All Forum Posts by: Bruce D. Kowal

Is that what this is all about?  $136,869 spread over some number of partners?  The is too much professional time and billings, zoom calls, aggravation.  You know that you are at wit's end when you look to BP for an answer.  :)

You might just use Form 8082 to get the number you want, and everyone file and forget it.  

I figured that this might trigger a Change in Accounting method.  

As I said originally, as long as IRS is not getting stiffed, let each Member file 8082, and let everyone get on with their lives.

Thanks for the vote!!

I wonder if that would merit a Change of Accounting Method filing. By the way, I had something similar back in 2009, well almost similar. A Client was a Member in an LLC. He was not the Managing Member, just an Ole Member, like you and the other investors. Well, the Managing Member, the SOB, upon a receiving a large capital gain from sale of property [a §1231 gain] took the unusual and selfish step of grabbing most of the proceeds [damn the OA], and for good measure allocating a lot of gain to Members [again, damn OA].

What to do?  Good question, right?  April 15 approaching, who the Heck wants to start hiring lawyers.  Right?

Well, the best tool in my toolkit is Form 8082  Notice of Inconsistent Treatment.  https://www.irs.gov/forms-pubs/about-form-8082

You file this, and let IRS deal with it, if they even want to.  In other words, you enter the K-1 information the way you think it should be.  And. . . . just to be really clever.   Paper file the return, with the Form 8082 as the last page.  And make sure your CPA hits the button for every possible sub schedule.   Enough said. Can't give away all my tricks for free.  

Way to go, Gary!  You are on fire!

You said you have an Accountant.

Well, here's a cheery thought.  The IRS has three years from date of filing to audit your tax returns.  As long as you are not understating any type of income - and I am taking vary broad view here - - and you are not, overall, defrauding the US Treasury.  

Hey, go for whatever you think is right.  Especially if you think your CPA is "gaming" you. 

I would have a lively discussion with the syndicator's CPA. You realize, of course, that by law LLC's in every state, must allow you to view the tax returns.

"Many states require an LLC to maintain certain records and provide that members have a right to inspect these records. These records include the names, addresses, contributions, and shares of profits and losses of each member, the names and addresses of managers, and certain tax returns. LLCs can expand or reasonably restrict the members' right to inspect books and records in their operating agreements."

Make the Syndicator spend money on a written tax opinion by HIS accountant. Be a nuisance! Contact other investors, see what they feel about this. Also, demand to speak with the law firm representing the LLC/Syndicator. Threaten to file a complaint with the Bar Association for sloppy work, and with the State Society of CPA's against the Syndicator's CPA firm.

Basically, throw your frustration and doubt back at them, because they caused it by not being upfront with you.  

Best case, they are tired of dealing with you, and buy out your interest at Fair Market Value.

In any event, in three years you are likely to be home free.  

Try this:  Monaeo Personal Software for Tax Residence Audits

Good grief! A lot of important questions, and you are looking for tips from the internet. Here is one good tip. Until you actually file something, you are free to ignore whatever structure you set up. If you set up an S corp or LLC, you DON'T have to file a return. You can walk away and report on another entity. Observation: if you have a corp, your State of incorporation will likely charge an annual minimum fee. Even if you are inactive. New York State loves to take a bite out of you. Plus NYC.

Best advice.  Extend your tax returns for 2023 until you have decided what to do.

NJ LLC's have annual filing requirements just to maintain LLC status. This is regardless of income taxes. [I am nearby in Bayonne.]

 New Jersey Annual Reports

You have already chosen your tax structure. You are an LLC. The Members will taxed as if this were a Partnership, unless you elect to be taxed as an S corp. i.e. an LLC taxed as an S Corp. Go ahead, complicate your life, right off the bat!