calculating aggregated gross receipts for CA taxes
Is anyone out there living in California? TurboTax requires
users to supply the aggregated gross receipts for our
partnerships. Aggregated gross receipts is the total of all
positive income amounts plus my share of the sales proceeds
(not the gains or losses) from stock sales. Has anyone
calculated this yet? Can you share with me the step by step
process using bivio reports?
users to supply the aggregated gross receipts for our
partnerships. Aggregated gross receipts is the total of all
positive income amounts plus my share of the sales proceeds
(not the gains or losses) from stock sales. Has anyone
calculated this yet? Can you share with me the step by step
process using bivio reports?
I found the official definition of gross receipts on the CA
Franchise Tax Board website. "Gross receipts" means the
gross amounts realized (the sum of money and the fair market
value of other property or services received) on the sale or
exchange of property, the performance of services, or the
use of property or capital (including rents, royalties,
interest, and dividends) in a transaction that produces
business income, in which the income, gain, or loss is
recognized (or would be recognized if the transaction were
in the United States) under the Internal Revenue Code, as
applicable for purposes of this part. Amounts realized on
the sale or exchange of property shall not be reduced by the
cost of goods sold or the basis of property sold. Gross
receipts, even if business income, shall not include the
following items: (none of the exceptions appears to apply to
investment clubs)
Is this just my share of each of the sales proceeds? Where
can I find this in the bivio reports?
Franchise Tax Board website. "Gross receipts" means the
gross amounts realized (the sum of money and the fair market
value of other property or services received) on the sale or
exchange of property, the performance of services, or the
use of property or capital (including rents, royalties,
interest, and dividends) in a transaction that produces
business income, in which the income, gain, or loss is
recognized (or would be recognized if the transaction were
in the United States) under the Internal Revenue Code, as
applicable for purposes of this part. Amounts realized on
the sale or exchange of property shall not be reduced by the
cost of goods sold or the basis of property sold. Gross
receipts, even if business income, shall not include the
following items: (none of the exceptions appears to apply to
investment clubs)
Is this just my share of each of the sales proceeds? Where
can I find this in the bivio reports?
Linda:
I am making some assumptions about your question based on
clues in your two messages. If my assumptions are wrong, my
anwer may not be helpful or correct.
Because you mention Turbotax, I am assuming you are
preparing your personal income tax returns; not the
partnership return for your club.
The reference to gross receipts only becomes pertinent when
you are a partner in a partnership engaged in a business;
not merely investing in common stock.
If you read all the definitions in R&TC §25120, they contain
the words "Business" or "Commercial." For a taxpayer to be
liable for a gross receipts tax, it has to be engaged in a
business. If you are a member of a traditional investment
club, you are not engaged in business.
When using Turbotax to prepare personal income tax, there is
a K-1 worksheet where you can transfer the numbers from the
K-1 provided to you by your club into the Turbotax program.
Just fill in the lines in Turbotax that match the lines that
have numbers on your K-1. Leave the rest blank.
If you clarify your situation, I would be happy to tailor my
answer accordingly.
Jack Ranby, Treasurer
Grants Partners Investment Club
I am making some assumptions about your question based on
clues in your two messages. If my assumptions are wrong, my
anwer may not be helpful or correct.
Because you mention Turbotax, I am assuming you are
preparing your personal income tax returns; not the
partnership return for your club.
The reference to gross receipts only becomes pertinent when
you are a partner in a partnership engaged in a business;
not merely investing in common stock.
If you read all the definitions in R&TC §25120, they contain
the words "Business" or "Commercial." For a taxpayer to be
liable for a gross receipts tax, it has to be engaged in a
business. If you are a member of a traditional investment
club, you are not engaged in business.
When using Turbotax to prepare personal income tax, there is
a K-1 worksheet where you can transfer the numbers from the
K-1 provided to you by your club into the Turbotax program.
Just fill in the lines in Turbotax that match the lines that
have numbers on your K-1. Leave the rest blank.
If you clarify your situation, I would be happy to tailor my
answer accordingly.
Jack Ranby, Treasurer
Grants Partners Investment Club
John,
You did make the right assumptions. I am transferring info from the CA k-1 into TurboTax. TurboTax says not to leave the entry blank. In the TurboTax forum, someone else wrote in that they did not get the aggregated gross receipts with their k-1. The reply was to enter a zero. That is what I did. I was just checking to see how other California investment club investors responded. Thank you for responding.
For tax purposes, is an investment club considered a business, just not a taxpayer's regular trade or business as defined in Revenue and Taxation Code (R&TC) section 25120?
Linda Lee
From: John W Ranby <ranby@azbar.org>
To: club_cafe@bivio.com
Sent: Sunday, April 6, 2014 1:25 PM
Subject: [club_cafe] Re: calculating aggregated gross receipts for CA taxes
To: club_cafe@bivio.com
Sent: Sunday, April 6, 2014 1:25 PM
Subject: [club_cafe] Re: calculating aggregated gross receipts for CA taxes
Linda:
I am making some assumptions about your question based on
clues in your two messages. If my assumptions are wrong, my
anwer may not be helpful or correct.
Because you mention Turbotax, I am assuming you are
preparing your personal income tax returns; not the
partnership return for your club.
The reference to gross receipts only becomes pertinent when
you are a partner in a partnership engaged in a business;
not merely investing in common stock.
If you read all the definitions in R&TC §25120, they contain
the words "Business" or "Commercial." For a taxpayer to be
liable for a gross receipts tax, it has to be engaged in a
business. If you are a member of a traditional investment
club, you are not engaged in business.
When using Turbotax to prepare personal income tax, there is
a K-1 worksheet where you can transfer the numbers from the
K-1 provided to you by your club into the Turbotax program.
Just fill in the lines in Turbotax that match the lines that
have numbers on your K-1. Leave the rest blank.
If you clarify your situation, I would be happy to tailor my
answer accordingly.
Jack Ranby, Treasurer
Grants Partners Investment Club
Linda,
I've been asking some of my CA tax preparer colleagues about
this. They tell me that the gross receipts could come into
play if you are subject to CA AMT, but that isn't usually a
problem unless your income approaches 7 figures. They also
weren't certain that an investment club met the requirements
for a business under the CA Code, but my quick reading of
the Code seemed to include just about everything. My
colleagues also suggest entering $0 or $1 to make the
software error vanish.
Ira Smilovitz
I've been asking some of my CA tax preparer colleagues about
this. They tell me that the gross receipts could come into
play if you are subject to CA AMT, but that isn't usually a
problem unless your income approaches 7 figures. They also
weren't certain that an investment club met the requirements
for a business under the CA Code, but my quick reading of
the Code seemed to include just about everything. My
colleagues also suggest entering $0 or $1 to make the
software error vanish.
Ira Smilovitz
Ira, thanks for checking on this.
From: Ira Smilovitz <ira.smilovitz@gmail.com>
To: club_cafe@bivio.com
Sent: Sunday, April 6, 2014 5:37 PM
Subject: [club_cafe] Re: calculating aggregated gross receipts for CA taxes
To: club_cafe@bivio.com
Sent: Sunday, April 6, 2014 5:37 PM
Subject: [club_cafe] Re: calculating aggregated gross receipts for CA taxes
Linda,
I've been asking some of my CA tax preparer colleagues about
this. They tell me that the gross receipts could come into
play if you are subject to CA AMT, but that isn't usually a
problem unless your income approaches 7 figures. They also
weren't certain that an investment club met the requirements
for a business under the CA Code, but my quick reading of
the Code seemed to include just about everything. My
colleagues also suggest entering $0 or $1 to make the
software error vanish.
Ira Smilovitz