Labels: realty

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/28/2007 09:35:00 PM Send this post:

Labels: comix, IRS

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/28/2007 02:51:00 PM Send this post:

Anyone who understands the future of the current Ponzi Scheme setup for Social Security knows that the only way it can continue to survive is to increase the tax rate and the amount of income subject to the tax, which is FICA for W-2 wage slaves and Self Employment tax for those of us in control of our own income.

My long running prediction that the ceiling on the income subject to the tax will be removed completely is still on target and should be implemented shortly after the Dems take control of the White House. In the meantime, Spidell just sent out an email with the following scheduled increases in the taxable income base according to the SSA's projections.

2008: $102,300
2009: $106,800
2010: $111,600
2011: $116,400
2012: $121,500
2013: $126,300
2014: $131,700
2015: $136,800
2016: $141,900

As I have been explaining for decades, there are very legitimate ways to reduce or possibly eliminate the requirement to pay any Social Security or Medicare tax by the proper use of other legal entities, such as LLCs and corporations. Any good tax pro should be able to help clients set things up to accomplish this.

Labels: SSA

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/28/2007 11:50:00 AM Send this post:

The financial and actuarial assumptions and predictions for Medicare are the same as they are for Social Security; which means that fewer workers are forced to shoulder the cost for more retirees each and every year until they reach their breaking points and the programs collapse.

Labels: comix, SSA

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/27/2007 09:20:00 PM Send this post:

Q-1:

Subject: Vineyards and Section 179 depreciation

Hello --
According to your website Vineyards are eligible for section 179 expense election.

However, the IRS is taking a opposite position. Can you please provide me with your reference.

THANK YOU.

A-1:

That list of qualifying assets was from the QuickFinder Depreciation Handbook. I just checked the online version of that handbook and it is still included there.

I also just checked IRS's Publication 946 and don't see any mention of vineyards not being eligible. Where exactly did you see that IRS doesn't allow it?

Kerry Kerstetter

Q-2:

Kerry -- email me with your fax phone number and I will fax you the IRS article. It is from a July 2006 Farmer publication. And, there is a very recent court case that reinforces that Vines are considered land improvements and NOT eligible for 179. I am a CPA in the Sonoma Wine Country, and this is a HUGE item in my practice...

A-2:

I would like to see a copy of that article.

I'm curious to see whether it cites an actual IRS regulation or is just someone's opinion as to the applicability of Section 179. I haven't actually prepared any tax returns for any vineyards; so I can't say that I have seen it actually be accepted by IRS. Since relocating from the Bay Area, most of our Schedule F clients are involved in beef and poultry production.

However, Vineyards have been listed in the QuickFinder books for several years as qualifying for Section 179 and my experience has been very good with the accuracy of the QuickFinder books for the 20+ years I have been using them. In fact, I have frequently used copies of pages from the QuickFinders books when defending positions we have taken in cases under IRS audit and Appeals and they have been accepted as valid every time.

Thanks for sharing that article with me.

Kerry Kerstetter

Q-3:

Kerry --

I just faxed you the IRS article on farmers about Code Section 179.

Below is a link to the recent court case, where on page 26 this position is again referenced.

I am 100% confused....as I believed that Section 179 was re-written and the definition of Section 179 property was the old Section 38 (ITC definition).

I am not a tax attorney, and I am very concerned about this issue.

A-3:

Thanks for faxing that clip from the IRS website and sending the link to that Tax Court case.

I do find it quite interesting that they are relying on such an old Revenue Ruling, from 1967. It has always been my understanding as well that Section 179 assets are the same kinds that would have qualified for the Investment Tax Credit under Section 38. This had most often hinged on the items being movable rather than affixed permanently to real property.

Reading the Revenue Ruling, I noted that it actually only refers to trees and not to grape vines. Since mature trees, with their larger and deeper roots, are less movable than are grape vines, it would be much more difficult to apply Section 179 to them.

The Trentadue court case you sent seems to be addressing established vines that are acquired as part of an overall property purchase. Claiming that 100 year old vines are movable does become more difficult than to apply that distinction to new vines that are being planted for the first time.

As I said before, I haven't really had any need to investigate this issue this deeply before. It is a very interesting question, and I hope that other readers of my blog who have some real world experience with applying Section 179 to grape vines will be willing to share any additional info and insight they have.

Kerry Kerstetter

Labels: 179

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/27/2007 08:46:00 PM Send this post:

(Click on image for full size)

It's no surprise that the DemonRats have more Marxist plans for dealing with the AMT problem.

