Talking with TaxSpeaker Video 117
1. Is it possible to now Elect to relinquish the carryback period for a 2018 loss that was not elected to be relinquished with the Original Return. I have stumbled upon Rev Proc 2020-24 that seems to indicate this is doable, but I'd prefer Bob's analysis.
2. I have a question on qualified leasehold improvements and how “related party” transactions come into play for the new rules. I have heard that this disqualifies you. For example if a Partnership owns a building and leases to a S Corporation and the owners are the same for both entities.
3. Here’s my question… Mary, age 63 has a low earnings record and her SS benefit will be quite low. John, her husband made approximately $120,000 per year for the bulk of his earning years. John dies at age 64. If Mary collects her survivor benefit before FRA, it will be permanently reduced, correct? What if she collects her reduced benefit now then at FRA switches to the survivor benefit. Will the survivor benefit also be reduced? Also, is it correct that delaying her survivor benefit beyond her FRA will not result in any increased benefit? In other words, if you are collecting off of someone else’s earning’s record there is no benefit to wait until age 70?
4. The Fiscal year end of the c Corp was 6/30/2020. They had an NOL. Did I need to make a special election to carry forward? It has been filed and the NOL schedule shows to carrying forward but I did not make an election - I believe the software did not take I to consideration the CARES act. Do I had to carry it back ? I want to carry forward , what do I need to do.
5. For an accrual based taxpayer, if PPP expenses remain non-deductible, are the expenses removed as deductions when incurred or when forgiveness is determined?
6. Bill spoke on Tuesday about Section 1202 stock. I heard him say there needs to be an election at the time the stock is issued in order to solidify the treatment. I did a bit of research, but I can’t find the verbiage for this election. Could someone please point me in the direction for this election? Perhaps I misunderstood what Bill said regarding the 1202 stock.
7. I have a client who he and his son owned a C Corporation that went defunct. The father (client) owned 40% and the son owned 60%. The father had loaned the business over $150,000, what are the options for the father to deduct this worthless loan on his personal tax return?
8. I have several clients that applied for the PPP loan that are in the Sch C no employee category. Unless I am missing something, the clients with profits over $100,000 it only makes sense to use the 24 week rule and the cap of $20,833 for owner compensation which is higher than the loan proceeds of $20,800 that they received and apply it all to payroll even if they paid rent during those 24 weeks as they have far exceeded the loan proceeds in that period with compensation and rent. Am I looking at this correctly?
9. 100% Shareholder Client wants to convert his Incorporated Corporation ( a service based corporation currently taxed as an S corp) to an LLC (electing to be taxed as an S corp) under asset protection advice from his attorney. To avoid liquidating the Inc into the LLC and recognizing gain on the “sale” of the assets with FMV of $235,000 and 0 tax basis, could we not merge the Inc into an LLC in a tax-free reorganization under section 368(a)(1))F)? See Letter Ruling 9636007. If this doesn’t work, other suggestions would be welcome.
10. Two brothers inherited their fathers home, they got a certified appraisal for 32k and then donated the property to Habitat for Humanity. Can you please explain what is required to take a deduction on the Schedule A? Does the appraiser and done have to sign the 8283?
11. Client has a 2019 NOL ready to be carried back to 2014. But in 2014 he was married. Nasty divorce. Can we carry back his loss to a MFS 50% (or his half) of the original 2014 return. Or is he stuck carrying forward or forced to deal with his EX? Thank you for your help with this?
12. I have a question. Partnership liquidates with real estate as the only asset that the partners receive (the only asset the partnership has). One partner has no outside basis in the partnership. Does the partner with no outside basis have to increase basis to zero and negative capital account to zero (had a negative capital account upon liquidation) and include that increase back to zero as ordinary income (subject to SE tax) and then have zero basis in the distributed real estate?
13. Question regarding a divorced couple. They owned a house and working farm. They are now divorced and want to sell the property. Husband want to do a 1031 on his portion of the farm property. Wife wants to receive her portion of proceeds.. Ignoring Sec 121 for the principal residence, can H execute a 1031 exchange?
14. Retired minister has been taking deduction for housing expenses against his pension. He has dementia and will be moving into a nursing home. Can he and his wife still claim housing allowance against pension even though he won’t be living there?
15. My client owned 100% of a C-Corporation with a 6-30 year end. He then sold all the shares to another person. The new person without consulting his accountant or me, used LegalZoom to file a S-Corporation election and it was accepted for the period beginning July 1, 2020 and ending December 31, 2020. When I found out about this I talked to the shareholder about reasons that this was not a good decision and he agreed. The question is how do I revoke this election and revert back to a C-corporation with the old year end of 6-30. Is there a form to file or a statement. If a statement is necessary what needs to be included on the statement and finally where to I file the statement.