April 5th, 2023
David brought a case study we had worked on previously in a private session. He had continued to refine it and brought it to the lab session to finalize. What we worked on in the lab was the timing of some of the issues. This was a new client with some back-work and some opportunities in prior years. One opportunity was to claim real estate professional status in 2021 and to do a cost segregation in that year. That year is already under audit due to errors with a prior accountant and they are likely losing large deductions due to this examination. The plan also included an amendment of a prior year to pick up suspended passive losses that were not addressed during a change of accountants. Our work in this session was mostly to get the timing of those transactions properly reflected and tidy up the plan.
Lisa brought some good questions on a case she has started. She previously presented to the lab session but had some additional questions. She was inquiring mainly about the client’s Montana LLC and various issues that could arise from that, and what the existence of the Montana LLC for a non-Montana resident could tell her about the transactions
The session turned into a bit of a Q& A session.
Question 1
If a strategy them lowers them by more than 1 tax bracket, should we split the plan and savings up into the separate tax rates or take a weighted average? If we leave it all in one bracket on the plan, it may leave too much room for inaccuracy on their tax savings.
Question 2
Client moving from Utah to Texas. Pear Orchards set up in a CCorp. CCorp has many NOLs. What happens to the NOLs when they shut the partnership down?
Question 3
Spouse-partners are selling membership interest in LLC. The LLC only has equipment, and a rental property. They are keeping 2%. They have $300K of suspended losses from the rental property. What happens to those suspended losses? I don’t think they will be able to take the losses unless they show a complete sell. Recommend looking into a tax free reorg with a CRT
Interesting note: The rental property will no longer be a rental by the time of the sale. What if they show it was taken out of service…would that free up the suspended losses?
Question 3
Clients are partners in different state. LLC is registered in a tax free state, then registered in Virginia because one of the partners lives there. The Washington partner files nonresident withholding where should she file and register? The class gave her some multistate guidance. Basically, follow nexus rules and file where you should file.
This class had a lot of them asking me random tax questions and me googling stuff…NOT TAX ADVICE, just a demonstration of google skills
April 12th, 2023
No Case Study today - instead we used the time for a Q & A. Jackie also announced the opportunity to be selected for partner tax plans this coming summer.
Question 1
Converting a house into a short term rental. Is this treated as a schedule C or E?Question 2
Accountable plan for SCorp - Can we go with actual expenses for the car and depreciation, instead of standard mileage?Question 3
Dr. opened a practice, she was on a schedule C for 2021. Is there anything I can do for 2022?
Question 4
Tax Credits for Secure Act 2.0 - Any guidance for this? I have a potential client who bought a building (commercial) and they want to make upgrades.
Question 5
Is it possible within the bonus depreciation to take the full amount of depreciation up front and still give them the loss on Schedule C?
Question 6
SCorp that I have already prepared the tax return for. They have just informed me that they own 20% of a foreign corporation in Belarus. It will pay them dividends in the amount of $140,000 for 2023. Do I report ownership of the foreign corporation on the 2022 tax return?
Question 7
I have become a certified social security analyst. I want to move money from deferred benefit accounts to a Roth to make their social security less taxable. How can I present this in TaxPlanIQ?
April 19th, 2023
After the busy tax season, we checked in with each of our attendees. We discussed what went well, what they will change before next year, and shared tips and practices to make tax season less of a burden on everyone. In addition, Jackie and Veronica presented the questionnaire feature within TaxPlanIQ - a feature that helps you identify potential tax planning clients more quickly and efficiently.
April 26th, 2023
Today we looked at a question brought by Karey. She has a Schedule C client who builds medical buildings. In 2021 he had a Schedule C income of $350k, in 2022 it was $800k, and 2023 will be $2.5m. Is it possible to do an S Corp? The client does business in LA, AR, AL, TX and possibly will be adding a few others. Also, some states seem to say that it is a disregarded entity so no state tax. Is this true? Could we conisder No Selection here?