Dear Friend, Hello and welcome ...
However, let me try and simplify things for you and make it as crisp and short as possible to avoid confusion.
Let be begin from the end. Since the vehicle was not at all depreciated properly in the first year of operations, you will have to amend that years account. Since you are yet to file your taxes for 2011 and 2012, better amend the prior returns before you move on to avoid any future complications.
Also note that the the LLC members have life beyond and outside the realm of LLC too. So, it is LLC that can be insolvent and not necessarily the partners / members,. You can read more at :http://info.legalzoom.com/difference-between-insolvent-bankrupt-23667.htmlhttp://smallbusiness.chron.com/disband-llc-partner-insolvent-24244.html(Both are for general reference only)
Having said this,
Regarding the $6900 debt forgiveness, the figure would remain same. This is because, even if you include and record lease which was not recorded earlier, it would affect the final taxable income, and NOT this amount that was forgiven. HOWEVER, the final tax bill would change. But this amount of $6900 would continue to remain the same amount of debt forgiven.
I am of the strong opinion that you better hire a local CPA or EA to do this job for you. You have already messed up a lot and there are great chances that you might get confused and lost with this. The botXXXXX XXXXXne is that you will have to amend your tax return and then file the ones that are not filed and move on.
Rate this answer ONLY IF you are done with this and if this helps and satisfies you as this is the only way we get compensated for assisting you. You may use "CONTINUE CONVERSATION" to revert with additional queries if you have or if I have missed out on any aspect of your question.Hope this helps...Warm Regards
I just want to reiterate what you are saying. The 2010 taxes need to be amended so the vehicle can be capitalized and depreciated as well as the $6900 recorded as income? The LLC is only 1 member. In 2010, the liabilities exceeded the assets by $5500. Can he not file a 982 reducing the tax liability for the company up to the $5500?
Also, I am not the one who messed this up. I am only trying to help fix it.
I thought that point 4 was for the business of farming and point 3 was other business not in 11?