Labels: AMT, comix, IRS, politics

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/26/2007 05:04:00 PM Send this post:

Labels: comix, cpa

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/24/2007 05:13:00 PM Send this post:

Labels: comix, IRS

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/24/2007 01:06:00 PM Send this post:

Labels: comix, politics, taxes

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/23/2007 03:13:00 PM Send this post:

Labels: comix, taxes

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/23/2007 03:05:00 PM Send this post:

Labels: comix, taxes

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/23/2007 03:00:00 PM Send this post:

Labels: comix, stocks

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/23/2007 02:52:00 PM Send this post:

Labels: comix, scams, SSA

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/23/2007 02:38:00 PM Send this post:

Labels: comix, taxes

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/23/2007 02:31:00 PM Send this post:

Labels: comix, IRS

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/23/2007 02:18:00 PM Send this post:

Labels: comix, IRS

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/23/2007 02:10:00 PM Send this post:

Labels: comix, taxes

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/23/2007 02:06:00 PM Send this post:

Labels: comix, IRS

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/23/2007 02:00:00 PM Send this post:

Labels: comix, taxes

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/23/2007 01:57:00 PM Send this post:

Labels: comix, politics, taxes

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/23/2007 01:52:00 PM Send this post:

Labels: comix, taxes

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/23/2007 01:41:00 PM Send this post:

Q-1:

Subject: Yet another Section 179 question

 

We bought into a husband-wife partnership on 1/1/06.  The wife was a passive partner and withdrew and we paid the husband ½ of the FMW of the assets plus an amount for goodwill.  My husband and his partner are both active partners.

 

We are wondering if you can depreciate the physical assets of the company (not the goodwill, of course) given that they elected to do the 754 stepped up basis.

 

I don’t see a prohibition against applying 179 to 754 assets, but I don’t see it spelled out anywhere either.  The accountants are willing to file an amended return if they can find some definitive proof one way or the other as to whether or not we just bought an interest in the partnership or if we bought into the assets of the company.

 

I did find revenue ruling 99-5 that talks about a single person entity selling a partnership stake where the IRS treats the new partner as buying ½ of all the assets and then immediately contributing those assets to the partnership in exchange for interest in the LLC.  Does that also apply in our case?

 

Thanks – your blog is great.

 

Regards,

A-1:

I'm in the middle of the April 17 crunch, so I don't have time to do much actual research on this.  However, I have mulled it over for a few hours and my gut feeling is that I would not feel at all comfortable in claiming any Section 179 on your new buy-in to the partnership.

If you and your husband had purchased the assets from the partnership and placed them into service under your own personal names, the situation would be quite different.  As it is, I agree that you acquired an interest in the partnership and not direct ownership of business equipment, so no 179 is appropriate.  You do need to keep track of the amount of your personal basis in the partnership, but that doesn't entitle you to any more Section 179 than the partnership as whole can claim.

Another strike against you is the fact that Section 179 is only available for the first year an asset is placed into service.  You were obviously buying into assets that had been placed into service prior to 2006 by the partnership, so your 2006 purchase doesn't qualify as first placed into service.

I'm sorry I didn't have the answer I know you were hoping for.

Good luck with your partnership. 

Kerry Kerstetter

Q-2:

Hi Kerry,

 

I didn't figure you'd answer my question - we're going to revisit it this summer when we actually have time (as will the accountants presumably) later this spring.

 

Our attorney in the process thought what had happened was that we bought 1/2 of the assets from the practice and put them into our service during 2006 - he believed that since we could depreciate the assets, we could also claim the 179 deduction.  He thought the only sticking point would be the used status of those assets though.

 

It's an interesting theory and it's odd that there isn't more definitive stuff out there (at least what we could find) as to the yes or no of the issue - you'd think there'd be a statement/ruling that said, yes you can apply 179 to 754 assets, or no you can't.  We're not interested in being the test case, and since we're not losing anything in the long run (unless they change the laws) we're fine either way.

 

Thanks for taking the time to mull it over.  Good luck in the final crunch!

 

Regards,

A-2:

Section 179 can be claimed on used assets; so that was never a concern of mine.

Maybe I misunderstood the situation as to the new ownership of the assets.  I assumed they were still going to be showing up on the partnership's books and depreciated there.  In that case, no new Sec. 179 would be appropriate.

If, on the other hand, you and your husband have personal ownership of those assets and are setting them up for depreciation in your own business, separate form the partnership, a much better case could be made for your being allowed to claim the Sec. 179.

After the tax season crunch, your tax advisors should be able to better evaluate the proper way to handle this.  I assume you have filed an extension in order to give yourselves time to straighten this out.  It would be very dangerous for you to actually file your 1040 now without the Sec. 179 and then later try to file an amended return to claim it.  An amended return would result in much closer IRS scrutiny than holding off and filing an original return later on.

Good luck.

Kerry

Labels: 179

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/23/2007 11:08:00 AM Send this post:

From a reader:

Subject: Taxing Day

Kerry,
With all the stuff you've been putting up on taxes, I'm surprised you haven't linked to this site.

