Terry D EA

I love that song!!!!! Yes, this guy did open a corporate bank account. Matter of fact, he used that account to pay me yesterday. But.... the check doesn't say INC at the end of the name. So, who knows. I do like your suggestions and will consider them once I meed with him next week. Somehow, he slipped through the cracks at the SOS office which apparently is a black hole instead of a crack because they show his business as active and not under suspension. Surprised me. Thanks, Terry D.

I'd like to take a moment and add my thanks to all on this board who have taken their time to help others. I agree with the earlier posts, on the wealth of knowledge and information here. I too have taken much but have added little. However, over the last 10 years, I have learned more here than anywhere else. KUDOS to all!!!!! I am off to the house as I have been here since 7 this morning and can no longer type or think straight. GOOD NIGHT to all and may each of you have great finish tomorrow Terry D.

I have a client, (friend of mine), who started a C-Corp in April of 05. No S-election, no tax returns filed, no annual reports filed, no stated corp filed, no taxes paid, crappy books, and guess what??????? He wants to catch everything up to date and do things right. I suggested possible dissolution as I told him he probably couldn't afford me to go back and create the financials and tax returns etc plus the failure to file and failure to pay penalties. I really like this guy but he is nuts! says he is ready to do this. I told him 5k up front and it would probably take me the better part of a year to finish and couldn't give him a final tab. Its not that I wouldn't like the fee attached to this, I am loathing the amount of work among other things. So, does anyone have an opinion on dissolution based on no income? My problem with that is he did have income plus expenses and it all went into his pocket. Any suggestions will be welcome on this one. Terry D.

Margaret. Same problem here with the CRUT name and address; etc not flowing after the 1041 was deleted. I am going to unprotect the form and type it in manually. ATX is a pain with these type of returns. Cam't load client letters either so you can't get the cover page. Geez whats next?

Margaret, I know you are busy and so am I. Thanks for the reply. Obviously, the program is confused as to which form to input the K-1 information from. Once I deleted the 1041, all flowed to the K-1. Now the only problem I have is I don't agree with the capital gains calculation within the program. I can figure that out just fine. In the instructions for the 5227, a split trust may not need the 1041-A form, this depends on when the trust was orginially created. For the one I am working on, it appears the only form is the 5227. HOWEVER, at the risk of a 5k penalty per year for filing the wrong form, I want to be absolutely sure. I may be smelling extension here now. Terry D.

It is nice to know there are folks out there looking out for us. I contacted support this morning as well. I have been getting white screens when the program begins to save a return and it is extremely slow when opening a complex return such as a CRUT. The girl worked with me for a while and she did a repair of the data base. The program is a bit faster but nothing to brag about. The counter appears to stop when opening a return but they insist it is counting in the background. Any other ideas will be appreciated. Terry Drummond

Jerry, follow Maribeth on this one. I don't know what I was thinking when I posted my response, a good excuse is too early and no coffee yet or food for the brain. Anyway, she is right on the money. Terry D.

Hi Margaret, Do you remember how to get the information from forms 5227 and form 1041-A to flow to the K-1 for a CRUT. I do one of these every year and can't remember how to get that information to flow. thanks in advance for your help at this busy time. Terry D.

Hey Jerry, I think I would contact the CPA or have your client contact them to verify the numbers for the ordinary dividends and qualified dividends as they should match unless there is another 1099-DIV that isn't included in your paperwork. Another possibility is your client may not be the only beneficiary of the trust but may have the highest percentage. These are just a couple of thoughts as to why those figures may not match exactly. To answer your second question, NO, you do not have to combine those figures. Enter them in the 1040K-1 worksheet in the appropriate boxes. Hope this helps. Terry D.

Thanks everyone! :)

Can anyone direct me to a website that would give the value of stock and the date of the split. I thought I have seen here before where someone gave a website for this purpose. Terry D.

