate the interest on this extra tax or let IRS do it?
CP2000 instruction spefically says that not to file 1040X, just provide the explanation for the changes. Which is OK with me, I will put difference looking at 1040X.
This is my first time case to get involved with interest on under reporting tax in my last 20 plus years of doing business. Also ProSeries did not calculated the interest. Which I think I do not have entered anywhere. Please e-mail me your thought to inagpurwala@yahoo.com
Thanks
IshaqInagpurwala 17:56, 5 December 2007 (CST)