That's very funny. I hadn't heard it before.

Being a one-man operation, I do often rely on tips from readers; so thanks for sending me that link.

Kerry

Labels: humor

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/22/2007 07:26:00 PM Send this post:

Labels: comix, cpa

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/22/2007 07:11:00 PM Send this post:

Labels: comix, IRS

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/22/2007 07:05:00 PM Send this post:

Labels: comix, IRS

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/21/2007 06:47:00 PM Send this post:

From Jay Leno on 4/18/07:

There was a scary moment yesterday for Newt Gingrich. At first Newt got worried when he heard the IRS this year was cracking down on cheaters. Then he realized guys who cheat on their taxes, not their wives.

Labels: humor

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/20/2007 06:55:00 PM Send this post:

(Click on image for full size)

Labels: comix, IRS

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/20/2007 06:45:00 PM Send this post:

Interesting video of Senator John Thune explaining many of the humongous tax increases we will all be hit with if the DemonRats carry through on their threat to allow Bush’s tax cuts to expire.  

Looking at the silver lining of these impending increases, for all of those tax pros who worry about losing business, each of these tax hikes is a golden opportunity to expand your client base to help people develop tax savings strategies.   

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/20/2007 01:05:00 PM Send this post:

Funny parody song by the Capitol Steps:

Download MP3

Stream Real Media

Labels: humor

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/20/2007 11:46:00 AM Send this post:

Labels: comix, cpa

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/18/2007 08:40:00 PM Send this post:

From Letterman on 4/17/07:

"If I seem a little nervous, here’s what it is: it’s tax time. Are you folks a little uncomfortable? And I don’t know, we were supposed to file Friday, supposed to file today – I don’t know when you’re supposed to file. All I know is I don’t want to go to prison. And my accountant – I don’t know if this is the guy to be doing business with, but he says to me, he says, ‘Don’t worry, ‘he says, ‘If there’s an audit and you end up in prison, I’ll treat you to the conjugal visit.’”

 

Labels: humor

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/18/2007 07:53:00 PM Send this post:

Labels: comix

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/18/2007 07:29:00 PM Send this post:

Labels: comix

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/18/2007 06:44:00 PM Send this post:

Labels: comix

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/18/2007 06:31:00 PM Send this post:

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/18/2007 06:19:00 PM Send this post:

Labels: comix

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/18/2007 06:01:00 PM Send this post:

Labels: comix

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/18/2007 05:57:00 PM Send this post:

Labels: comix

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/18/2007 05:39:00 PM Send this post:

Labels: comix

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/18/2007 05:37:00 PM Send this post:

Labels: AMT

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/18/2007 12:55:00 PM Send this post:

From Jay Leno on 4/1707:

I filed [my taxes] online this year. You ever do that? Big mistake. I got so confused I hit the wrong button and sent the IRS some porn. A lot of people asked for extensions this year. Even president bush…you know he got an extension. Because he’s still trying to decide whether or not to write off Alberto Gonzales.

Labels: humor

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/18/2007 12:53:00 PM Send this post:

From Nolo Press:

LLC Basics

Corporation Basics

Sole Proprietorship Basics

Partnership Basics

Nonprofit Basics

Labels: corp

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/18/2007 12:29:00 PM Send this post:

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/18/2007 11:58:00 AM Send this post:

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/18/2007 10:51:00 AM Send this post:

From National Review Online:

Jay Nordlinger had this observation:

“We are admonished by our accountants not to send in our tax returns through the U.S. mail. Better to send them via some other means, to be sure they get there.

Isn’t that kind of comical? I mean, here we are, paying our taxes in order to have public services. And the U.S. mail is a service we don’t dare use, to pay for our services.”

Show Taxpayers the Spending. Government should have nothing to hide from those who fund it. – Phil Kerpen

America’s convoluted income-tax system should be optional – Deroy Murdock

Taxing Myths – Brian Riedl covers some of the mis-statements (aka lies) our left wing rulers and their media compatriots use, such as tax rate cuts created the deficit. For quite a while, this kind of statement has been one of the “litmus tests” I use to judge the intelligence and credibility of a person.  Anyone spouting such tripe has classified him/her self as an idiot, not to be believed or trusted on any subject.  I have recently added those who spout the Al Gore crapola about Americans being responsible for global warming to this litmus test for intelligence. Anyone stupid enough to fall for Gore’s idiotic theories that people are more powerful than the Sun really shouldn’t be trusted with sharp objects, much less have any of their opinions taken seriously on any subject.  

