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Question: When depreciating real property by the straight-line method should you use 31.5 yrs. or 39 yrs.?

In the IRS Publication 946 (2007) for depreciation of non-residential real property by the straight-line method (Chart 2 located on Page 70), it gives two different time periods- one for 31.5 yrs. and the other for 39 yrs. Do I have the option of using either one, or is there a distinction between the two that I am not aware of?

Answer: IRS Publication 946 covers all allowed and allowable depreciation methods – long story – regarding the income tax consequences. There is MACRS and there is the ADS – alternative depreciation system. Now please scroll from Chart 2 down to page 74. There is Table A-7a: straight line 39 yea rs.

You may depreciate non-residential real estate over a period of 39 years. If you meet ALL of the the requirements, stipulations and restrictions, the IRS will allow you to depreciate over 31.5, subject to depreciation recapture. That’s IRS logo for you may have to report income if you sell the investment, or a few other tax circumstances along that line. I practiced as an enrolled agent and frequently heard from clients and taxpayers that they can save a lot on their taxes by double declining method depreciation, Section 179 and another method that expired on December 31, 2006 and is still allowed in a very few states in a very limited way. I always had to caution my clients not to listen to all the hype that comes from sources trying to get you to spend you money on them for poor advice that does not take in to account future consequences. Unless you are very sure of your income tax situation 20, 25 years down the road, I would not accelerate it. Good luck

What To Buy And Expense Before Year End

So if you’re about to buy a new copy machine, lathe, or Zamboni for your small business, should you

Depreciation: Modified Accelerated Cost Recovery System

Question: If you file your taxes with the IRS, but they have your old address, what happens?

Answer: Your address is changed to what you put on your current return.

SEC: Is Medifast Complying With Revenue Accounting Rules? – cbl

By Sam E. AntarTo Securities and Exchange Commission Chief Accountant Wayne Carnall:In my first Ope…

How to File a Tax Extension if You’re Running Late on Taxes

Alabama A&M President: Tuition hikes needed to make up for lost time

President said school trying to play “catch up” in funding.

2005 Yamaha Kodiak 400 irs 4×4

Question: What are the benefits of starting a LLC instead of filing a Schedule C?

I’ve been doing some consulting work on the side and filed a Schedule C last year (and plan to do the same this year) as a sole proprietorship. My “office” won’t qualify for the IRS’ rules about claiming a home office, so I pay taxes on almost all of what I make. Would finding some other business structure help me save taxes?

Answer: There’s not much difference in tax benefits, the biggeet benefit in LLC is that you can’t have your personal assets given to a plaintiff in a lawsuit because you’ve segregated your personal life from the company’s.

Going into business with a foreign partner

Dear Tax Talk, I am a U.S. permanent resident with a green card and am planning to start a company with a partner who is a foreign resident. I have the following questions:

Ch. 2 IRS; LLC Tax

Question: TurboTax & taking passive losses in the year you dispose of your entire interest in the passive activity.?

Generally, the passive activity loss rules state that you can’t get a tax benefit this year for losses you have from passive activities unless you also have income from other passive activities.

However the IRS also says :

“Any passive activity losses (but not credits) that have not been allowed (including current year losses) generally are allowed in full in the tax year you dispose of your entire interest in the passive (or former passive) activity.” Please see IRS Publication 925 (http://www.irs.gov/pub/irs-pdf/p925.pdf) page 9 under Dispositions.

This is the question.

In 2007 we “disposed of your entire interest in the passive (or former passive) activity” How do we tell TurboTax we disposed of our entire interest and want to take all current and prior years’ passive losses. I’ve entered the K-1 for this investment as well as the long-term gain on the sale. In neither place did TurboTax ask about unallowed passive losses

Thanks

Answer: You need to complete Form 8582 to computer your allowable loss from passive activities. The instructions are at the link below.

TurboTax should have a 8582 form built in. You might have to select the form from the forms toolbar at the top.

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Abstract: If implemented as enacted, Obamacare will impose significant new Medicaid costs on states and constitute a major federal usurpation of long-standing state authority in regulating private insurance.

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