- quote -

First of all, I would like to thank the previous repondents
for their input -- you brought up the consolidated SEconcept
that I was heretofore unaware of.

Now....if I may, I would like to add a wrinkle to the
equation

The real estate business is 100% hers.
The legal practice is 100% mine.

Now, we live in a community property state. So the question
raised is the "ownership" of the two LLCs. I've always
treated them as single-member LLC, with myself being the
sole member. But the real fact is that community property
funds have gone into the businesses.

Now the leasing business -- that's probably 100% mine b/c
she isn't really that involved in it. However, with the
restaurant, she is very involved in the day to day
operations (probably more so than me).

So, could I say for tax purposes that she is the sole member
of the LLC that operates the restaurant (in which case, if a
consolidated SE is filed for her , the loss from the
restaurant offsets any real estate income -- and therefore,
she will not owe any SE taxes)?

I'm not as worried about my SE taxes because I receive in
excess of $87000 in regular wages from my job, so I will
only have to pay the 3% medicare tax on SE income --
assuming that there is even a net income to tax, which there
may not even be because the leasing company losses will
probably offset the law office income.

Thanks again in advance.

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MTW wrote:
- quote -

But especially accountants after August 15th! (grin

Just don't call me till after September 9th when we return
from three weeks in Scotland (studying the UK VAT and income
tax system OF COURSE!).

ChEAr$,
Harlan Lunsford

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"The Avatar" <theavatar007[at]hotmail.com> wrote:

- quote -

There is no such thing as a consolidated Schedule C. NOTE,
see next item.

- quote -

Essentially, you get to file a consolidated Schedule SE.
This will aggregate all of your income, from wages and the
LLCs, and calculate your self employment tax on the net
effect of all of your activities. Your wife will do the
same. You must keep her's and yours separate, you cannot
comingle or consolidate amount different taxpayers.

- quote -

Hope this helps,
Gene E. Utterback, EA

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- quote -

Well, I do advise talking to a CPA. I am very quick in
returning phone calls, and emails.

What I will say is this, all schedule Cs on a 1040 are
lumped together when the Scedule SE is prepared. therefore,
if you have 3 Sched Cs, they will be totalled together for
SE tax purposes. Same thing goes for your wife.

The other questions are rather complicated and and need a
phone conversation or face to face meeting.

Bruce Raskin, CPA
braskincpa[at]aol.com
Small Business and Individual Tax and Accouting Services

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The Avatar <theavatar007[at]hotmail.com> writes:

- quote -

**********NO!! Each business (entity) files a separate
return. If the restaurant business is showing a loss, and
you are partners with your spouse, you would each deduct
your share of the loss based on the partnership agreement
covering profit & loss sharing. The loss would be applied to
your other income subject to SE taxes and will offset your
wife's self-employment to the extent your agreement allows.
If it's 50/50 - so be it!!!=

- quote -

***As stated above, it relies on your partnership agreement
(if one exists) for the restaurant business.

- quote -

***You're Welcome!!!=

"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

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The Avatar wrote:

- quote -

Lots of people (not just accountants) are on vacation this
time of year. It is difficult to accomplish anything in any
field. May I suggest that you try again after Labor Day.

MTW

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Dear All--

Here is the situation -- in addition to having a job where I
receive wages (in excess of $87000 for this discussion), I
own several businesses, and was wondering what my tax
situation currently is: One business is a single-member LLC
which owns a restaurant (and will report a LARGE net loss by
years end) One business is a single-member LLC which
owns a leasing business (and will post a small loss or
possibly a small gain) One business is my own sole
proprietorship legal practice (and which will post a small
gain)

One business is my SPOUSE's sole proprietorship real estate
agent business (and which will post a solid gain).

This will be the first year with the legal practice and real
estate practices. The LLC businesses were both losses last
year so I didn't have to face this issue then. I filed
separate Schedule Cs for each business (I also filed them
all myself -- I have a business background with some tax and
accounting, so I know how to do a lot of this stuff, but
now things are getting a little more complex).

Now that the legal practice and real estate agent business
will be making some money, I have to deal with the issue of
self-employment taxes. However, in my mind, it doesn't seem
fair that we should have to pay any kind of taxes on the
income from the legal practice and real estate practices
when we are sustaining such large losses from the
restaurant and leasing business. If we consolidated all of
the businesses, the restaurant losses were offset any and
all gains from the other businesses.

I know that I won't have to pay the 12% SS on the legal
practice income because my WAGES are in excess of $87000;
however, my SPOUSE does not have any other wages and
therefore would have to pay this SE taxes.

So my questions are:
Question #1: Can I file a "consolidated" Schedule C which
lumps together all of the business income and expenses into
one Schedule C? Will this be a red flag to the IRS since I
separated them in the past?

Question #2: Given my situation, what can I do in the
situation to minimize the amount of SE taxes paid on that
income from the two profitable businesses?

And I know that you will probably advise me to talk to a CPA
.. . .well, I am trying to set up appts, but they are not
very good at returning their phone calls. Until such time,
I would like to hear from the experienced and knowledgeable
masses reading this message -- it will give me food for
thought and possibly raise other issues -- all of which I
can then go over with a CPA when the time comes.

Thanks in advance for the advice.

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