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Forum
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RE: Suspicious Verizon Phone Call
Not owned by Verizon.
http://www.networksolutions.com/whois-search/myverizonsummer.com
Look at the creation date on it. Yesterday. I'd bet the guy whose name it is in is either an identity theft victim, or just a made up name.
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msmith1199
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05/20/12 08:43pm |
Around the Campfire
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RE: Wood weight?
I'm starting a small woodworking business. I was going to stock up on the wood to try and get a good deal on it. The deal didn't work out so I can't get the wood. In California walnut sells for $6 or more per BF. I was going to get the 1000 bf for $3 a BF so that's a savings of $3,000 less the cost of driving to pick it up. But the person who told me about it was wrong on who they sell to. They don't sell to shop owners, only distributors. They said I could be a distributor, but I'd have to buy a lot more than 1000 BF at a time. But I don't want to sell lumber, I want to make things and I don't have space for 5000 bf of wood anyway.
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msmith1199
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05/19/12 09:53pm |
Around the Campfire
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RE: Gun shows???
Most of the people displaying at gun shows are gun shop owners (at least the ones in California) and the prices are about the same. They may have some "sale" prices but I've never seen any real good deals. I just go to look at everything. The often have a lot of accessories to see any buy and I have got decent deals on ammo.
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msmith1199
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05/19/12 09:48pm |
Around the Campfire
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RE: Insurance Question
Thanks for the replies. Yes, I do have separate policies on the two vehicles.
As far as seeking advice, I'm not....just opening up an academic discussion and, who knows, perhaps someone with actual knowledge would chime in.
I was an insurance adjuster many years ago so I can give you a generic answer. Generally the towing vehicle's insurance is primary for puposes of liability. So any damage your towed does to the property of others is covered by your motorhome policy even if it comes off the motorhome. The thing I'm not positive about is damage to the towed. My guess is it would be fixed by your own collision insurance on that towed. If you don't have collision coverage then I don't think it gets covered.
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msmith1199
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05/18/12 08:44pm |
Class A Motorhomes
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RE: Insurance Question
In Michigan the tow vehicle covers the towed while hooked together. If it comes unhooked the towed vehicle better have insurance, because it is now on it's own. That applies to trailers also.
Trailers? I have a little utility trailer that has no insurance. So if I towed it to Michigan and it came off my truck my truck insurance wouldn't cover any damage it did?
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msmith1199
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05/18/12 07:37pm |
Class A Motorhomes
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RE: Bicycle carrier???
Fire Up, I've seen your rig somplace before. I don't recall if it was on the road or not. I recognize your picture as being at the KOA in Vegas and the buildings in the back are a Hilton time share that I've stayed at before, so it may have even been there that I saw you. I remember it because of all the toys.
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msmith1199
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05/18/12 12:56pm |
Class A Motorhomes
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RE: Know your prices!!!!
Although in most cases it's just a data entry mistake, there have been many stores caught doing this on purpose.
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msmith1199
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05/18/12 12:52pm |
Around the Campfire
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RE: Another tax question for business owners
One of the joys of tax preparation. Rarely is the answer in only one section of the code. It is not unusual to have conflicting provisions that cause the preparer to interpret and try to chose the best solution in that particular instance. I don't believe your CPA was trying to mislead you, it just required applying multiple sections and subsections of the code. Sometimes the preparer quits reading too soon. I don't miss those days at all.
The CPA wasn't trying to mislead me, but she gave me bad info that could have cost me thousands of dollars in taxes this year that I didn't have to pay. So she's not my CPA anymore. I can't afford big mistakes like that even though it does appear to be a confusing area of the law. But I'm no CPA and I figured it out so how complex can it really be?
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msmith1199
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05/18/12 08:27am |
Around the Campfire
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RE: Another tax question for business owners
Just for giggles, I went into my tax prep package and entered a bogus return for 2011 and it appears you are right - I didn't read far enough! The W-2 wages were added to the Sch C revenue for the business income limitation on line 11 of Form 4562. I should have done that before all of this started! Now all you have to do is convince your CPA. Giving him a copy of the reg may help.
You must have missed my post above where my CPA emailed me back and said I was correct. I guess I wasn't such a "lay person" afterall on this one.
