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 Stephen G. Your Own Question
Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 7067
Experience:  Extensive Experience with Tax, Financial & Estate Issues
30050794
Type Your Tax Question Here...
Stephen G. is online now
A new question is answered every 9 seconds

Will someone please provide an additional response to my

Customer Question

Will someone please provide an additional response to my question below: Original order ID: 15724922-827 - dated: 18 October 2015 12:56 I have waited over a day for the original tax advisor to respond. You states you would text him yesterday. I need these
answers THIS MORNING! This is an unreasonable time to wait for any response! History When filing a 2009 amended 1040; particularly Schedule C; and you sustained a loss of $138,000; how can I carry this loss over to 2010, 2011, 2012, 2013 and possibly 2014?
18 October 2015 12:56 USTaxAdvising USTaxAdvising Tax Professional Hello, Yes you can carry the loss forward 20 years and perhaps even carry back the loss 2 years. The loss will first reduce any other taxable income except capital gains/losses. If you have
taxable income in excess of $138K then the loss will be absorbed in 2014. Any excess losses not absorbed by other taxable income will generate a Net Operating Loss which will then be carried forward. Here is a very good article on the subject which should
help explain things in greater detail - https://www.cpa2biz.com/Content/media/PRODUCER_CONTENT/Newsletters/Articles_2014/Tax/Net-Operating-Losses.jsp Here is Publication 536 which also discusses NOLs for individuals - https://www.irs.gov/publications/p536/
I hope this provides the clarity you were looking for. Please respond to this thread if something is not clear and I will get back to you as soon as I can. So if I understand you correctly, when I do my amended 2009 1040; Schedule C; I can offset the documented
loss of [$137,000] by my income (1099) of $42,000; so I list a loss of [$95,000] on line 31 of Schedule C, net profit or {loss}. I then also list this [loss] on my amended 2009 1040. The question is what forms/schedules do I need when filing my amended 0 1040,
to carryover the loss on my 2010 amended return; and if there is still a loss, carryover to 2011, 2012, 2013 and possibly 2014? 18 October 2015 01:11 Is there a Net Operating Loss schedule that has to be completed and attached to each 1040? What is schedule
or form number I need to use and attach to my amended returns for 2010, 2012, etc...... 18 October 2015 01:15 USTaxAdvising USTaxAdvising Tax Professional Correct, if the 1099 income is related to the Schedule C business it would be reported on Schedule C
and reduce the loss to 95K. You would carry forward the loss and report it on line 21 of Form 1040. You would file Form 1040X and notate the lines that change. If there is still a loss to carryforward to 2014 then the remaining loss would be reported on line
21. In each year you would disclose on line 21 "NOL from 2009, (2010), (2011)" respectively and also attach schedule showing the original loss in 2009 and how the balance is being reduced each year and how the balance carries forward. This schedule should
also be attached to your return. Is there a Net Operating Loss schedule that has to be completed and attached to each 1040? - No, it is a schedule that you would prepare and attach. Want to switch to a live phone call? If you prefer, we can talk live on the
phone to make it easier to get all the help you need and ask follow-up questions. Please, I need an answer to this question THIS MORNING, or please refer me to another Tax specialist!! Key Question I NEED ANSWERED this morning by 10 AM CST - November 5th -
6:04 AM CST 05 November. 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 my 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? 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(###) ###-####***@******.*** 04 November 2015 03:07
Submitted: 1 year ago.
Category: Tax
Customer: replied 1 year ago.
Do I use Schedule David to report the 1099 2009 commission loss? Is this a LT or ST capital loss? What line do I make this entry?
Customer: replied 1 year ago.
Damn spell check. I meant Schedule D.
Expert:  Stephen G. replied 1 year ago.

OK, since you have not received any further response to your questions, let me give it a try.

I think I know why you haven't received any additional response to your question as when you added additional information to your question, it becomes apparent that there is a problem.

