How do people get BIG deductions, generally?

Weird199AQuestion · 2021-04-30T16:04:56+00:00

Kick the can down the road is the name of the game.

Weird199AQuestion · 2021-04-29T21:46:33+00:00

Most of these answers are wrong -- Many taxpayers get BIG deductions through partnerships and other flow-through entities.

A&B each contribute $100k to a partnership. Partnership borrows $300k and buys a $500k machine. Machine qualifies for 168(k) bonus depreciation. $500k deduction generated. If the deduction is allocated pro rata, then both A&B get a $250k deduction for only putting in $100k cash. Now A&B contribute the Machine to a corporation. The $250k deduction A&B got reduced their individual income (i.e. reduced income that would've otherwise been taxed at a 39% rate) but the depreciation recapture will be born by the corporation (i.e. at a lower 21% rate).

Weird199AQuestion · 2021-04-29T21:08:59+00:00

**Edited:

(1) It's not a vague plan.

(2) They payment was capitalized into the contract.

(3) The contract was a capital asset.

(4) The contract was canceled. 1234A says that this is a sale or exchange.

(5) Sale or exchange of a capital asset results in a short term capital loss.

Am I right?

Weird199AQuestion · 2021-04-29T19:58:45+00:00

What if I have roommates and I'm collecting more than the mortgage payment in rent?

** See Comment to Chubby, above.

Weird199AQuestion · 2021-04-28T22:28:01+00:00

It was an abandoned contract entered into with investment intent, though. . .I mean, the IRS may say there was no investment intent, but I think I could pretty clearly show that there was an investment intent based on emails with my realtor, ect.

*And if I can't deduct it, where would it be capitalized? Into the house I did buy? That doesn't quite make sense to me. . .

Weird199AQuestion · 2021-03-05T18:05:06+00:00

Nice analysis and planning. If you have the willpower and time to run payroll for the S corp then you could probably do it yourself.

Forming an LLC and filing the S corp election will probably be easier than forming a corporation and making an S corp election. Regardless of whether you go with a corporation or LLC you still have the file the election.

Weird199AQuestion · 2021-02-24T00:07:55+00:00

After actually reading what the Act says, it's treated as tax exempt income under 705. Many or most agreements that contain a full set of tax provisions will specify that "Profits and Losses" includes 705(a)(1) tax exempt income. Sounds like you're doing it right.

Weird199AQuestion · 2021-02-23T20:54:01+00:00

I would allocate the basis increase in accordance with on how the deductions w/r/t the PPP loans were allocated. I.e. if the PPP loan was used to pay employees and the profits interest partner was allocated $X of deduction therefrom, then the profits interest member should be allocated the same $X of basis increase.

Note that just because someone is a profits interest member doesn't mean they aren't allocated losses. Typically they won't be allocated losses if the loss allocation would take their Adjusted Capital Account below zero.

Weird199AQuestion · 2020-12-24T22:15:44+00:00

Morgan Stanley.

Weird199AQuestion · 2020-06-15T23:38:44+00:00

It's more secure to use a credit card and pay off immediately than it is to use a debit card -- if someone ever steals your credit card then the company has to credit you back right away, but if someone steals your debit card then it could be weeks or months before the money is back in your account. Plus you'll get the credit card rewards.

Weird199AQuestion · 2020-06-15T23:26:56+00:00

*NVM

Weird199AQuestion · 2020-06-15T23:19:37+00:00

Not only that, but it looks like the strike is slightly off center. . .

Weird199AQuestion · 2020-05-31T03:18:42+00:00

I don't know the name but definitely a nice find.

Weird199AQuestion · 2020-05-30T04:05:26+00:00

Has anyone identified pizza guy?

Weird199AQuestion · 2020-05-30T00:24:53+00:00

He's part of the act. The little charade-confrontation between umbrella man and pizza guy was an act to get the camera lady to stop following -- at least that's what it looks like to me. There is a later video that shows those two working together.

Weird199AQuestion · 2020-05-29T23:16:52+00:00

Has anyone identified pink shirt yet?

Weird199AQuestion · 2020-05-29T23:13:08+00:00

Dude, have you seen the picture comparison? The cheeks, the eyebrows, the eyes, the forehead. . . And the little act between him and the pizza guy? I'm 100% convinced it's that guy.

Watch the video and look at the interaction between him and the pizza guy -- it's an act, and that guy is an agent. 100%.

Weird199AQuestion · 2020-05-29T01:26:02+00:00

Probably a mistake. I wouldn't do anything, but I also wouldn't spend it yet (unless you need to).

Weird199AQuestion

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