Randalltax : Thank you for contacting me about your Tax issue. I will work hard to help you understand the issue clearly.
Randalltax : first, it is always recommended that you hire someone to represent you. I understand it is costly, but often worth the money and reduction in aspirin needed.
Hi, you answered my questions before, how are you doing?
Randalltax : the IRS can disallow business losses if there is no evidence of a real effort to have a profit. The general yardstick is that a genuine business should have a profit 3 out of five years.
Randalltax : if not, the IRS assumes your activity is a Hobby, and therefore will not allow losses against ordinary income. Customer:
yes, I know that . . . reason I didn't have profit was economy was bad (I'm in realestate) and I pay a lot of property taxes on vacant land I own.
Randalltax : you would need to prove that you have a long term profit motive and a plan for profitability within a reasonable time frame
Randalltax : thersfar ethers aroblem right there.
Randalltax : you cannot deduct property tax on vacant land typically
Randalltax : thattypically that is added to your cost basis and is capitalized
yes, I held the property for long-term investment hoping economy would get better but it didn't now I'm stuck paying thousands of dollars in property tax on vacant land i can;t sell . . .
we discussed this before, i'm NOT a dealer but an investor
investors do not capitalize, there is no way i could stay in business if I capitalized
Randalltax : Raw land doesn't matter if you are an investor or dealer. Treated the same.
Randalltax : Sounds like IRS is disagreeing with you as we'll
Randalltax : Sorry for typos....iPad keeps changing my words
irs is not allowing any of my expenses
Randalltax : Hobby versus profit motive is usually where they start.
Randalltax : you really need representation.
i talked to other CPAs and they all say i can deduct property taxes if I'm an investor
not a hobby, i make a living at this
Randalltax : if you don't get the results you want in the first level of audit, you have the right to an appeal.
Randalltax : a
Randalltax : appeals officers are generally more knowledgeable in tax law than front line exam Customer:
i have one on appeal (just filled out form) and one in tax court
Randalltax : i have a lot of experiences in dealing with exam agents that make up their own law that appeals officers just ignore.
okay, thx, this is real nightmare I think if i could just meet someone face to face and explain it . . . the mistake.
mistake of reporting expenses on schedule C rather than A
Randalltax : is yours a correspondence audit?
Randalltax : if so, you can request an office exam