Another Tax Question
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Another Tax Question Hi my club had a combind $1.01 between dividends and interest for the year. Does are club need to file a 1065 and each member a K-1 for there portion of that? Thanks Your club also had (at least) $99 in expenses for your bivio subscription. The IRS will be looking for a 1065 and you are required to file as long as you have ANY income or expense.
Ira Smilovitz
In a message dated 02/05/09 02:48:26 Eastern Standard Time, jvandermark@bivio.com writes:
Actually we had no expenses, we are doing a trial period for bivio. Also when I fill out the forms in TurboTax it rounds the figures on the K-1 to 0. iras1 wrote: > Your club also had (at least) $99 in expenses for your bivio subscription. The IRS will be looking for a 1065 and you are required to file as long as you have ANY income or expense. > > Ira Smilovitz > > > > In a message dated 02/05/09 02:48:26 Eastern Standard Time, jvandermark@bivio.com writes: > > > > .aolmailheader {font-size:8pt; color:black; font-family:Arial} > a.aolmailheader:link {color:blue; text-decoration:underline; font-weight:normal} > a.aolmailheader:visited {color:magenta; text-decoration:underline; font-weight:normal} > a.aolmailheader:active {color:blue; text-decoration:underline; font-weight:normal} > a.aolmailheader:hover {color:blue; text-decoration:underline; font-weight:normal} > > Hi my club had a combind $1.01 between dividends and > interest for the year. Does are club need to file a 1065 and > each member a K-1 for there portion of that? > > Thanks > > > Great Deals on Dell Laptops. Starting at $499. <<
Actually we had no expenses, we are doing a trial period for bivio. Also
when I fill out the forms in TurboTax it rounds the figures on the K-1 to
0.
>> The advice given was that if you had any income/expense you should
file. It won't cost you anything in bivio. If, for whatever reason, you decide
not to file, you are facing a possible penalty of $25 times the number of
partners times the number of months up to a maximum of 5 months.
Rip West
Saint Paul, MN If you have a tax number for the partnership, you should file a return, even if it contains zeros, for three reasons: 1) you won't have to respond to an IRS inquiry later about why you did not file; 2) you will not be subject to a non-filer penalty, and 3) it will start the running of the statute of limitations on auditing the return. Because you are using bivio as a trial, it would also make sense to use it to prepare the tax returns. I don't know the capability of Turbotax to prepare investment club partnership returns, but why not use the product specifically designed for the task. Jack Ranby Jason wrote: > Actually we had no expenses, we are doing a trial period for > bivio. Also when I fill out the forms in TurboTax it rounds > the figures on the K-1 to 0. > > iras1 wrote: > > Your club also had (at least) $99 in expenses for your bivio subscription. The IRS will be looking for a 1065 and you are required to file as long as you have ANY income or expense. > > > > Ira Smilovitz > > > > > > > > In a message dated 02/05/09 02:48:26 Eastern Standard Time, jvandermark@bivio.com writes: > > > > > > > > .aolmailheader {font-size:8pt; color:black; font-family:Arial} > > a.aolmailheader:link {color:blue; text-decoration:underline; font-weight:normal} > > a.aolmailheader:visited {color:magenta; text-decoration:underline; font-weight:normal} > > a.aolmailheader:active {color:blue; text-decoration:underline; font-weight:normal} > > a.aolmailheader:hover {color:blue; text-decoration:underline; font-weight:normal} > > > > Hi my club had a combind $1.01 between dividends and > > interest for the year. Does are club need to file a 1065 and > > each member a K-1 for there portion of that? > > > > Thanks > > > > > > Great Deals on Dell Laptops. Starting at $499. The penalties have increased. They're now:
Late filing: $90/month times the number of partners in the partnership for up to 12 months.
Failure to furnish information timely to partners: $50 per Schedule K-1
Ira Smilovitz
In a message dated 02/05/09 11:59:38 Eastern Standard Time, ripwest@comcast.net writes:
TurboTax Business (which prepares partnership returns) cannot prepare an investment club 1065 correctly unless you manually enter each number as an override. Doing so is more effort than preparing the return manually using paper and pen. You should use bivio's tax module which will prepare the return correctly without further data manipulation.
The reason TT cannot prepare the return correctly is that the ownership percentages of your members varies with each contribution. TT expects a constant percentage allocation of income and expense for the entire year.
Ira Smilovitz
In a message dated 02/05/09 11:45:52 Eastern Standard Time, jvandermark@bivio.com writes:
<<
The penalties have increased. They're
now:
Late filing: $90/month times the number of partners
in the partnership for up to 12 months.
Failure to furnish information timely to partners:
$50 per Schedule K-1
>>
WOW! That's huge. The old penalties, which I quoted, have been
in place for a long time. So long, in fact, that I didn't bother to see if they
had changed. All the more reason for every club to file a return, regardless of
your income/expense and regardless if you think you have been grandfathered in
not to file. If you think that, you are wrong.
Rip West Saint Paul, MN Our club has been using bivio since its inception, I believe. Before that we used the IClub/BI Accounting program. This year, I went through and filled in the tax questionaire for our tax return and submitted it to our CPA (Also a partner) that does our tax returns. She found several discrepancies in the Bivio return as compared to the return that she prepared. All in all, it amounts to a difference of about $175. Is this enough to try to reconcile her differences in the Bivio return, or would we be safe in using the Bivio numbers. Bivio always balances with our brokerage account and our bank account. Henri Russell Henri,
I'd suggest that you turn over the CPA's prepared return and comments to
bivio, and have them look at it. I'm sure that if there are problems with the
bivio return they want to know about it. I'm also sure that if the CPA is
mistaken [a lot of us are, <g>], they would like to get that clarified on
this list, also.
Rip West Saint Paul, MN Without knowing the specific differences, it's hard to make a recommendation. However, the tax software created by bivio (and ICLUB) is designed with investment clubs in mind. The professional partnership software used by most CPAs doesn't prepare an accurate investment club return because each item of income and expense during the year is allocated differently, based on the ownership shares on that date.
Professional partnership tax software is designed for partnerships where the ownership shares are stable, or change no more than once or twice during the year. Anything more than that and the CPA must manually override each calculated amount.
Ira Smilovitz
In a message dated 02/07/09 15:23:21 Eastern Standard Time, henriz@bivio.com writes:
You guys are so smart! The treasurer's list is infinitely more interesting to read this time of year than any other board! <G>
Lynn O. You should send email to support(at)bivio.com with the details about what's different and someone there will look into it. > This year, I went through and filled in the tax questionaire for our tax > return and submitted it to our CPA (Also a partner) that does our tax > returns. She found several discrepancies in the Bivio return as compared > to the return that she prepared. < > All in all, it amounts to a difference of about $175. Is this enough to > try to reconcile her differences in the Bivio return, or would we be safe > in using the Bivio numbers. < > Bivio always balances with our brokerage account and our bank account. < As soon as I get all the final numbers from the CPA and can make note of the various differences, I will definitely send it to support 2 Bivio and have them look at it. Thanks for all the replies. Y'all just confirmed my thoughts completely. And we do have an audit by other members that check all the numbers in and out. I insist on that since I am the treasurer. I want to make sure it is right!! I just always felt that when the CPA balanced with all my numbers too, that was an additional check. You should send email to support(at)bivio.com with the details about what's different and someone there will look into it. |
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