OldJack

With 8 sales they may very well have ordinary income. However, every single asset is classified according to how it relates to the tax code, rules, regs, etc, and the business regardless of the number of sales. There is no reason that 1, or more, of the 8 sales could not be an investment asset and the others inventory. This is true regardless of the type of tax entity or the fact that the owner/business may be a trader or professional real estate dealer. This is why every type of income tax return (1120,1120S,1040,etc) has a form Sch-D as well as form 4797 that can be attached. Its not right that taxpayers should pay more taxes than required just because the tax preparer does not want to perform due diligence and properly classify income.

>> brother who inherited assets<< On and after the date brother inherited the assets the income belongs on brother's tax return regardless of account social security number. If brothers name was on the account, then the account income was not taxable to the estate after the date of death.

I agree that in my opinion it is investment property, code section 1221, reported on 1065 Sch-D.

Each income should be taxed on the tax return of the person(s) that got the money except for the period the estate has not or was not distributed which would then be on form 1041. You may need to allocate the 1099's between form 1041 and others. Report the items on the proper allocated form with the SS# or Fiduciary # in the description.

Assets must continue to be depreciated, even if they are temporarily not being used. Depreciation continues until the asset is sold, retired, abandoned or otherwise disposed. P.Dougherty Co., 35 AFTR 669 (4th Cir. 1946): D.L. Hamby, TC Memo 1988-555

Deductible.

Well there you go again assuming what someone said when what they said was not what you might think they said.

I certainly don't expect any such request on any of my comments. The last email I got from ATX was a few years ago (from that ATX pony tail guy) and was a threat to sue me for saying something about ATX that he didn't like. I don't understand it.. I'm a nice guy. Don't think I dislike ATX software, I still have my 1992 program disc and all after. I can't remember, is there one older than that?

>>How stupid can I be<< Yep... but not to fret! There really is nothing wrong with a partner getting a W2. Sure its not in accordance with what IRS says but it is a good thing to do for some partnerships that otherwise would have partners not paying their taxes. Its not likely the IRS will complain since they got 940 taxes they would not have gotten anyway. Also, not to fret! Since it is a partnership of husband and wife you are allowed to ignore the partnership and file it on 1040 Sch-C. I have seen a few cases where it was best for a proprietorship to have the owner on a W2. I would not bother to change anything. But then I don't mind other preparers criticizing me for not following the letter of what IRS wants and dictates.

I would probably let a dead dog lay and not stir up a stink.

Not likely correct. FMV and rebate, as such, have nothing to do with the new basis. The new basis is the net book value of the old vehicle plus what ever is paid (or will be paid by recorded liability) for the new vehicle. The liability or amount owed can be only the principle (tax purposes) or full payments including interest (tax purposes & GAAP). .

Lets play nice guys! You might hurt my feelings.

A mileage reimbursement policy is that of the employer and may vary in whatever the employer approves. However, a mileage "allowance" is W2 taxable income to the employee regardless of the actual miles driven, however, the employee is allowed to deduct actual or standard milage costs on form 2106.

sure... my thought is that his loss is sinking with the IRS since it is not deductible.

Yes, SE tax, if the commodities were sold. The commodities have the same classification in the hands of the wife as they did in the hands of the husband. Husband gets a Sch-F deduction only in the year wife sells and wife has Sch-F income in the year sold subject to SE tax. No payroll employment taxes.

One hundred senators, 435 congressmen, one president and nine Supreme Court Justices - 545 human beings out of the 300 million - are directly, legally, morally, and individually responsible for the domestic problems that plague this country.

I usually transfer assets at basis if the corporation is a single owner, however, technically the assets are transfered tax-free at fair market value. But, the assets transferred under code §351, tax-free, still carries a tax basis of the shareholder's basis and therefore the excess of fair market value over the shareholders basis is not depreciable by the corporation. Thus the corporation in reality continues the depreciation schedule of the 1040 Sch-C.

I have been an ATX customer since before it was called ATX. My practice is mainly business tax returns and I don't understand why you think it is not the best for business tax returns? About the only individual tax returns I do are business clients with complex returns. I agree that ATX is not for those that do not know which form to enter transaction since it is a forms based software.

Another thought is the IRS uses 5.5¢ per personal mile for gas provided by the employer in the method when the employer is adding to the W2 using the Annual Lease Method for personal use of an employer provided vehicle.

>>There seem to be quite a few topics where, like this one, Quickfinder offers a more useful position or at least better explanation and support. << Jainen you are being too nice. I also took a look and found it to be lacking and misleading in many subjects. I would not rely on That Tax Book's opinions and therefore subscribe to Quickfinder and other resources. If a tax pro is only using That Tax Book as their tax resource they may be gambling with their reputation and malpractice insurance.

>>in Michigan the real estate "belongs" to whatever state it's located in.<< Michigan taxes?? Is that foreign taxes??

As an "employee" of the LLC he simply receives his employee earnings as "guaranteed payments for personal services" in box 4 of the 1065k-1 subject to SE tax. edit: Although it is not technically correct, I have had partnerships that treated certain working partners as payroll employees and issued W2's for such work. It appears that the IRS gets the same taxes and on audit does not make an issue of the fact. Of course it cost the partnership extra for certain taxes such as unemployment tax.

This goes on 1040 Sch-B input as interest on the 1099-INT tab the same as you would any interest.

You may be wrong! It is common that the sale of real estate requires a tax return and taxes paid for the local state with a tax credit for the taxes paid on the state of residence. Utah will be looking for taxes.

>>Sounds like a ploy to bill for 2 tax returns. << I agree with Maura. Unless the couple are planning to divorce I can't imagine that it would do anything but cost them taxes.