OldJack

At this time of the year I doubt they are going to make any program changes other than correction changes. It would take their full time just getting all the IRS forms updated since the IRS has not even released all forms. Then realize the approval process needed for state forms.

No changes.... the darn program is too slow and a memory hog as it is with bells and whistles that only a handful of preparers might use. A stock option calculation worksheet would be just another example, besides most companies granting such usually provide a completed worksheet with all the info needed for the taxpayer to prepare their tax return. I would be happy if they would just give me a program that didn't need updating every week.

I agree with Jainen. I would use the old (deceased) with the name.

Maybe you should just ask yourself, would the deposit have been deductible if he had not lost it?

I have lots of passwords to remember. Its no problem as I have designed a method for passwords. A set number of letters/numbers are standard in every password with a set number of letters/numbers from the website where the password is used. That makes it easy to remember (without a list) each password when I need it for a specific website. You should develop your own method and passwords are never a problem.

I would look closer at the paperwork. You said there was an "investment" and I would expect that the investment is in fact worthless and might be written off. The fact that an individual might make restitution is immaterial to the original investment instrument. Also, if your client "invested" in a debt instrument or stock I would not think it was a theft, rather it is a worthless security of a business that had a theft.

For a S-corp loss limited due to stock basis the 1040 for the loss year should have attached form 6198, " At-Risk Limitations". You then have the loss carryover established for the next years 1040.

>>Interesting thing to know, but I still haven't figured out why go to the bother of putting a SMLLC in the middle. Can you think of any reason? << Its as clear as the nose on your face, another layer of protection from liability. ??? Probably not. I expect the answer to your question is there is really no good reason and that is why the IRS was willing to decide as they did. It is 6 of one and a half-dozen of the other.

Well, lets split some more hairs. PLR 9745017 is a little misleading regarding the LLC. Having read the PLR it shows that the LLC is owned 100% by a trust so its the trust that is allowed as a shareholder of an S-corp by the PLR. Try having a single-member LLC 100% owned by a C-corp and see if you can get a PLR approval.

>>can make certain arrangements and elections to treat it all as one big happy family. << While it is true the S-corp can disregard the owned LLC for tax form filing purposes, the S-corp cannot ignore all the characteristics of the LLC's income and expenses. ie: LLC rental income and expense is still rental income and expense reportable by the S-corp.

>>Since an LLC is a disregarded entity << I would be a little concerned about completely ignoring the new location LLC owned by another entity as you still have the state statute to follow to keep separate accounting for legal purposes. Even if it is disregarded for tax purposes it is still in fact a legal entity that must account for its activities. In my opinion disregarded has to do with filing methods and forms and does not mean ignore. I therefore would treat startup expenses as such for the new location owned by another entity. I run into a dispute with another CPA, on another forum, where he insisted that a single-member LLC could just combine the LLC activity with all other 1040 Sch-C activities since it was a disregarded entity. I argued that although it could be combined in some cases it could not if there were passive activities or lack of material participation in the activities. In any case I file separate 1040 Sch-C's as that is what can be entered into evidence in court for the LLC. Then there is the argument that an LLC can own a S-corp. I think not.

>>Been missing your oneryness self much<< Well Veritas where have you been! I thought you were dead. I expect you have been hanging out with the wrong crowd on that other good for nothin forum? Most everyone over there are whiners wanting the authors to do their research for them.. you know better than to associate with those kind. I have no quarrel with your example. Its about time you gave one!

>>although he did create a new entity for new location. << The new entity must treat any startup costs as such on the tax return of the new entity. The number of locations/entities owned by an individual is immaterial regarding startup costs.

Employer should have treated it as employee payroll as that was the requirement. Since it was not it should be treated as 1040 Sch-C as it is earned income.

If a handicap person can do the job, any handicap they may have should be immaterial. Taxpayers should not have to pay for special jobs created just for special persons. If they can't do the job effectively the same as any other employee they should be fired the same as would be any other person.

You need to look again at the basis. Since a general partner must participate in every activity or decision of the partnership it is unlikely that such partner is not liable and/or have risk of the partnership thereby having basis for purposes of deducting losses. Losses are simply passed to the partners for possible deduction or suspension and you would not normally have a deemed sale of ownership with a capital gain/loss as you would with a S-corp. Remember in reality a partnership is nothing more than two or more sole proprietorships operating together.

Strange that ATX personnel find it necessary to outright lie about the reason ATX ended the forum. Then again, maybe the personnel were never told the real cause just like ATX never bothering to tell us they were going to drop it. In any case someone at ATX/CCH made themselves a costly error and should be fired.

If I understand your numbers and assuming shareholders have equal tax basis (1000+15058-635-12377+17000=20045) in the S-corp, then there is not a problem. The charity contribution goes on Sch-K and K-1 line 13 with the K-1 with one of the codes of 13A thru 13F depending upon the type of charity contribution. The contribution reduces each shareholders tax basis but it appears that as a group each has enough tax basis that it is not a problem . The AAA account on the books/tax return of the S-corp is allowed to have a negative number, it is the individual's AAA account "share" when related to his/her deduction and tax basis on the 1040 that cannot be negative. Nothing was really accomplished with the S-corp making the contribution since it is passed thru and deducted on the 1040 Sch-A.

Your "Facts and Circumstances" as stated should result in a waiver of penalties. Not sure I would mention the tax pro or his time involved. I would have stopped before the sentence "All paperwork was finally put together". That sentence and all after just sounds like an excuse and brings up questions of how long it took which the IRS might not agree. Remember, the IRS is not smarter than a 5th grader.

>>we do not get affected by hurricanes .....< Yeah, but you must get a lot of hot air from that building with the dome.

I agree that although a partner is not supposed to be considered an employee, sometimes it is best and the only good way for the person to have their taxes paid-in since they simply will not do the quarterly estimates. I have even had sole proprietorship clients in the past do W2 payroll withholding.

KC... everything you say is true, but there still is no requirement that a corporation has to have board of directors or shareholder minutes to present to an IRS auditor. Naturally the IRS would like to look at them if they exist but the IRS could hardly levy a penalty for not have them. And proper loan documents can't just be ignored/reclassified by the IRS because of no minutes that are not required. Don't misread my intent, I try to help clients with documenting loans and minutes as I agree they should be a matter of record especially in case of lawsuit.

Just stating the facts Veritas. I suggested a long time ago, to those authors, that they have more than one book. You just can't cover all the subjects with only one book. Now they are coming out with two which I expect will just be a split of the individual and business entities and enough added info to say they have improved. Quickfinder just keeps improving with even a 5th book on special taxpayers this year. Quickfinder books discusses issues while the other book only mentioning the subject. Now that might be considered a little dig.

I have Adobe Acrobat Pro 7 and a password can be set in order to open the file.

KC, I would agree there was a risk if you could point me to an authority for the IRS that requires minutes of the board of directors of a corporation.