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Jon Andrews
Jon Andrews, Certified Public Accountant (CPA)
Category: Tax
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Experience:  I deal with all levels of tax planning and controversy - from the ordinary to the complex.
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partnership and form 4835

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Hi We (4 brothers) started a partnership in 1976 as a instrument to own farmland that we recieved from our parents and during these years (maybe 1985) we bought out one partner and about 1995 we bought out another partner. At the end of 2003 my wife bought out my partner, so now the partnership consists of myself and my wife (partners in a partnership). When the partnership was new, I had a cpa do the taxes one year and I have followed that routine ever since. We file a 1065 and the k-1's and a form 4835. I suppose that I should point out to you that the farmland was rented to me (the farmer) and my brothers were not farmers. The form 4835 fits my brothers situation but how about me????????????? Now that My wife and I are partners and own the farmland in the partnership and rent it back to us. Is the 4835 ok????????????? This is set up that way at the FSA (farm service agency) for farm program program payments etc.
Also we have attorney fees involved in the redoing of the partnership and are they deducted like any other ordinary expense? (taxes etc)
Thanks
J

The partnership is an entity separate and apart from the individual partners. This is normally the case even when the partnership consists solely of two spouses.


Because of that, you should be able to continue with business as usual for the most part. You should not, for example, double the rent in an attempt to change the income from "farm income" to "rental income".


The attorney fees are probably going to need to be capitalized. It will depend on exactly what you mean by "redoing of the partnership".


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Customer: replied 11 years ago.
Reply to Jon Andrews's Post: Hi again----The attorney fees are $717.00 were incured and paid for in the 1st half of 2004 and include a consultation of what we wanted to do, which involved splitting the farmland. After determining the split of the farmland. We transfered title of an agreed portion of the farmland, from the partnership to my ex-partner and then transfered my ex-partners part of his ownership of the partnership to my wife (my new partner).
If I have to capitlize this expense I would need some detail - how to do it.
I may need a hint as how much this should cost.
Thanks
J

I have replied privately to this question. Please check your "private messenger inbox."


[email protected]  
Jon Andrews, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 3118
Experience: I deal with all levels of tax planning and controversy - from the ordinary to the complex.
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