Discussion:Sec 179 when 1120 never filed
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Bottom Line (talk|edits) said: | 19 September 2006 |
| New client wants me to file 2005 taxes. I always get a copy of prior year return. They incorporated mid-year 2004. Prior tax preparer said since they weren't incorporated for the entire year, they couldn't file corporate return and everything had to show on Sch C of 1040. No Section 179 was taken and resulting tax was $3,500 (all SE). I'm going to file an 1120 for the 2004 partial year and amend the 1040 which will lower the SE tax. Since the 2004 1120 was never filed, is there any reason why I can't Section 179 equipment which was purchased with corporate money after the corp was started? It was depreciated on the 1040 but it should have shown on an 1120 instead of the 1040. | |
Michaelstar (talk|edits) said: | 19 September 2006 |
| Bottom Line- You may elect sec 179 on a past due tax return. See the "specific instruction" - Part I of Form 4562 (page 2, third column - about the middle of the 2005 instructions). Also - FYI - If this is a first year return and you do not have a "required y/e" then there is no real reason to elect a 12/31.
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| September 19, 2006 | |
| Talk about Doubtful Accountants! Oh, my. Where do these folks come from? And to think I worry about having to pass a test...
In any event BL,file the return as it should have been, do select 12/31 in spite of my dear brother Michael's suggestion, because you want to elect S status asap, and it'll save you a lot of aggravation. | |
| 19 September 2006 | |
| Hi no offense guys but we are going to file an amended 1040 return and a C corp 1120 to save $500 bucks of S/E tax. And then we are going to make a late S corp election and have to worry about any BIG tax issues. I agree you should report things as to who collected and paid the expenses ie the corp or taxpayer. We dont have all the facts from Bottom Line. Did the corp really operate as a corp, bank accounts billings etc? Real world here maybe we ignore corp because it "never" came into play until 9/19/06, maybe we start newco today and make timely S election etc. Get all your details out there BL and maybe you will get a more practical answer. Its not your fault BL and you may be better off fixing it going forward. bye | |
Michaelstar (talk|edits) said: | 19 September 2006 |
| Certainly if you are going to elect S-Corp status - the required year end would be 12/31. | |
Bottom Line (talk|edits) said: | 19 September 2006 |
| Acted like a corp, bank account, billing etc. They'll save some SE tax for 2004. 2005 will also be filed as a C since there won't be any profit after Sec 179. Right now it looks like 2006 won't show a profit either. I'm going to file for S-corp effective 2007 therefore am going to use 12/31 FYE. No point filing for late S election if we don't have to. | |
| 20 September 2006 | |
| Hi all right probably should fix if they took anything out from C corp as pay I would treat as 1099 income due to no payroll being done and show that subject to S/E as other income on 1040. Also chances are you havent built up much goodwill for a potential BIG tax. Try not to have a loss in 2006 because with the S election it will never get used until you dissolve. bye | |
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