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msmith1199
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05/18/12 08:25am |
Around the Campfire
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RE: Is this a scam
Take a couple of sentences out of that email and put it in Google. You'll see many people received that exact same email. They aren't even changing the price. Apparently the scam is they will email you a link to this "eBay buyer proection program." The link takes you to a fake webpage that looks like eBay but you wire your money directly to the crook and never hear from them again.
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msmith1199
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05/17/12 09:11pm |
Class A Motorhomes
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RE: Another tax question for business owners
OK, I'll try this one more time. The term trade or business generally includes any activity carried on for the production of income from selling goods or performing services. What is missing here is the words by the owner following "carried on."
Section 162(a) gives you the definition of a trade or business. Regardless of how you want to interpret a publication, Section 162 is the law as passed by Congress. As a further explanation you may want to read Section 1-179-2 of the IRS regulations, page 240 (that's about the sixth page of the linked document), right column, where it tells you that section 162 is the definition of a trade or business for purposes of the 179 deduction and also defines what "active conduct" of the business is. You will notice that in all of these references it is talking about the individual being in a trade (plumber, electrician, or other service) or business (which could be retail or otherwise) that the individual is an owner, either as a sole proprietor, partner or S-Corp owner. In no example or discussion does it define W-2 earnings from someone else's business as be in a trade or business. Those W-2 earnings are called "earned income" not "income from a trade or business."
If you hunt on the internet hard enough you will find that someone will tell you that you can do anything you wish in regards to taxes however that doesn't make it legal. The soucres I gave you are the actual law and regulations from Congress and the IRS.
When you fill out your own tax return, you can basically do anything you wish and hope the IRS doesn't catch it. It is usually much harder to find a professional that will fill out the forms incorrectly for you just because you "think" it is OK.
Thank you for the link to 1-179-2 as that clearly answers my question, but it isn't on page 6, it's on page 7.
From Page 7:
(iv) Employees. For purposes of this
section, employees are considered to be
engaged in the active conduct of the
trade or business of their employment.
Thus, wages, salaries, tips, and other
compensation (not reduced by unreimbursed
employee business expenses) derived
by a taxpayer as an employee are
included in the aggregate amount of
taxable income of the taxpayer under
paragraph (c)(1) of this section.
And paragraph (c) (1) of this section is the one that talks about the taxable income limit:
(c) Taxable income limitation—(1) In
general. The aggregate cost of section
179 property elected to be expensed
under section 179 that may be deducted
for any taxable year may not exceed
the aggregate amount of taxable income
of the taxpayer for such taxable
year that is derived from the active
conduct by the taxpayer of any trade
or business during the taxable year.
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msmith1199
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05/17/12 05:22pm |
Around the Campfire
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RE: Another tax question for business owners
Okay well yesterday I sent my CPA an email asking for clarification on it and she checked with some other CPA's and just got back with me and said I was correct. I can offset other W2 wages with the 179 deduction. So now who should I listen to?
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msmith1199
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05/17/12 04:59pm |
Around the Campfire
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RE: Another tax question for business owners
Here's the actual language from Section 179 of the revenue code:
(3) Limitation based on income from trade or business
(A) In general
The amount allowed as a deduction under subsection (a) for any taxable year (determined after the application of paragraphs (1) and (2)) shall not exceed the aggregate amount of taxable income of the taxpayer for such taxable year which is derived from the active conduct by the taxpayer of any trade or business during such taxable year."
And this is the definition of trade or business from the IRS website:
"The term trade or business generally includes any activity carried on for the production of income from selling goods or performing services. It is not limited to integrated aggregates of assets, activities, and goodwill that comprise businesses for purposes of certain other provisions of the Internal Revenue Code. Activities of producing or distributing goods or performing services from which gross income is derived do not lose their identity as trades or businesses merely because they are carried on within a larger framework of other activities that may, or may not, be related to the organization's exempt purposes."
So working as a W2 employee for somebody else that you get income from seems to me to qualify as a trade. Section 179 specifically says "active conduct of the tax payer of ANY trade or business during the taxable year."
