Entity Classification Archives - John R. Dundon II, Enrolled Agent
-1
archive,category,category-entity-classification,category-738,bridge-core-3.0.7,qodef-qi--no-touch,qi-addons-for-elementor-1.6.3,qode-page-transition-enabled,ajax_fade,page_not_loaded,,qode_grid_1300,footer_responsive_adv,qode-content-sidebar-responsive,qode-theme-ver-29.9,qode-theme-bridge,qode_header_in_grid,wpb-js-composer js-comp-ver-7.0,vc_responsive,elementor-default,elementor-kit-269
 

Entity Classification

08 Jun

Posted at 00:00h in Employment Tax, Entity Classification, Paying Taxes, Payroll Tax Problems, Penalty, Small Business, Social Security, Social Security Tax, Sole Proprietor, Start up costs, Sub-chapter S, Tax Abuse, Tax Guidance & Preparation, Tax Problems & Requests

Many entrepreneurs get caught up in selecting the "most appropriate business structure" - particularly people planning to conquer the moon right out of the gate. If this is you beware as business structure is a determination that is best driven out of operational efficacy. Why? Most all new...

06 Feb

Posted at 00:00h in Employment Tax, Entity Classification, Limited Partnership, LLC, Material Participation, Passive Activity, Payroll Tax Problems, Small Business, Social Security Tax, Taxable Income, Uncategorized

In 1997, the IRS issued proposed regulations governing when the distributive share of partnership income for Limited Liability Company (LLC) members was to be included in self-employment income. It basically advised that an LLC member would be treated as a limited partner — and thus...

15 Jan

Posted at 00:00h in Business Expense, Business Income, Cash, Cash Transaction, Employee Business Expense, Employment Tax, Entity Classification, FICA, Income, Independent Contractor, Payroll Tax Problems

I was talking with a taxpayer the other day who registered as an LLC with Colorado Secretary of State. She developed an intriguing business model that is doing remarkably well according to the financial statement. As part of a tax planning conversation our discussion surrounding...

08 Feb

Posted at 00:00h in Accounting Method, Business Expense, Business Income, Car expense, Depreciation, Disallowed Expenses, Employee Business Expense, Entity Classification, FICA, Health Insurance, Hobby, Home Office, Husband/Wife, IRS Form 1040 Schedule C, Medicare, Net Operating Loss, NOL, Passive Activity, Self Employ, Small Business, Social Security, Social Security Tax, Sole Proprietor, Start up costs, Sub-chapter S, Tax Guidance & Preparation, Tax Problems & Requests

IRS Form 1040 Schedule C: Profit or Loss from Business can be a tough form to work through.  Tread lightly and seek guidance. The sole proprietorship or single member Limited Liability Corporation (LLC) is in my opinion the easiest type of business entity to set up...

22 Aug

Posted at 00:00h in Cost Basis, Disallowed Expenses, Entity Classification, NOL, Self Employ, Small Business, Sub-chapter S

Taxpayers who own shares in an S corporation are allowed pass-through losses to the extent of their basis (also commonly referred to as investment) under §1366(d) in their entity. Shareholders can obtain basis in a variety of ways such as direct investment, loaning the corporation money, contributing...

29 Jul

Posted at 00:00h in Abusive Tax Shelter, Entity Classification, Self Employ, Small Business, Sole Proprietor, Sub-chapter S, Tax Abuse, Tax Court, Tax Fraud, Tax Guidance & Preparation

To be taxed as an S corporation, a C corporation must elect S status by ï¬ling IRS Form 2553. Electing S status is fairly simple for a new or existing corporation, but meeting the requirements for S status can be more complex when the C corporation is not owned...

05 Jul

Posted at 00:00h in Appeals & Audit Resolution, Audit Reconsideration, Business Expense, Correspondence Audit, Deductible Expense, Disallowed Expenses, Entity Classification, IRS Audit, IRS Examination, Tax Deductible Expenses

The IRS has developed a rule of thumb for analyzing business losses called the Hobby Loss Rule of Thumb that basically says if a business reports a net profit in 3 out of the last 5 years it is presumed to be a for-profit business. Similarly...

22 Jun

Posted at 00:00h in Asset Classification, Capital Gain, Capital Loss, Cost Basis, Cost Segregation, Entity Classification, Estate Tax, Family, Gift Tax, Self Employ, Small Business, Sole Proprietor, Tax Guidance & Preparation, Tax Problems & Requests, Tax Relief

From a tax perspective the fundamental issue is whether a legitimate business purpose exists for the formation of a distinct entity to do a sale leaseback. If one exists and this is pursued all elements of the transaction should meet an arms length standard and...

Share