On Apr 8, 11:12*am, c <smalltalkingchic...[at]gmail.com> wrote:
- quote -


Oops, I was dutifully editing out the underbrush and managed to push
the "send" button by mistake. Maybe Dick will see the blank post and
delete it. Someday <G> .

The money you spent sounds like organization costs. The LLC can elect
to amortize those costs over 60 months, on a timely filed return. I
believe the election has to be made at the entity level, although I'm
not certain of that. If the election is not made, those costs will
never be deductible until the LLC is dissolved.

The money your associate spent sounds as though it was partly for
equipment and partly for services. The equipment is a capital asset
of the LLC and must be capitalized and depreciated, beginning at the
point when it is placed in service, i.e., when business commences.
The services are probably start-up costs, which you may be able to
deduct currently.

The LLC must file a partnership return (Form 1065) and give each of
you a Schedule K-1 that will tell you what expenses, if any, are
passed through as currently deductible losses. You have to divide all
of these items up in accordance with the LLC's operating agreement,
not in accordance with who paid what.

I would suggest that you and your associate hire his accountant to
handle this for you, since he or she is already familiar with the
facts. He or she can also advise you on how to handle all of these
matters if it is the case that the LLC is not now intended ever to
engage in any business activities. You can't do this by yourself.

Katie in San Diego

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On Apr 8, 11:12*am, c <smalltalkingchic...[at]gmail.com> wrote:
- quote -

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On Apr 8, 11:13*am, "Gil Faver" <rowdy'sb...[at]xxyz.com> wrote:
- quote -


The California minimum tax rules are different for corporations than
for LLCs, LLPs and LPs. A corporation is not subject to the $800
minimum tax for its first taxable year of existence (which in some
cases is a short year).

An LLC, LLP, LP, QSUB, REIT, RIC, REMIC, FASIT, etc. is subject to the
$800 minimum tax from the beginning.

See CRTC Sec. 23153(f), effective for corporations organized on or
after January 1, 2000.

Katie in San Diego

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CA for example has a
- quote -

I am not aware of an exception for the first year or two for CA LLCs. Any
further thoughts on this?

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On Apr 8, 12:56 pm, "removeps-gro...[at]yahoo.com" <removeps-
gro...[at]yahoo.com> wrote:
- quote -

actually it was an LLC, and i understood that we could count the LLC
as a passthrough entity for tax purposes

- quote -

alright, will look into that


responding to you other post:
- quote -

he spent that cash, probably $1k, on computer equipment/services that
is not used for personal use (ever)

he actually just called me and said his accountant told him that since
we aren't actually in business (yet?), the money he spent counts as an
investment and not an expense, and thus is not deductible?

this is getting more and more confusing

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On Apr 8, 8:15 am, c <smalltalkingchic...[at]gmail.com> wrote:

- quote -

One more thing. That 1k may also be deductible. If you used it to
pay for meals, then that might raise eyebrows. What kind of stuff was
it? If it was supplies that you now use for personal use (like
stamps, plain stationary) then no deduction. And fees you pay an
accountant to do your 1120* would also be deductible.

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On Apr 8, 8:15 am, c <smalltalkingchic...[at]gmail.com> wrote:

- quote -

You formed a corporation or LLC, right? In that case, the corporation
should file a form 1120 (C Corp) or 1120-S (S Corp). An S corp would
issue a Schedule K1 to each of the shareholders. If each of you owned
50% of the company, each of you would have a loss of 425/2=212.50.
Since you are active participants, the loss would go on Schedule E and
line 17. Schedule C is for sole proprietorships (so hard to spell
that word!).

- quote -

Not for federal. But state may have income. CA for example has a
minimum tax of $800 except for the first year (maybe first 2 years,
but I'll have to check on that). Check with NY. Maybe someone else
will write.

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On Apr 8, 11:15 am, c <smalltalkingchic...[at]gmail.com> wrote:
- quote -

also - i just found a piece of paper from the irs saying i have to
file a 1065 by june, though a 941 is due by april 30 (quarterly
return)

and one other thing ... i never sent in the affidavits i paid for from
the newspapers ...

this might sound like a legal question instead of a tax one, but: if
i'm required to submit those affidavits in order to have a duly-formed
LLC, and i don't, then do i not have an LLC, such that if i don't send
in those affidavits i can forget the whole thing? not be the owner of
a derelict LLC and not have to fill out any forms and not have to pay
any taxes on a company that doesn't exist?

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hi all,

i paid $425 to file articles with my state (NY) and to have formation
notification published in local papers (as is required in NY) in order
to form a company that i never got around to doing anything with, and
as such, i have $0 income and only that $425 in losses to speak of

i elected passthrough taxation ... i have a business partner and i
understand any losses/profits we have must be reported on our
individual returns

my partner bought some things for the business that never was and
maybe spent $1000, but he's hiring an accountant to do his taxes so
that's a whole other situation; i just wanted to ask a few questions
about my own situation

if i file a 1040, as i understand it, i'll need to include a negative
$425 on line 12, based on listing those "expenses" (sorry to use that
word if it means something else at times in this context) on schedule
C, yes?


is that all i need to do for my personal return? do i need to include
a 1065?

what do i need to file for the company itself, if anything?

will there be taxes due even though we had no income?



thanks much!

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >