Blog Archives

IRS Form 1099-misc Filing Requirements Defined as per IRC 6041

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

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

General Rules for S-Corporation Distributions A Random Walk Down IRC 1368

Unless you elect different treatment, for shareholder income tax purposes S corporation distributions are applied in the following order: 1. To reduce the Accumulated Adjustment Account (AAA) determined without regard to any net negative adjustment for the tax year but

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Posted in Asset Classification, Capital Gain, Corporation, Income, Self Employ, Small Business, Sub-chapter S, Tax Guidance & Preparation, Tax Preparer, Tax Problems & Requests

Investor or Trader

I have another new client who is a day trader and wow is he good at it! Even though he has another job he makes so much more money as a trader that this ultimately is his primary vocation. The

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Posted in 1031 Exchange, 1231 Exchange, Business Expense, Business Income, Capital Gain, Capital Loss, Income, Investment Income, Mark to Market, Self Employ, Small Business, Tax Deductible Expenses

Centennial Anniversary of the 16th Amendment to the US Constitution is approcahing

Most anniversaries are celebrated with joy and jubilation.  But on February 3rd, 2013, I doubt that anyone will be celebrating this anniversary or should I say centennial - after all, it is the  100th anniversary of the 16th Amendment to

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Posted in Income, Tax Guidance & Preparation, Tax Relief, Taxable Income

IRS Can Levy More Than 15% of Social Security Benefits According to Bowers V. US

The distinction of how this is possible distills down to understanding the nuanced difference between a 'Continuous' and a 'One Time' IRS tax levy. Under Code Sec. 6331(h) once a tax levy is approved, the effect of the levy on specified

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Posted in Back Taxes Owed, Income, Intent To Levy, Intent To Lien, IRS Centralized Insolvency, IRS Collections, IRS Enforcement, IRS Levy, IRS Lien, Social Security, Social Security Tax, Tax Court, Uncertain Tax Position

What $$ IS Taxable: IRS Publication 525

Business Entity Selection and the Tax Consequences of Converting

I've been engaged in a running dialog with extraordinary nuances as to whether a loosely organized group of people are or are not fully recognizing taxable revenue from engagement in barter transactions with each other. The nuances inside this topic

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Posted in Barter, Gift Tax, Income, Tax Fraud, Tax Guidance & Preparation, Tax Problems & Requests, Tax Records, Taxable Income

IRS Rules for Providing K-1’s Electronically: Rev. Proc. 2012-17

Certain entities, such as partnerships, are required annually to file K-1s with the IRS and provide a copy to their partners. The IRS estimates that partnerships filed almost 26 million K-1s during 2011. Revenue Procedure 2012-17 provides new rules describing when partnerships may

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Posted in Corporation, Income, Partnership, Small Business, Sub-chapter S, Tax Guidance & Preparation

Unemployment Benefits and the IRS

Business Entity Selection and the Tax Consequences of Converting

Unemployment compensation generally includes, among other forms, state unemployment compensation benefits, but the tax implications depend on the type of program paying the benefits. You must report unemployment compensation on line 19 of Form 1040, line 13 of Form 1040A,

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Posted in Income, Tax Guidance & Preparation, Unemployment

Income Tax Based Financial Statements

Business Entity Selection and the Tax Consequences of Converting

Enrolled Agents generally tend to avoid preparing financial statements for their business clients due to the regulation of the CPA profession where preparation of these statements has been associated with services enrolled agents were not permitted to perform. However I believe it is not

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Posted in Income

Taxable Incove Vs. Financial Accounting Income

Daniel N. Shaviro (NYU) has published The Optimal Relationship between Taxable Income and Financial Accounting Income: Analysis and a Proposal, 97 Geo. L.J. 423 (2009). Here is the abstract: The persistence of the book-tax gap, or excess of companies’ reported

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Posted in Income
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