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My private investigations business (S-Corp), here in NY,

Customer Question
Hi, my private investigations...

Hi, my private investigations business (S-Corp), here in NY, went through a lawsuit (contractual dispute with a former joint venture partner) where there was a large payout in February 2017. The significant amount of earnings took place in 2016. My accountant says I am now liable for paying the taxes on those earnings, earnings which were ultimately awarded to my former jv partner. The business is no longer in operation due to this lawsuit as it essentially wiped me out, placed me heavily in debt, and we lost our large contract (which we disputed over). I'm aware I may carry the losses forward for years. It seems wrong that I have to pay taxes on $360k+ earnings that were handed over to somebody else. My accountant doesn't seem to know how to facilitate this. A local tax attorney told me he knew precisely what needs to get done but he askes a $6000 retainer. I have gone broke due to this lawsuit. Any advise is immensely appreciated!

Accountant's Assistant: The Accountant will know how to help. Is there anything else the Accountant should be aware of?

The settlement funds as a result of the litigation between Validus/Campa and Informa/Santiago were paid directly to the firm of Magnozzi & Kye as attorneys for the plaintiffs/claimants. Therefore, your accountant should be aware that a 1099 would issue to the firm and the amount paid would be represented as non-compensatory payments.
As for your accountant requesting to issue a “K-1” to Validus/CAmpa, that does not seem correct. As you know based upon the positions taken in the litigation, neither of the claimants/plaintiffs were owners of Informa, Inc. Moreover, a 1099 need not be issued to them as well because no money was ever paid to them during the course of the joint venture.

Submitted: 7 months ago.Category: Finance
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Customer reply replied 7 months ago
The following is response from the plaintiff/claimant attorney when I requested my former jv partner's social security # or EIN: The Accountant will know how to help. Is there anything else the Accountant should be aware of?
Customer: The settlement funds as a result of the litigation between Validus/Campa and Informa/Santiago were paid directly to the firm of Magnozzi & Kye as attorneys for the plaintiffs/claimants. Therefore, your accountant should be aware that a 1099 would issue to the firm and the amount paid would be represented as non-compensatory payments.
As for your accountant requesting to issue a “K-1” to Validus/CAmpa, that does not seem correct. As you know based upon the positions taken in the litigation, neither of the claimants/plaintiffs were owners of Informa, Inc. Moreover, a 1099 need not be issued to them as well because no money was ever paid to them during the course of the joint venture.
Answered in 46 minutes by:
12/1/2017
Financial Professional: PDtax, CPA, MBA replied 7 months ago
PDtax
PDtax, CPA, MBA
Category: Finance
Satisfied Customers: 5,090
Experience: Tax professional and business consultant for 35 years.
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Hi from Just Answer. I'mCustomer and can assist. And for far less than the retainer you suggested.

Please see my offer to assist via phone conference, to keep matters private.

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Financial Professional: PDtax, CPA, MBA replied 7 months ago

premium service window isn't opening on my end yet. I'll post my offer shortly, and I'll let site management know.

Customer/p>
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Customer reply replied 7 months ago
I’m looking for some insight at this point in time. If it seems like something you may facilitate, fine, but simply replying that you know what to do gets me nowhere and feel like I was just fleeced. My number is(646) 208-2573. I am seeking insight. Please.
Financial Professional: PDtax, CPA, MBA replied 7 months ago

See my phone call offer.

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Customer reply replied 7 months ago
I am not opposed to paying additional $ for additional information. I just paid $35 and received zero information or insight. Please provide some insight. If it seems you know what you’re talking about, fine, then I would move forward with paying for additional advise, etc.
Financial Professional: PDtax, CPA, MBA replied 7 months ago

There are issues yet to be disclosed. I would ask what the settlement was for, if you were both owners during the time, your payment history, tax return history (did the other party ever get k-1, either of you get w-2) and more. The answers will drive my assistance.

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