Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax
This answer was rated:

My client bought a boat with a two million dollar loan for

commercial purpose. Boat is foreclosed...
My client bought a boat with a two million dollar loan for commercial purpose. Boat is foreclosed. His S-Corp that was on Title gets a 1099A for the 1.1 million resulting from the foreclosure and his other S corporation also gets a 1099A that guaranteed the loan also gets a 1.1 million 1099A. If I file his K1s that way is he not hit twice with the same gain?
Show More
Show Less
Ask Your Own Tax Question
Answered in 31 minutes by:
10/5/2013
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 13,265
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
Verified

Lane :

Yes, they should have only filed one 1099. They're not forgiving 2.2mil., they're only forgiving 1.1mil.

Lane :

I would ask the lender for a corrected 1099A that changes one of the 1099s to zero

Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 13,265
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
Verified
Lane and 87 other Tax Specialists are ready to help you
Ask your own question now
Thanks for the rating Andy.

In the event the try not to correct, ...

YOu should let them know that the lender may have to pay a penalty for failing to report the correct amount of income on Form 1099-MISC. The penalty is $15 per incorrect 1099 if the corrected 1099 is filed within 30 days of the original deadline for filing Forms 1099 and 1096 with the IRS. The penalty rises to $30 per incorrect 1099 if the correction is filed by after 30 days but before August 1, and $50 per incorrect 1099 if the correction is filed after August 1. The IRS will waive the penalty if the corporation can show reasonable cause. For more information, see the Instructions for Forms 1099, Failure To File Correct Information Returns by the Due Date. The IRS also provides instructions on how to file corrected 1099 forms.


Hope this helps

Lane
Ask Your Own Tax Question
Customer reply replied 4 years ago

Yeah this is a tough one. The IRS instructions said that a Guarantor is not a "debtor" in the reporting for1099C sense. 1099A are not directly related to the loan so I was not clear as a Guarantor of the loan how the S Corporation that guaranteed the loan but was not on title to the asset foreclosed would be hit with a 1099A.


Yep,

... just VERY misguided on the lender's part.

Regardless of who the debtor is, there is only one.

Sounds almost like their right hand doesn't know what the left hand is doing.

OR this is a collection tactic ... but again, if so VERY misguided.

(They're running afoul of the requirement that their information reports be accurate).
Ask Your Own Tax Question
Ask Lane Your Own Question
Lane
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 13,265
13,265 Satisfied Customers
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986

Lane is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,338 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,980 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
Situation Received 1099-MISC but should have received a W-2.
Situation Received 1099-MISC but should have received a W-2. Form 3949-A was filed. Want to do a return to include the amount on the 1099-MISC but only paying the employee share of SS/Med. I believe t… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,282 satisfied customers
DO I HAVE TO REPORT PURCHASES OF METALS ON A 1099 AND DO I
DO I HAVE TO REPORT PURCHASES OF METALS ON A 1099 AND DO I HAVE TO REPORT SALES OF METALS ON A 1099? DOES THE PERSON WHO SOLD ME THE METALS OR BOUGHT THE METALS ISSUE OR RECEIVE A 1099? … read more
Lane
Lane
JD, CFP, MBA, CRPS
13,265 satisfied customers
Does copy 1 of the 1099-MISC have to be filed with NYS? I am
Does copy 1 of the 1099-MISC have to be filed with NYS? … read more
Carter McBride
Carter McBride
LLM
247 satisfied customers
What are the forms for reporting Rental Income to the IRS on
What are the forms for reporting Rental Income to the IRS on foreign properties - we collect each month? Is this filed separately from our personal returns?… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,074 satisfied customers
Reporting pension and social security income on both Forms
Reporting pension and social security income on both Forms 1040 and 1041? … read more
Lane
Lane
JD, CFP, MBA, CRPS
13,265 satisfied customers
Is there a form to file with the IRS for tax periods that
Is there a form to file with the IRS for tax periods that have ran past the statute of limitations from the date of assessment … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Will my filing of federal taxes by the April deadline be
Will my filing of federal taxes by the April deadline be according to the current set of laws (e.g. unlimited deduction of state and local taxes) or will the new "reformed" tax bill and its new rules … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,797 satisfied customers
I need some clarification about collecting, reporting, and
I need some clarification about collecting, reporting, and paying sales tax (and VAT) for my online business that sells from the United States (Maine) and ships within the United States and other coun… read more
Lane
Lane
JD, CFP, MBA, CRPS
13,265 satisfied customers
I over-reported income on 1040 in 2012. Will filing a 1040x,
I over-reported income on 1040 in 2012. Will filing a 1040x, adjusting off the over-reported income, trigger and audit?… read more
Lane
Lane
JD, CFP, MBA, CRPS
13,265 satisfied customers
Since the deadline to file 2016 taxes is Jan2018 what is the
since the deadline to file 2016 taxes is Jan2018 what is the deadline to deposit in my IRA credited to 2016? … read more
abci168
abci168
Principal
27 satisfied customers
I owe the IRS $2340, for late reporting on form 1065, can I
I owe the IRS $2340, for late reporting on form 1065, can I just send them a partial payment and ask for installments if possible. thanks: Luis v Olivares Lodi, Ca … read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,282 satisfied customers
I need to amend Form 1096/1099 to issue an additional 1099
I need to amend Form 1096/1099 to issue an additional 10991) Can I fill out form 1099 and 1096 with a black ink pen2) Does the total on Form 1096 only include the additional 1099 ( I had completed 109… read more
taxmanrog
taxmanrog
Master\u0027s Degree
776 satisfied customers
My bank send a 1099-misc for $1000 of interest instead of
My bank send a 1099-misc for $1000 of interest instead of 1099-int. It was checked at box 3 however I am not sure is business checking incentive constitute "prize winnings" ? Because otherwise I would… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,797 satisfied customers
What tax form is filed to report dividends paid by US Corp?
What tax form is filed to report dividends paid by a US Corp which is owned by a Canadian Corp? I think it might be 1042S. I want to know the rate of WH.… read more
abci168
abci168
Principal
27 satisfied customers
S-corporate 100% owner incorrectly issued herself 1099-Misc
S-corporate 100% owner incorrectly issued herself 1099-Misc for health insurance premium payments for 2016. what is the best way to correct this situation now? To report amount reported on 1099 on sch… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,797 satisfied customers
2016 FORM 1099 misc box 7. the company forgot to issue one
2016 FORM 1099 misc box 7. the company forgot to issue one more 1099-misc to contractor. the original 1099 and 1096 for other contractors had been mail out to IRS. so if we have to prepare this one ad… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,980 satisfied customers
Do flea market owners have to give a form 1099-MISC to the
Do flea market owners have to give a form 1099-MISC to the vendors? She only collects the money for the renter/vendors. She gives them the money that she collected for them minus her fee. It's not her… read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
How can i report one asset exchange to two assets in form
how can i report one asset exchange to two assets in form 8824? do I need to fill out two 8824 forms or just one? thanks. HL… read more
ABC Accounting Group
ABC Accounting Group
Bachelor\u0027s Degree
686 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x