I'm open for criticism here, those of you who said I'm wrong on this how come I'm wrong? Where does it say the W2 income has to come from a business you own? In doing Google searches I see many conflicting opinions out there mostly given on forums like this. I pointed out the one CPA website that seems to be saying the same thing I am. I saw that exact same language on other websites too. The way I'm reading this the 179 deduction cannot be used to offset income from other sources such as retirement payments, capital gains, and things of that nature, but as long as it's W2 wages or business income, regardless of the source, then you can use the 179 deduction against it.
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msmith1199
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05/17/12 02:00pm |
Around the Campfire
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RE: Another tax question for business owners
"For Schedule C sole proprietorships, it is actually possible to use Section 179 to create or increase a large net loss if there are other sources of income (W-2s, etc.) that result in a positive taxable income before considering the Sec. 179 deduction."
The above comes from a website of a CPA firm and this seems to agree with the way I'm reading Publication 946.
http://www.groco.com/readingroom/sec179_businessequipment.aspx
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msmith1199
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05/17/12 01:39pm |
Around the Campfire
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RE: Another tax question for business owners
.duplicate
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msmith1199
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05/17/12 01:04pm |
Around the Campfire
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RE: Another tax question for business owners
Depreciating an item over several years means your tax deduction for buying the item is spread over several years. The first year you are paying taxes on the money you already spent. A company I know got themselves in trouble by buying $600,000 in equipment and having to depreciate it which meant they owed a bunch of taxes and had problems paying the taxes. They leased equipment for a while after that.
I suppose depreciation could make sense if the business will not owe taxes the first year due to losses.
I understand how it works, that wasn't the question.
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msmith1199
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05/17/12 01:03pm |
Around the Campfire
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RE: Another tax question for business owners
Your CPA is correct! However, he may not have explained to you that any loss not allowed due to the business income limitation will be carryed over to future years to offset income in those years. If you read the instructions for Form 4562 you will see how this all interacts and restricts your loss to business income.
You must also realize that if you do not hold the property for the normal length of depreciation, you will be required to count the difference in the 179 deduction and what would have been normally depreciated as income.
I see that the loss can be carried over, so either way I don't have to depreciate the equipment. But if I can write it off against W2 salary then I want to do that. What the CPA says seems to conflict with the IRS publication on that.
The W-2 income that Pubication 946 is referring to is business income of the taxpayer. If you had a Partnership or S-Corp that paid you a salary and reported that salary on a W-2, you could use that as a trade or business income. A W-2 from a business in which you have no ownership interest cannot be counted as income from a trade or business. Trust your CPA or get another one you can trust - to constantly question their expertise is not a good idea. When a lay person reads the IRS pubs or forms they frequently misread them as they do not understand the tax language.
That's why I'm asking here. And I'll question anybody if I think they may not be right, I don't care if they are a CPA. I have an MPA and spent many years in law enforcement so I do know how to read laws. You may be correct in what you are saying, but Pub 946 does not clearly say this.
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msmith1199
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05/17/12 01:01pm |
Around the Campfire
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RE: Another tax question for business owners
Another thing to take into consideration is your statement that you won't actually start working for several months. Even though you buy the equipment now, it is not placed into service until you start using it for its intended business purpose. Accordingly you can't depreciate it under sec. 179 or regular depreciation until then. So if you buy the equipment this year but you don't actually start working in your business until next year, you can't depreciate until next year.
It's only May. A couple of months is July or August.
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msmith1199
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05/17/12 09:20am |
Around the Campfire
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RE: Another tax question for business owners
I guess my question is why you are even considering this purchase for a 179 deduction if you could simply apply normal depreciation over the course of the next several year...
Why would I not want to take the 179 deduction? That's what it's there for.
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msmith1199
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05/17/12 09:20am |
Around the Campfire
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RE: Another tax question for business owners
Your CPA is correct! However, he may not have explained to you that any loss not allowed due to the business income limitation will be carryed over to future years to offset income in those years. If you read the instructions for Form 4562 you will see how this all interacts and restricts your loss to business income.
You must also realize that if you do not hold the property for the normal length of depreciation, you will be required to count the difference in the 179 deduction and what would have been normally depreciated as income.
I see that the loss can be carried over, so either way I don't have to depreciate the equipment. But if I can write it off against W2 salary then I want to do that. What the CPA says seems to conflict with the IRS publication on that.
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msmith1199
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05/17/12 09:19am |
Around the Campfire
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