How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask R. Klein, EA Your Own Question

R. Klein, EA
R. Klein, EA, Enrolled Agent
Category: Tax
Satisfied Customers: 2882
Experience:  Over 20 Years experience
63817126
Type Your Tax Question Here...
R. Klein, EA is online now
A new question is answered every 9 seconds

IN a sub S, what line on the K-1 would the gain on th sale

Resolved Question:

IN a sub S, what line on the K-1 would the gain on th sale of territory rights be passed thru to the shareholder, and if the taxpayer is in the 15% bracket, what percentage of tax would the gain on the territory rights be taxed in 2011....what if he was in the 28% bracket?
Submitted: 2 years ago.
Category: Tax
Expert:  geedubya55 replied 2 years ago.

Thank you for using Just Answer.

 

The sale of territory rights would be considered a capital asset used in a trade or business, so it would be considered a Section 1231 gain reported on line 9 of form K-1 of the S-Corp tax return. Section 1231 gains are treated the same as capital gains which receive a more favorable tax rate than ordinary income. If you are in the 28% bracket for ordinary income, your capital gains (including section 1231 gains) are taxed at 15%.

Customer: replied 2 years ago.

Hi geedubya55,

I will add a bonus of $ 15 if you could please answer another question . I filed a Form 1139 carrying back a 09/30/11 fye C corp NOL of $ 41K to 09/30/08 ( approx $ 28000 and 09/30/09 $ 13,000) I thought I had to elect Sect 172 (b) (1) (H) under Rev Proc 2009-52. I got a letter saying it was rejected due to the fact that If electing an extended carryback under WHBAA it only applies to tax periods ending on or before Nov 30, 2010.

 

Shall I resubmit the Form 1139 with out any election, or is there an election I am not aware of. I don't do these forms very often.

 

There is income and tax to recoup in 09/30/08, 09/30/09, none in 09/30/10.

Please let me know if $ 15 is enough, I can send you $ 25 if you think that is more fair.

 

Thank you.

 

Expert:  geedubya55 replied 2 years ago.

Normally an NOL can be carried back only 2 years, and then forward for up to 20 years. If your loss occurred in 2008 or 2009 (including fiscal years up to Nov 30, 2010) you could elect under section 172 to carry that loss back either 3, 4, or 5 years.

 

Since your loss year occurred in a tax year after the election was available, you are only permitted to carry the loss back 2 years, and then if the loss is not completely absorbed in those two carryback years, it will carry forward from there.

 

So you will need to file a from 1139 to carry the loss back to 09/30/09 and 09/30/10. You mentioned that there is no income in 2010 to recoup tax, so if the entire loss is not absorbed in the 09/30/09 year, the remainder will carry to the 09/30/12 tax year. Be sure to include both years (09/30/09 and 09/30/10) on the form 1139 to show that you are not using any of the loss in 09/30/10 year so that any remaining loss will carry forward. When applying an NOL carryback or carryforward, you must apply the loss to the earliest year first, and then each succeeding year in order.

 

Hope this helps.

geedubya55, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 358
Experience: 17 years experience in business and individual taxation specializing in small business and farming
geedubya55 and 8 other Tax Specialists are ready to help you
Customer: replied 1 year ago.

I am asking a follow-up question to the first issue above. If the taxpayer has $ 33K in Wages, the $ 45K in Territory rights on Sched D Line 11 and an $ 8K loss in rental real estate, all deductible on Sched E for a total Income of $ 69K and a standard and exemption of $ 23300 and taxable income of $ 45, is it possible to only pay 363 in federal tax....I don't worry about a little tax but NO tax scares me to think my software is incorrect.....any thoughts?

Customer: replied 1 year ago.

I am asking a follow-up question to the first issue above. If the taxpayer has $ 33K in Wages, the $ 45K in Territory rights on Sched D Line 11 and an $ 8K loss in rental real estate, all deductible on Sched E for a total Income of $ 69K and a standard and exemption of $ 23300 and taxable income of $ 45, is it possible to only pay 363 in federal tax....I don't worry about a little tax but NO tax scares me to think my software is incorrect.....any thoughts?








Customer: replied 1 year ago.
Relist: Other.
advisor not available
Expert:  R. Klein, EA replied 1 year ago.
Thank you for contacting me about your Tax issue. I will work hard to help you understand the issue clearly.

Yes, your scenario is possible.

Why?

Because the Long Term gain on the territory rights is taxed at either 0% or 15% depending on your total income. In this case, since you are not in the 25% bracket, it's taxed at 0. So this is 45K with ZERO tax.

Your other income is subject to tax, but due to exemptions and itemized deductions, there is almost nothing left to tax. Hence your tax is under $1000 total. You may have some credits or other items also reducing tax.
R. Klein, EA, Enrolled Agent
Category: Tax
Satisfied Customers: 2882
Experience: Over 20 Years experience
R. Klein, EA and 8 other Tax Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.