Most likely, you aren't going to like the answer & that's why a different expert hasn't picked up the question, when you started with someone else.

First of all, from what you said, your "loss" which is clearly a real loss to you causing significant economic hardship, (that's not disputed by anyone), never-the-less, that loss is NOT deductible for income tax purposes.

The fact that you were OWED $95,000. in unpaid commissions is not deductible as you don't have any tax basis in the unpaid commission income. It is completely different than if you had actually paid out $95,000. in business expenses but were unable to recover them either through reimbursement or through revenue that those business expenses were made in anticipation of revenue that they would assist in generating.

Also, it is not clear to me as to whether or not you filed an original return for 2009? If you did, that tax year is now closed and isn't subject to being Amended. If you filed a return for 2009 and reported your gross income of $42,000. +- (representing your base pay), then that year is correct as it stands. You would only want to Amend that year if you had reported the commission income that you hadn't received. Since that doesn't appear to be the case, there would be no Amendment available for 2009 even if that year wasn't closed.

So basically, all these discussions regarding NOLs (Net Operating Losses) being carried back & forward are moot as there is no deductible tax loss involved. You are OWED these commissions and if your lawsuit is successful, and you are able to collect the commissions OWED to you, then they will be subject to income tax in the tax year that you receive them.

I would have responded sooner to you, but I just received the question indicating that you needed an immediate response and would be willing to work with a different expert. I will be happy to respond to any follow-up questions that you may have or to respond to a phone call request if you would like to speak with me directly.

The request has to come from you & you should ask for me specifically (Steve G.) if you want to speak with me personally.

Please don't shoot the messenger; I know this is not the response that you expected, but never-the-less, it is the correct response to your question based upon the additional information you provided.

.

Customer: replied 1 year ago.
Hello Stephen G.
Who is the initial CPA that advised me the initial information that 2009 1040x (amendment) was not a "closed out" tax year; and I was able to amend 2009, 2010 & 2011, and rollover a NOL for each year? If it's a closed out tax year, why are people just now getting around to filing original returns for 2009 through 2014? Is 2010 and 2011 closed out?How many years are you entitled to go back and amend? Please state the specific years from now.How many years then can the IRS go back and audit you? Please be specific up to the current 2014 tax year.Thanks,
Tom
Customer: replied 1 year ago.
Stephen,
There is a deduction line on Schedule C (2009) that's entitled "shared commissions" under Expenses. Why can't I make the argument, that while I was in the hospital for PC surgery 13 days and intensive 7 month sedentary infection treatment for sepsis, that I allowed my alleged partner/CEO to use my portion of my commissions earned to reinvest in the business until I was back on my feet and back to work under a legal Illinois oral contact?Thanks,
Tom
Expert:  Stephen G. replied 1 year ago.

I don't know who the initial CPA was that you dealt with; we are privy to that information. I'll attempt to respond to your additional questions, but realize that these questions aren't relevant to your original question as there is no tax loss to deal with in the first place.

If you had not yet filed an original income tax return for ANY tax year, that tax year is never closed. Generally, a tax year closes 3 years from the due date of the return or two years from when the tax is paid, whichever is later. If a tax return is filed late, the IRS has three years from the date the return was filed to examine the return.

When you dealing with NOL Carrybacks & Carryforwards, the timing for closed years (as they relate to the carryovers & carrybacks) become quite complex. What it boils down to is that if although the NOLs can be adjusted in closed years, they are basically treated as used in those years even if the years are closed for refunds and only the net remaining NOL can be carried to another tax year. If you are really interested in following the reasoning related to how this works in actual practice, I suggest that you review the following link which provides a detailed explanation of the rules and gives examples as to how they are applied. However, realize that you do not have an NOL in the first place, so these rules will not have anything to do with your actual circumstances.

http://www.nylslawreview.com/wp-content/uploads/sites/16/2015/03/Volume-59-2.Gadwood.pdf

"Shared Commissions" refers to Commissions reported above as revenue, but were paid to another party. You have to understand the concept at work here. Until you report a commission as "revenue" actually paid to you & received by you, and then subsequently pay a share of that commission to another party, there's nothing that you can deduct on that line on your Schedule C. Remember that you are on the "Cash Basis" for income tax purposes, so that you don't report commissions as income until you actually receive them and you don't report business expenses until you actually pay them.