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/17/2007 06:53:00 PM Send this post:

Labels: comix

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/17/2007 06:16:00 PM Send this post:

Labels: comix

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/17/2007 04:57:00 PM Send this post:

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/16/2007 09:24:00 PM Send this post:

From the Late Show email newsletter:

10. Every time you give him a receipt, he eats it

9. He keeps your records on an Etch-A-Sketch

8. Brags about the good advice he gave to Wesley Snipes

7. You visit his office and he's actually counting beans

6. His children are named "Debit" and "Credit"

5. Keeps telling your wife she has a nice pair of W-2s

4. He puts you in for a $10 million refund and says, "Hey, let's give it a shot!"

3. He keeps trying to deduct your pants

2. Ludicrous claims of having nailed both Morgan and Stanley

1. He keeps referring to the IRS as "those auditing hos"

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/16/2007 09:11:00 PM Send this post:

IRS Gives April 16 Storm Victims Additional 48 Hours to File Income Tax Returns

 

 

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/16/2007 07:53:00 PM Send this post:

Freaking News is currently running a PhotoShop contest aimed at the IRS.  Check out the entries.

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/16/2007 06:42:00 PM Send this post:

From a reader:

Subject: A Word of Thanks

Mr. Kerstetter,

I ran across your blog & website today while searching for a graphic to go along with the pro-FairTax post I am preparing for my own blog.

As I looked through your sites, I just had to say thank you for your support of free market economics & tax reform. It's great!

Chuck Layne

My Reply:

Chuck:

I appreciate those kind words and knowing that there are others out there fighting for tax reform.

Please send me a link to your post on this and I'll mention it in my blog.

Thanks for writing.

Kerry Kerstetter

Follow-Up:

Kerry,

Thank you for the offer to mention my post. The blog is at http://www.chuckschants.blogspot.com/

The comics you have are priceless!

Chuck Layne

Besides Chuck’s post on the Fair Tax, I want to echo a caller on last Friday’s Rush Limbaugh show, who chastised the substitute host, Tom Sullivan, for being so dismissive of the Fair Tax movement just because it is so seemingly impossible to conceive of success. That my be the case; but we do still have to have some hope that our long national nightmare of being slaves to the IRS can end some day.

Neal Boortz’s book on the Fair Tax.

Labels: FairTax

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/16/2007 06:33:00 PM Send this post:

(Click on image for full size)

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/16/2007 04:54:00 PM Send this post:

Labels: comix

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/16/2007 04:51:00 PM Send this post:

(Click on image for full size)

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/16/2007 04:48:00 PM Send this post:

Labels: comix

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/16/2007 03:15:00 PM Send this post:

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/16/2007 03:06:00 PM Send this post:

(Click on image for full size)

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/16/2007 10:35:00 AM Send this post:

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/16/2007 10:11:00 AM Send this post:

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/16/2007 09:45:00 AM Send this post:

I try to stick with new tax related comics to post here. If you want to check out several from last year, Daryl Cagle has posted 19 pages of them, starting here.

You can also see what I posted a year ago in my archives from last April.

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/16/2007 09:42:00 AM Send this post:

Labels: comix

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/15/2007 09:58:00 PM Send this post:

Q:

Subject: Thanks

 

Kerry,

 

Your commentary on the differences between C and S corporations was very informative.  Thanks for posting the information.

 

Regards,

A:

I'm glad you found my info useful.  However, be careful about relying too much just on info you find on the internet.  Be sure to consult with an experienced professional tax advisor before you actually implement any tax saving strategy, such as setting up any kind of corporation.

Good luck.

Kerry Kerstetter

 

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/15/2007 09:50:00 PM Send this post:

Q:

Subject: Quickbooks Question

Hello,

I have Quickbooks 2005 Basic and I need to backup just my calendar year for 06 is there a way to do that.
Please help. thanks

A:

There is no way to backup just part of the data in a QBW file.  It's all or nothing.

I'm not sure why you would even want to backup part of the file and possibly lose the rest.

If your data file is becoming too large for your computer to handle, there is an archiving function that allows you to remove the details from before a certain date that you specify.  You may want to do that for before 1/1/06 and then your file will only contain the details for 2006.  Check the QuickBooks Help function for more details on how to do this.

Good luck.  I hope this helps. 

Kerry Kerstetter

Labels: QB

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/15/2007 09:47:00 PM Send this post:

Labels: comix

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/15/2007 09:36:00 PM Send this post:

Labels: comix

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/15/2007 09:35:00 PM Send this post:

Labels: comix

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/15/2007 09:30:00 PM Send this post:

Labels: comix

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/15/2007 09:27:00 PM Send this post:

Labels: comix

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/15/2007 09:25:00 PM Send this post:

Labels: comix

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/15/2007 09:21:00 PM Send this post:

Labels: comix

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 4/15/2007 08:50:00 PM Send this post:

Labels: comix