OldJack

The loss on line 14 is a business loss when determining if there is a 1040 Net operating loss that may be carried back or forward. The loss is therefore deducted against ordinary income and if no ordinary income in the current year it becomes a part of a NOL.

Have to admit one of my S-corp clients had a small loan balance after I did his taxes this year. If the loan is less than $10,000 its usually not a big deal. However, this year I had a C-corp client that paid $20,000+ in personal expenses so I prepared a 1099DIV. You got to use some common sense with these things depending upon the facts and circumstances. :wacko:

No doubt your client will get the maximum alright.

>>Nothing. I didn't know the answer<< Oh... that makes perfect sense. :P

I don't know what hate the bankers has anything to do with your questions. However, your client's situation is difficult to give an answer for since there are a lot of facts that you must establish. Here are some items for your thought: 1) You say he sold some equipment which I presume was a distribution to him from the LLC and that must be reported on form 4797 with recognizing gain or loss from the items tax basis in the LLC. 2) If the loan was from the bank to the LLC, with his personal guarantee, I would deduct his principal and interest payments as a bad debt on form 1040 Sch-E, page 2. 3) If the loan was to him personally and the LLC owed him, then the loan payments are not deductible but the loan to the LLC would either be a bad debt deduction on 1040 Sch-E, page 2, OR it would be a part of his LLC tax basis for capital gain/loss. Such classification may depend upon proper documentation of the loan, no documentation then capital gain/loss for 1040 Sch-D. Other LLC partners obligations are irrelevant to your clients current tax situation. Protecting his good credit is irrelevant. His starting a new business is irrelevant.

I would prepare form 1065.

I agree with KC. I would not even consider filing a partnership on 1040 Sch-C. There are just too many reasons not to file Sch-C, KC and others have pointed out the main one with item #2.

You answered all your questions correctly. It would all be travel expenses as long as the expenses are reasonable.

>>this thread is about not filing any return, final or otherwise<< Well.. I first suggested he ask his attorney since he obviously takes his attorneys advice. LOL

>>After that he totally forgot about it.<< Well... I don't buy that story. He should probably ask the attorney what to do. If he files nothing the state will probably cancel his charter and that will be the end of it. The IRS may send him 1120 forms and to get rid of them he could check the box final return sign and send in.

Truth is that the OIH deduction is usually so small that it is not worth the time and effort in taking.

That person should file form 1040A and write the words “Stimulus Payment” across the top of the form you file. see the IRS example by clicking on the link "Sample of filled-out Form 1040A" at: http://www.irs.gov/irs/article/0,,id=177937,00.html

You are never to old to commingle!

I agree

I completely agree with not violating the passive loss rules and the requirement that passive loss activities must not be combined with active activities. However, I generally disagree that multiple proprietorship business activities cannot be treated, reported, and in fact operated as one business. The IRS has no authority to tell a business owner what activities his business cannot conduct or how he conducts them. The 3 business activities mentioned in the original post appear to be legal activities that could be conducted in one business entity of any tax type. That is not to say that the owner should be using only one business entity since there are other reasons not to, but for tax purposes there is no reason that he can't.

>>wow.... I didn't know I could draw circles with letters inside. Now that is cool. Wooohooooooooo!!!!!!! << Here are a few others. Hold down the Alt-key and enter numbers on the 10 keypad: Alt 0167 = § Alt 0169 = © Alt 0174 = ® Alt 0188 = ¼ Alt 0189 = ½ Alt 0190 = ¾ Alt 0176 = ° Alt 0177 = ± Alt 0162 = ¢ Alt 0182 = ¶ .

You are welcome JRS. I have been amazed that over 100 have downloaded the spreadsheet. I assumed everyone had something similar. This is using the average cost method approved by the IRS to determine cost of sale. From the menu select protect the sheet and the enter-key will move the cursor only to the color input fields.

>> thanks _so_ much for sharing!<< You are welcome.. hope it works for you.

Well... I look at it a little different than Maribeth. During the lease period the leasehold item could be removed and sold since it does not become property of the landlord until the lease expires. Therefore, it appears to me that this is a tangible business asset and that the sale would be reported on form 4797 subject to recapture as ordinary income if there is "Nonrecaptured net section 1231 losses" from prior years (4797, line 8). As to depreciation recapture it would depend upon the leasehold asset classification, as an example if it was carpet it would be §1245 recapture subject to ordinary recapture, or if building structure, such as a fixed wall, it would be depreciated under §1250 and not subject to recapture as ordinary income.

Single member LLC is disregarded so you would report real estate rental activity on 1040 Sch-E, page 1. Schedule E losses may be limited.

I have never seen instructions to report IRD income on line 21. Normally IRD income is require it to be reported on form 1041 and according to its tax attributes. Instructions for form 1041, page 3: >>Income. When completing Form 1041, you must take into account any items that are IRD. In general, IRD is income that a decedent was entitled to receive but that was not properly includible in the decedent’s final income tax return under the decedent’s method of accounting.<< >>The IRD has the same character it would have had if the decedent had lived and received such amount.<<

The macro warning is just routine with excel. All formula and the worksheet was designed and made by me. I use it for clients that the broker doesn't provide tracking. Yes, you can delete the data as that was real data for a client that I just did the other day. I left the data to show how it works. Protect the worksheet and data input will be limited to the color fields.

In most cases I would agree with Michael Mars. However, we should not confuse business operation expenses (telephone, office supplies, etc) as not allowable just because of the type/classification of income. As an example a dairy farmer may show a large loss on form 1040 Sch-F but have an overall profit due to a gain from the sale of purchased dairy cattle on form 4797. It is possible that this original poster business could have deductible business expenses/loss for 1040 Sch-C (or 1065) with capital gains from 1040 Sch-D. You have to look past the forest (outside the business profit type form) and look at the trees (classification of the transactions).

It is irrevelant as when the account changed! It is who inherited the account and when.

A simple spreadsheet does the job. mutualfd.xls