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Discussion Forum Index --> Tax Questions --> Basis in business
Nancyshoemake (talk|edits) said:
| 31 January 2008
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| I have a client that invested $43000 in public pay phones back in the late 1990's. It was a business that was one of those "too good to be true" deals. Anyway we are trying to recoop the loss and the IRS is telling me because the taxpayer paid for the phones with inheritance monies that we have no "tax basis" in the phones and therefore can not deduct the phones. Now, why would that matter? They were given monies and they used those monies to purchase phones. They have a basis in the phones. I don't understand this "tax basis" idea. Can someone help?
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Kevinh5 (talk|edits) said:
| 31 January 2008
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| they have a basis, the question is how do they deduct it - did they buy actual equipment, a franchise, a security (google pay phone business if you think this is a stupid answer) or what?
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Death&Taxes (talk|edits) said:
| 31 January 2008
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| Kevin makes a better point than I did on the other thread: you have to get out the contract. I ran into something like what Kevin is talking about in the Candy Machine business.....part of what my person bought [a doctor who thought this would be perfect for his wife] was routes.
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Nancyshoemake (talk|edits) said:
| 31 January 2008
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| they purchased actual equipment...sorry I must have saved this twice.
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Nancyshoemake (talk|edits) said:
| 31 January 2008
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| I think what my concern is here isn't about what he purchased (it was the actual phones)...but how the irs is saying he has no "tax basis" in this because of inheritance monies...
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WesR (talk|edits) said:
| 31 January 2008
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| Hi move up the monkey chain to the superviser you are right. The source of the funds is not relevant to the basis issue. bye
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