We want to defer guaranteed payments in a partnership and still show it as a liability in the financial statements for GAAP purposes; however not in the K-1’s (as this will generate taxable income). Is it possible?
TaxConnections provides an option for tax professionals to comment below on our Tax Blog; or if you are a tax professional and want to have your tax answer rise higher on the search engines and lead back to you, please join us as a TaxConnections Member.
Do you take notice when it comes to new California tax laws and updates? Here is one that taxpayers and tax preparers alike will want to pay attention to.
There is a general rule that no gain or loss is recognized to a partnership or to any of its partners in the case of a contribution of property to the partnership in exchange for an interest in the partnership. However, there may be some opportunities for U.S. persons contributing property to U.S. partnership with foreign partners. The partnership can be either U.S. or foreign. Congress realized that due to the loophole, taxpayers might use a partnership to shift gain to a foreign person. Read More
Tax Partner/Tax Director- Family Wealth Expertise
TaxConnections has been retained by a client to locate an individual who has substantial tax expertise with high net worth individuals and a family office background. Our client is located in California and will be responsible for guiding the family in individual tax, trusts, estate tax, partnership tax, Subchapter S tax, gift tax, and private foundations. Read More
September 15 – Corporations
File a 2014 calendar year income tax return (Form 1120 or 1120-A) and pay any tax, interest, and penalties due. This due date applies only if you timely requested an automatic 6-month extension.
September 15 – S Corporations
File a 2014 calendar year income tax return (Form 1120S) and pay any tax due. This due date applies only if you requested an automatic 6-month extension.
September 15 – Corporations Read More
If you have a calendar year 2014 partnership, S-corporation, or trust return on extension, don’t forget the extension for filing those returns ends on September 15, 2015.
Pass-through entities such as Partnerships, S-corporations, and fiduciaries (trusts, estates) pass their income, deductions, credits, etc., through to their investors, partners, or beneficiaries, who in turn report the various items on their individual tax returns. Partnerships file Form 1065, S-corps file Form 1120-S, and Fiduciaries file Form 1041, with each partner, shareholder, or beneficiary receiving a Schedule K-1 from the entity that shows their share of the reportable items.
If all of the aforementioned entities could obtain an automatic extension to file their returns Read More
The three month highway funding extension was passed by the House July 29 and by the Senate July 30. The president signed the bill into law on July 31. The law contains several important tax provisions changing the due dates for partnership and C corporation returns, FinCEN Form 114-Report of Foreign Bank and Financial Accounts (FBAR), several common tax returns and several other IRS information returns It also overrules the Supreme Court’s Home Concrete decision, requires that additional information be reported on mortgage information statements, and requires consistent basis reporting between estates and beneficiaries. Read More
File An Automatic Extension Request TODAY – IRS Form 7004
The Business and Partnership Tax deadline is coming up fast! Don’t sweat it!
File IRS Form 7004 to apply for Automatic Extension of Time to File Certain Business Income Tax.
If you happen to be compelled, feel welcome to check out the instructions for IRS Form 7004.
If you need help, contact me and one of my trusted lieutenants will take care of this for you TODAY. Read More
Last Tuesday, IRS Commissioner John Koskinen addressed the New York State bar Association Tax Section in New York. His comments provide keen insight into the going-on’s at the IRS. Mr. Koskinen’s most important announcement centered on the agency’s anticipated reduction in the number of rulemaking projects as a result of budgetary constraints.
Although releasing guidance is one of the agency’s core functions, there are simply not enough attorneys in the Office of Chief Counsel to shoulder the burden. Nor are there any plans on the horizon to hire more workers, in light of the agency-wide hiring freeze.
“Our office of chief counsel continues to make every effort to issue guidance in a timely Read More
We Have Been Waiting For This!
The IRS has released IRS Notice 2015-13, which provides transition relief given the late retroactive renewal of the Work Opportunity Tax Credit program in December 2014. Notice 2015-13 waves the 28-day deadline for submitting IRS Form 8850 (the WOTC Pre-screen Notice) for qualifying employees hired in 2014. The extended deadline for submitting the applications for affected employees is now April 30, 2015.
From the Notice:
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 the distributive share would NOT be self-employment income– unless the LLC member either:
• had personal liability for the debts of the LLC under state law (this would be pretty rare)
• had authority under state law to contract on behalf of the LLC, or
• participated in the trade or business of the LLC for more than 500 hours during the year.
This is significant because the treatment of an LLC member’s distributive share of Read More
On January 30, 2014, Treasury and the IRS issued Proposed Regulations with respect to the disguised sale rules and the rules for allocating partnership liabilities (REG-119305-11). A major driving force behind these Proposed Regulations was the IRS’s victory in Canal Corporation and Subsidiaries, formerly Chesapeake Corporation and Subsidiaries v. Commissioner, 135 T.C. No. 9. (2010). In Canal, the Tax Court shot down a leveraged partnership structure by concluding that the contributing partner did not have a payment obligation with respect to the partner’s indemnity in large part because the terms of the indemnity were not commercially reasonable. Read More