It's the same exact treatment that all businesses using the cash basis for tax reporting experience. For example, when I was practicing as a CPA and I provided services to a client, preparing various income tax filings and billed that client $500., I wouldn't have included that income on my tax return until I was paid. If payment wasn't forthcoming, I experienced a real economic loss, but I would be unable to gain any tax benefit from that loss as I never was required to report the $500. as income in the first place. That is the exact same situation that you are facing.

Why weren't you paid the commissions that you were due? What if anything was the dispute related to? Did it have anything to due with the fact that you were in the hospital and unable to do something related to earning the commission? It seems unusual that you wouldn't be paid what was due you unless there is some dispute related to the related sales or closings or something similar. If not, it would seem that you would readily be able to obtain a "Summary Judgment" against your employer, file a lien against the Company and reduce the process to simply having the Sheriff enforce the Judgment.

Any legal or other expenses that you have incurred or will incur related to the legal process of trying to collect the commissions due you are fully deductible "Schedule C" business expenses whether you are successful in collecting the commissions or not.

Steve G.

Expert:  Stephen G. replied 1 year ago.

As far as the specific timing related to "closed years", except for the NOL carrybacks & carryforwards which alter the years that are closed ONLY FOR THE PURPOSE OF COMPUTING THE CARRYFORWARD OR CARRYBACK, these are the dates you requested. The practical effect of these rules is that if you owe taxes for "closed years" you have to pay them, but if the IRS owes you a refund for a "closed year", you don't receive it.

2009 - closed on 4/15/2013 or 3 years from the date you filed the return if later than 4/15/2010

2010 - closed on 4/15/2014 or -------same as above--------

2011 - closed on 4/15/2015 or -------same as above--------

2012 - closes on 4/15/2016 or -------same as above--------

2013 - closes on 4/15/2017 or -------same as above--------

2014 - closes on 4/15/2018 or -------same as above--------

Customer: replied 1 year ago.
Thank you Stephen. You are clearly the only one who gives a damn and has properly, albeit unfortunate, assessed my situation properly. I'd like to be able to contact you next week for a follow up question or 2. At that time I'll provide you the highest 5 star review. Thank you.
Expert:  Stephen G. replied 1 year ago.

Thanks very much for your comments.

If you want to reach me again here at JustAnswer.com, just ask for "Steve G." at the beginning of your question.

In the meantime, I would appreciate it if you would take the time to rate me on this question, particularly since I have responded in a way that you have recognized as beneficial to your understanding of the issues at hand.

Without going into the details, the main problem that you encountered with multiple experts attempting to respond to your questions, was caused by you opening multiple questions rather than staying with your original question and if you wanted to work with a different expert, you merely had to "opt out" of working with that expert and indicate what else you expected on the same question. Also, the problem you encountered resulted from the fact that you rated the original expert before you were satisfied that you had received an acceptable response to your question. At that point, there was no further compensation available to us to respond to your questions.

I responded here as I could see your frustration and was able to quickly determine what the issue was & this question carried compensation (possibly from the site); however I will not receive anything unless you provide a rating or at least indicate who should receive the compensation related to your original question.

Subsequently to responding here, I see that another expert told you basically the same thing in response to one of your other duplicate questions, probably on the same basis I did; trying to get you the correct answer & satisfy you for the good of the site, without worrying whether or not we would receive anything for our efforts.

.

Expert:  Stephen G. replied 1 year ago.

What question do you have remaining? You've yet to provide the rating you promised, and despite of that you haven't responded here, which is the proper place, so I remain at a loss as to how to assist you further at this point.