User talk:JAD

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Contents

After tax season drink!

2 cups fresh strawberries with tops cut off and rinsed. Enough good white tequilia to cover. Put in good jar(s) that seal well. I use washed out spaghetti sauce jars & caps because they seal well... wash them really well, rinse and let them set for a day.

Just put the strawberries in the jar, cover with tequilia to tops of berries, and refrigerate for 3 weeks. Use a funnel to put the liquor in the jars. When I make a drink I put like 2oz of tequilia, ice, plain water to fill smaller glass (one cup or so), and half packet or less of Sweet n Low. It's good ! Ciao! CrowJD 19:26, 14 April 2007 (CDT)



Pro for 1 year, Passive Loss

RE Pro for 1 year, Passive Loss Hey Mark,

Now it applies to me....what did you wind up doing? Thanks, Jessica

Hi Jessica,

My extreme apologies for just now answering your message. I have not been on Tax Almanac in quite a while. I'm finishing my last GGU class, so all of my dicretionary time has been spent on class. Two more weeks and I'll graduate!!!

On the above issue, despite considerable research time, I never found anything on point. I told my client that I could not comfortably recommend that she make the election and take the passive loss because of the uncertainty of how that would effect her in the future. She was understanding and agreed that a conservative approach was best. Nice client.

Again, sorry for the late reply. In two more weeks I will probaly be back to cruising the Almanac on a more regular basis. I miss the cast of characters, as much as I miss the good info!

Regards,

Mark

Gross Receipts in Sales Factor

Hi Jessica,

I'm assuming this was the sale of a business, or a significant part of a business. In some states the gain would be treated as nonbusiness income and allocated to the locations of the various assets; the goodwill would be allocated to the commercial domicile of the taxpayer (or residence of the individual owner). And the proceeds would not be in the apportionment formula at all.

However, in California you would have to go to court to argue that the gain is not business (apportionable) income. And then you would probably lose.

The California Supreme Court has recently held that when UDITPA says gross receipts in the sales factor, it means gross receipts. (Microsoft, General Motors) So the entire $13 million of proceeds from the sale of goodwill would go in the denominator of the sales factor. How to allocate it in the numerator is not all that clear, but if you make an effort (perhaps in the ratio of the fair market values of the other assets sold in California to those everywhere) it should be OK. Of course, this is not going to be a pretty picture if the business sold was all, or primarily, in California. There is an "out" clause; gross receipts can be omitted from the numerator and denominator of the sales factor if their inclusion is distortive. If you can come under this regulation, you can (or must) exclude the receipts from the sale of goodwill (and the other assets too) from the sales factor denominator (and the numerator, of course):

Reg. 25137(c)(1)(A)

(A)  Where substantial amounts of gross receipts arise from an occasional sale of a fixed asset or
other property held or used in the regular course of the taxpayer's trade or business, such gross 

receipts shall be excluded from the sales factor. For example, gross receipts from the sale of a factory, patent, or affiliate's stock will be excluded if substantial. For purposes of this subsection, sales of assets to the same purchaser in a single year will be aggregated to determine if the combined gross receipts are substantial.

1. For purposes of this subsection, a sale is substantial if its exclusion results in a five percent or
greater decrease in the sales factor denominator of the taxpayer or, if the taxpayer is part of a 

combined reporting group, a five percent or greater decrease in the sales factor denominator of the group as a whole.

2. For purposes of this subsection, a sale is occasional if the transaction is outside of the 

taxpayer's normal course of business and occurs infrequently.

I'm sorry about the formatting; I copied and pasted from the reg and I can't seem to get it to work right. Anyway, I hope this helps!

Merry Christmas! KatieJ 17:57, 24 December 2007 (CST)


Audit support

The IRM is available online on the IRS website. Here is the section on Examinations. The IRS CAN make it difficult to move the audit to another time, but you can still argue strongly (almost insisting) that it either be held in your office (saving your client your travel time) or that it be scheduled after 4/15. Expect a big fight, but act like you expect to get your way. Kevinh5

your sabbatical

Jessica,

I understand your point perfectly about there being tension on this site. Its an invaluable resource for professional support but there is definitely an undercurrent of tension that in my opinion is an unavoidable built-in artifact of the culture of the site.

Oh well, we each have to decide whether the benefits outweigh the discomfort.

BTW, I'm another California sole prop. Bay Area here, Silicon Valley.

Steve

Newtaxguy 06:00, 24 February 2014 (UTC)

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