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PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4308
Experience:  35 years tax experience, including four years at a Big 4 firm.
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Will someone please respond to my tax question below related

Customer Question

Will someone please respond to my tax question below related to Order ID: 15724922-827; and dated today- 04 November 2015 03:05? Hello again! Thank you for the answers regarding carryover NOL. My question relates to where, (what line), I place the loss
on Schedule C? (during the time I underwent pancreatic cancer surgery and subsequent surgery, the company never paid me documented commissions in the amount of $137.313.00). I have both a civil suit against the company and owner, and there are criminal proceedings
pending against the company owner. I was paid a base of $42,404; leaving a net Schedule C 1099 loss of $95k. Where on schedule C do I place and describe this loss of commission income? There dos not appear to be a "line" to pace this loss. Do I need to attach
a separate form for this? Please advise ASAP. Also, you mentioned it's possible to carry a loss backwards for up to 2 years.....how would that work on the amended 1040 forms? Thank you! Tom Burke(###) ###-####**@******.***
Submitted: 1 year ago.
Category: Tax
Expert:  PDtax replied 1 year ago.

Hi from just answer. I'm PDtax, and saw your question reposting. I can assist, but do not want to infringe upon the work of another expert.

I am responding since you seem pretty stressed. Please give the previous expert time to assist, or opt her out and I will assist.

PDtax

Customer: replied 1 year ago.
How much time should I give the other tax CPA I paid and wasted all day yesterday and received no response?!!Do I use a Schedule D to report the 2009, 1099 commission loss, and if so, what line do I report the loss on? Is this a ST or LT capital loss?If I do not use Schedule D, on what form and line do I enter the original 2009 commission loss, so I can continue amending 1040x's from 2009 to 2014?I am a pancreatic cancer patient and time is not on my side. I needed these simple answers yesterday, but the original CPA was nowhere to be found. Please help!Thanks,
Tom Burke(###) ###-####
Expert:  PDtax replied 1 year ago.

If you opt the other expert out, I will help you right now.

Customer: replied 1 year ago.
I'll opt out. I've already provided a CC for the $38 fee. Please provide all answers now including my earlier question regarding taking a carryover loss BACK 2 years. How does that work under my scenario and what forms and on what lines on each form to I need to complete?
Expert:  PDtax replied 1 year ago.

I don't believe you have the original expert all the information needed originally. You want to amend prior year returns to deduct losses for fees you never received. You may not like my answer, but confirm the facts before responding.

If you were reporting income on a schedule C, most report on the cash basis. Which means that money you did not earn was not reported. An example:

Expert:  PDtax replied 1 year ago.

Fees collected: $50,000. Fees earned but not collected $23,000. Expenses $45,000.

Expert:  PDtax replied 1 year ago.

Taxable income on schedule C, cash basis is $5,000.

Expert:  PDtax replied 1 year ago.

The unearned fees have no tax basis yet. If you never collect them, you do not have a tax loss.

Expert:  PDtax replied 1 year ago.

The original responses you received did not have that key information.

Expert:  PDtax replied 1 year ago.

Please confirm I understand your fact pattern completely.

Customer: replied 1 year ago.
WHAT??? In 2009, I worked as a 1099 IC digital solutions expert. My contract provided for both a small salary and commissions. My salary was around $43k. My earned, booked and billed sales exceeded 1.5 MM realized and banked by my company owner, now under civil suit and criminal indictment.Are you telling me, while I sat in a hospital having life threatening pancreatic surgery, the $137,000 in commissions owed me, with actual banked sales of $1.6MM banked and fraudulently used by the company CEO to start a "secret company" and invest in personal bar/restaurant investmentsbis NOT A LOSS I REALIZED FOR 2009? Are you.kidding me???!!! He committed theft of.my commissions by deception; bank fraud and money laundering!!!There has GOT TO BE A WAY FOR ME TO WRITE OFF THIS LOSS!Please explain this in detail!!!!
Expert:  PDtax replied 1 year ago.

You have a claim for unpaid commissions. You never paid tax on there income, so there is no tax loss for not receiving them.

Your remedy is in litigation. If you prevail, and receive any payment, chances are income tax will be due.

I don't doubt that you are owed money. I don't doubt that this troubles you. But you do not get to deduct a loss for income you never paid tax on.

Because this is unpaid wages, you might have had other remedies, such as state labor and wage board, or even forcing the business into bankruptcy. Those steps could have forced the legal system to intercede, and perhaps fierce payment to you of some of your unpaid commissions. The issue with any of those claims is the amount of time that has passed.

Expert:  PDtax replied 1 year ago.

I am sorry that my answer does not support tax return relief. But you seemed to urgently want a response.

Thanks for asking at just answer. Even though my answer was not a positive one, I would appreciate positive feedback to close out your question. I'm PDtax.

Customer: replied 1 year ago.
A consultant's time is money, and if he provides services to a client, and that client doesn't pay him, he has sustained a small business loss. If I own a small business and.provide services to a client, and my client gets paid 100% of the 3rd party services I provided; but the owner of the business pockets $1.6 mm in My billings, along with my $134k in cpmissions bankedvand due me, ive suffered a major business loss; just like those client's above who don't pay me for productd, I have a loss.What r u saying I should list in my schedule C? Don't I get some relief?Why can't I claim some type of short term capital loss on schedule D?I'm not asking for a refund based on my losses, I just want to carryover that loss to 2010 to 2014.Please advise and thanks!
Tom
Expert:  PDtax replied 1 year ago.

Will you be accepting my offer of a phone call to discuss? Please advise.

Customer: replied 1 year ago.
Please respond to my final issues above. Are you POSITIVE there is no "inventive" way to include these somehow under casualty loss, (had I not undergone life-threatening surgery on 10/16/09, and was confined to bed rest with large protruding drains from my abdomen for 4 months after a 13 day hospital stay due to massive pancreatic infection), I would have been present to rightfully demand and receive those commissions!
Expert:  PDtax replied 1 year ago.

I am positive that I know of no creative tax deduction to help.

Your remedies were legal, as I discussed. And time may not be available to pursue legal claims. But there is no tax deduction for a loss when you did not pay tax on the income.

Thanks again from just answer. Please rate my assistance when we have completed our work. I'm PDtax.

Customer: replied 1 year ago.
1 last question. Would things change if I wasn't reporting on a cash basis?
Expert:  PDtax replied 1 year ago.

Yes.

Expert:  PDtax replied 1 year ago.

The difference if you would have reported the income when earned, not when the cash was received. Later, when the income was not collected, you could write off the uncollected income.

I answered this morning because your question seemed urgent. We spent all morning debating my opinion of your issue. I hope that the time was well spent.

I am taking a lunch, and have afternoon appointments. If you need anything more, please get back to me shortly. If we are done, I would appreciate positive feedback.

Expert:  PDtax replied 1 year ago.

Hi again. PDtax here.

I had a chance to look back in, and see that you have not responded.

Thanks you for the opportunity to be of service.

Positive feedback will be appreciated.