Hi Margaret, What about checking with the local Arkansas county website to see if there is a tax payment history and tax evaluation available. I do know that tax card value can be accepted as FMV at DOD in some states. Here is NC it is and when I worked with my father's estate in Ohio, that was used as well. The only problem I see with this is if the tax card value was considerable less than what the FMV would have been. Try Zillow.com and see if you input the address information in that area and it will return an estimated FMV. Hope some of this helps. Terry D.

The IRS will always assume that any income in box 7 of the 1099 MISC is self-employment income. Sounds like this company incorrectly issued the 1099-Misc. They could have included this in his W-2 wages. I think it would be best to contact the apartment complex and ask them to correct their filings. If you put this as other income on line 21, you can be sure to get a notice from the IRS. JMHO Terry D.

I gotta agree with OldJack on this one. People should ask for sound advice before they assume anything. Good luck Terry D.

NO.

Thanks for your reply. I thought this maybe 1245 property as it is real property. After some additional investigation, I agree with the 1250 property and already had the land allocated as section 1231. Terry D.

Ditto from the other posts KC. I hope you have a restful and blessed birthday along with many many more. Terry D.

Wanted to move this up the list a little. Could someone please confirm whether this sale is reported on Sch D or form 4797 as section 1245 property. Thanks, Terry D.

If the payroll taxes were deposited and the 941 filed under the sole proprietor's name and TIN, the IRS will have record of those deposits under the sole proprietor and not the corp. You could show the corp not issuing any payroll until the fourth quarter, claim the PR taxes paid for the 3rd qtr on the Sch C and all should be fine. The sales taxes have nothing to do with the PR taxes. I have had my clients screw up their payroll deposits and you can't imagine the trouble and time it takes to get the IRS to make the proper corrections ( 3 years on the last one I took care of). So, I wouldn't do anything that would add confusion on the end of the IRS. Just another note, HRB filed PR taxes for a real estate agent client of mine who fell under the same scenario as yours using the wrong EIN. They also filed the 1099's using the wrong EIN. After corrections, things are still in a mess. Unless someone else has a better way to handle this, follow my first suggestion Terry D.

MAS did acknowlege this was a liability for the sister-inlaw. You need to send this one to HRB Terry D,

As I looked into this further, my client owned the property that the business rented from him and the depreciation was taken on his individual income tax return from Sch E. So, this makes this a schedule D transaction all the way correct? If I am right, then the 1245 depreciation recapture doesn't apply. I am tired and am having a difficult time trying to keep this straight. I am closing the office and heading home for some sleep. Maybe tomorrow it'll click. Thanks, Terry D.

Okay KC you got my attention. I really didn't think the loan repayment was part of the expense of the sale but thought I would get others opinionl. Now, if the cap gains tax rate is zero, why does the program still show a fair amount of tax due. This should be reported on form 4797 1245 property long term with depreciation recapture correct? When I look at the cap gains worksheet the amount is being taxed at 15%. Am I doing something wrong? Here are the figures: sales price 67090.00 basis 12,500, land value at the time of purchase was 1045 and there was 469.72 that are an expense of the sale. Full depreciation had been taken. I show 54,049 cap gain on line 13 and 11,455 depreciation recapture from form 4794 on line 14 of the 1040. Because of this and a 1099-C that is taxable, the client owes 6323. Thanks for taking a look at this. Terry D.

I think it would depend on when they changed entities. You may only have to do a short year 1120S and the remainder of the year on Sch C. I don't think it is proper to file the entire year as an S-corp unless it was an S-Corp for then entrie year. Terry D.

LOL, I think Joelgilb is right. Terry D.

I am too tired to look this up. A client sold a commercial building where he owned and operated a business that closed two years ago. A personal friend loaned the business some money (10K) to keep the business running. He only repaid a small portion and then the business closed. He did repay the balance of the loan from the proceeds from the sale of the building. Would the amount of the loan balance paid be part of the expense of the sale? Thanks to all in advance Terry D.