Taxizen

Thank you for your exploration. The company doesn't have to apply sec 263A to COGS since the indirect cost was less than $200,000. However, the previous CPA didn't account for depreciation, labor, rent, utilities, etc in COGS. He reported them on the operating expenses. Is it ok to report like that on the tax return?

This is new to me. The new client runs a bakery factory. How do you report the cost of goods sold(COGS)? The previous CPA only included materials purchased in COGS. Do I have to apply cost accounting to COGS? What else do I have to consider the tax reporting? Any input would greatly appreciated. Thanks.

Would you inform me where I can check on that? Thanks.

One of my clients got issued a new FEIN since the bank required him to have one even though he runs the business as sole proprietorship. The bank officer obtained one for him at the bank. He was told that the taxpayer should not issue 1099 to self contractor with individual social security number. Is this correct? I couldn't find any update about this on IRS web site. Any input would be appreciated.

Thank you for your brief response. It helps me to figure out 1031 requirements and rules. I have more questions about how to report depreciation on Schedule E. The ATX form has the feature of how to handle the like-kind exchange on asset entry. However, the form only shows the partial depreciaton even though I have to show the full depreciaton since the replaced property has to bring all the information from the relinquished property. The question is how to show the full year depreciation and how I show the replaced property on another Schedule E? Any input would be greatly appreciated. :rolleyes:

A new client completed 1031 exchange with intermediary escrow company in 2007. He and his lawyer followed the 1031 rules except for two rules: the greater sales price and greater debt rules of the replacement property. I explained these rules but he and his lawyer insist that the tranaction fall under 1031. It confuses me right now. They think the taxpayer only can pay the taxe on the difference (of what?). Should the taxpayer follow the 1031 rules exactly to defer the capital gain? If the 1031 exchange fails, does the taxpayer have to pay the capital gain tax on the sale of the property? Any input would be greatly appreciated. <_<

Thank you for your kind reply.

The client changed the sole proprietorship to the corporation in the middle of 2007. How do you treat the fixed assets existing on Schedule C? Do you treat it as sale of asset with no gain? Or do you just transfer assets to the corporation with the same data? If so, how do you inform IRS on the Form 1120 it is a tax-free reorganization? Any input will be appreciated.

In a tax free reorganization, the basis of the property received is the same as that of the acquired corporation's basis. My question is how I show the fixed asset on the ASSET ENTRY. Do I continue to use the original asset cost and date placed in service for the acquring corporation's return? Any input is appreciated. :rolleyes:

The taxpayer brought 1099 Line 3 Other Income not Line 7 Nonemployee Compensation. As I know, since he was the salesman for the commission, she should have received 1099 line 7 income and pay the self employment tax on the net profit. Would any of you comment on the difference between other income and nonemployee compensation? If I decide to go with as is 1099, can I claim the unreimbursed employee expenses on Schedule A? Or Do I have to report income on Schedule C and deduct business expenses there? Any comment is appreciated. :mellow:

I wonder if the payer has to issue 1099 Misc to subcontractor, the company with FEIN? As I know, the payer only issue 1099 Misc to the individual with the social security number. Would anyone confirm it? Thanks.

Is there anybody who handles the bookkeeping and financial statements for montessori kindergarden? I have one which is non-profit organization. Illinois State Attorney General Charitable Trust Bureau requests annual audited finanacial statement. I wonder if the kindergarden which is profit organization still needs to file audited financial statements to somewhere. Any advice would be greatly appreciated.

I am so glad we are all back here again. I was lost nowhere after the disappearance of the old ATX Community. Even I didn't participate in the discussions a lot, I enjoyed this site so much.