Posted by dealmaker on November 27, 2007 at 15:00:31:
I had a similar situation last year. This is why I have a CPA, I took everything to him, and answered all his questions.
IIRC I didn’t pay any more to get my return prepared last year than this year.
I’d look it up but my stuff is all in boxes. If no other answers in the next few days I may be able to get to it by Saturday.
dealmaker
Tax Questions from Tax Lawyer - Posted by Jimmy
Posted by Jimmy on November 27, 2007 at 11:32:59:
not sure how to handle the following:
sold rental prop in Feb. took back note. collected note payments through Oct. am now taking back property. will have deed in lieu of f/c this week.
how do I treat the note collections during the year? I know how to treat the interest portion. but the principal portion would have generated little pieces of capital gain under the instalment method. now that the deal is dead, what do I do with the principal payments. my guess is that I treat them as return of capital and forget about capital gain.
I collected rent on the unit in Jan-Feb, and will collect some more in Dec. The usual rule is that no depreciation is allowed in the year a property is sold. But what about a year where the prop is sold and re-acquired?
there are probably 5 other questions I should be asking, but haven’t thought of them yet.
God be with you. - Posted by Mr Allen Eddy.
Posted by Mr Allen Eddy. on November 28, 2007 at 16:44:50:
Good Day.
My name is Mr Allen Eddy. A merchant in London. I have been diagnosed with Esophageal cancer. It has defiled All forms of medical treatment, and right now i have only about a short time to to live, According to medical experts, i have not particularly lived my life so Well. As i never really cared for anyone (not even myself) but my Business. Though am very rich.
Now that God has called me, i have willed and given most of my Property and assets to my immediate and extended family members as Well as a few close friends. I want God to be merciful to me and accept my soul so, i have decided to give also to charity Organizations, as i want this to be one of the last good deeds i do on Earth. So far, i have distributed money to some charity organizations in the Algeria and Malaysia.
Now that my health has deteriorated so Badly, i cannot do this myself anymore. I once asked members of my family to close one of my accounts and Distribute the money that i have there to charity organization in Bulgaria and Pakistan, they refused and kept the money to themselves. Hence, i do not trust them anymore, as they seem not to be contended with what i have left for them. The last of my money, which no one knows about is the huge cash deposit of six million dollars $6,000,000 that i, have with a finance firm. I want you to help me receive this deposit, invest it.Am ready to offer you 30% and 70% to charity organizations.After going true your profile you have been found fit and qaulified for this job.
If you are intrested urgently contact me via email,as my health condition is geting worse and want to see this project fullfill in my life time
God be with you.
Mr Allen Eddy.
Answers from Tax Lawyer - Posted by John Hyre
Posted by John Hyre on November 28, 2007 at 09:15:25:
Installment payments are treated as you would normally treat them (i.e., interest & little pieces of cap gain). Sadly, probably have a gain on repossession b/c you “traded” lousy old note for a valuable property, see IRC Section 1038. Pub 537 has some comments on same issue, lousy treatment either way. I would depreciate from re-acquisition, no authority off the top of my head, but seems correct.
John Hyre