TaxConnections, Tax Question
Am I Better To Put Rental Real Estate In A Sub-S Corporation, An LLC Or A Partnership?

 

Every Friday, TaxConnections addresses a question submitted to our Ask Tax Questions platform. We ask our members to offer their thoughts on the question of the week. We realize you may need more information which you can request in the comments section below or on the TaxConnections website directly with our visitor.

Please comment below or login to TaxConnections to answer the Question Of The Week. If you are not a member of TaxConnections sign up here.

 

tax jobs, tax manager, north california

Kat Jennings, TaxConnections CEO and internationally recognized tax search consultant, has worked with many firms over the years. One of her clients is an East Bay Area boutique tax practice with former Big Four Tax Partners and has grown to around a 50-person tax practice. They offer a culture of support, respect, flexibility, and opportunity that is refreshing to experience these days.

Read More

MileIQ

We know that keeping track of mileage is a problem for all types of businesses, including nonprofits. That’s why we’re excited to announce a MileIQ partnership with TechSoup to bring the leading mileage logging service to nonprofits of all sizes.

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

Congress recently passed some legislation that changes the due dates of certain returns.  Partnership and S Corporation returns using a calendar year will be due on March 15 (two and one-half months after the end of the fiscal year). This is effective for tax years beginning after December 15, 2015.

C Corporation returns using a calendar year will be due will be due April 15 (three and one-half months after the end of the fiscal year). This is effective for tax years beginning after December 15, 2015 unless the fiscal year ends June 30, in which case it is effective for tax years beginning after December 31, 2025. Go figure.

The new law also changes the due date for the FinCEN Report 114 to April 15. Remember Read More

New business owners often ask, “How do I set up my business For Tax Purposes?” One of the choices you make when starting a business is the type of legal organization you select. This decision can affect how much you pay in taxes, the amount of bookkeeping and paperwork required, the personal liability you might be responsibility for, and your ability of borrow money.

For-profit businesses fall under one of four structures for tax purposes:

1. Sole Proprietor – An individual who owns an unincorporated business by themselves. Most small and home based businesses are sole proprietorships. For tax purposes, the business activity of a sole proprietor is reported on Schedule C of Form 1040. This is Read More

In the U.S. tax system, there is no characteristic of associations or entities (partnerships, corporations, and trusts) that corresponds exactly to the “nationality” or “residence” of individuals. For most organizations, however, there is a place – or at least a distinct legal environment – that establishes their existence and identity. This place, sometimes referred to as an entity’s “situs”, bears heavily on its taxation.

Corporations

The situs of a corporation is inextricably tied to the country of its incorporation. To that end, two simple words define the tax treatment of a corporation: “domestic” and “foreign.” A “domestic” entity (including a partnership or a corporation) is one “organized in the United States under the laws of the United States or of any State.” § 7701(a)(4). Colloquially, Read More

Basis is very important when determining gain or loss for certain transactions. It is also one of the limiting factors in determining how much loss can be deducted by partnership and S Corp shareholders.

What is basis?

For tax purposes, basis is the amount invested in a property adjusted for certain items.

Basis is usually equal to the cost, or the amount paid in cash, debt obligations, other property or services.

Basis in property is increased by capital items such as capital improvement and assessments for local improvement. Items that constitute a return of capital (e.g. Read More

Someone said, “The 3 C’s of life were: CHOICES, CHANCES and CHANGES. One must make a choice to take a chance or one’s life will never change”. We are faced with choice in every thing we do, and making the right choices requires sound knowledge of the various options available to us.

When choosing an operating entity for a company, it is very important that we thoroughly research the options available. Your business can be a sole proprietorship, a partnership with someone else, a single member LLC, a pass-through entity like an S Corporation or it can be a C corporation. What I will layout in this blog today are the characteristics of an Limited Liability Company and an S Corporation; the pros and cons of choosing each entity type; and converting from one entity to another. Read More