In article <ce932dd2-995e-45c4-8473-3035245b9d32[at]m44g2000hsc.googlegroups.com> ,
rick++ <rick303[at]hotmail.com> wrote:
- quote -

That's not the general case, and it doesn't lower taxes by anywhere
near that much (it's short-term gains, taxed like earned income except
for Medicare).

It's actually the investment fund managers (venture capital) who try
that trick, claiming their cut is long-term capital gains.

Seth

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This is similar to the debate facing hedge fund managers.
They claim because the underlying business is investing,
their percentage of the gains (typical 20%) is really investment
income ratehr than earned income and should be taxedas such.
That lowers taxes by half.

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Harlan Lunsford <hnslunsford[at]bellsouth.net> wrote:
- quote -

No, tinyurl is not associated with the NY Times - it's an independent
website that allows you to take long url's and shorten them. That
particular one is to the IRS website:
http://www.irs.gov/faqs/faq12-1.html

Stu

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cpabakem01[at]yahoo.com wrote:
- quote -

a link to the NOo Yawk Times. So guess I'll pass.

ChEAr$,
Harlan Lunsford, EA n LA

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<cpabakem01[at]yahoo.com> wrote in message
news:6330dfc9-f61d-416b-87c2-ceb0ab383ae8[at]m3g2000hsc.googlegroups.com...
- quote -

The wife is not a limited partner. According to the LLC's articles of
organization she can contract on behalf of the LLC and has the same rights
as the husband.






- quote -

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On Apr 22, 9:44*pm, "Haskel LaPort" <QBFan...[at]gmail.com> wrote:
- quote -

Generally, members of LLCs filing Partnership Returns pay self-
employment tax on their share of partnership earnings.
There is a special rule for members who are the equivalent of limited
partners. They pay self-employment tax only if the LLC pays them for
services (guaranteed payments)

More: http://tinyurl.com/3atuy7

Milt Baker CPA

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On Fri, 25 Apr 2008 11:26:19 EDT,
"removeps-groups[at]yahoo.com" <removeps-groups[at]yahoo.comwrote:

- quote -

According to the OP the LLC is a tax partnership so neither
husband nor wife should get a salary. Not allowed under the
law. Allowing partners to be put on payroll is actually on
the Taxpayer Advocates list of things that should be
changed.

--
Drew Edmundson, CPA
Cary, NC

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On Fri, 25 Apr 2008 12:22:26 EDT,
"removeps-groups[at]yahoo.com" <removeps-groups[at]yahoo.comwrote:

- quote -

Yes that page includes 704(e). Sometimes a husband and wife
partnership is not recognized for tax purposes. Typically
with a service partnership where one spouse is not involved
in the business. It appears to me the OP is a tax
professional so I assumed he/she could handle the Code and
would come back if it wasn't clear.

- quote -

That isn't the proposed regulation. It is the existing
regulation. The proposed regulation is here:

http://www.legalbitstream.com/script.../irl4f8f/1/doc

- quote -

Huh? There is no such thing as an LLC partner, they are all
members. I am not coming to any conclusion just replying
with the only available semi-official statement on the
matter. The proposed regulation, not effective until
finalized, says that an LLC member or limited partner that
meets the rule is recognized as a limited partner for
purposes of the exclusion from SE tax under 1402(a)(13).

- quote -

An LLC taxed as an S Corporation falls under the S
Corporation rules not under the limited partnership rules.
This is a whole other issue.

--
Drew Edmundson, CPA
Cary, NC

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On Apr 23, 12:24 pm, Drew Edmundson <drewsbeag...[at]hotmail.com> wrote:

- quote -

Are you talking of

http://www.taxalmanac.org/index.php/...ributive_share

That's some pretty dense reading.

- quote -

http://ecfr.gpoaccess.gov/cgi/t/text....0.1.4&idno=26

So are you saying that an LLC member has to pay SE tax, but an LLC
partner does not?

What of an LLC that elects to be taxed as an S Corp?

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On Apr 24, 12:28 pm, Harlan Lunsford <hnslunsf...[at]bellsouth.netwrote:
- quote -

No, I did not say that each should get an equal salary because of
equal ownership. Read again; I said that the husband should get all
the salary, whether it is 50k, 80k, etc. This is because he did all
the work. The husband and wife should get part of whatever's left
over, if anything, in the form of dividends or distrubutions. If the
LLC is taxed as an S Corp, then dividends are divided based on the
percent shares you own; so each gets 50% of the distributions as each
owns 50% of the company. If the LLC is taxed as another entity, even
the distributions can be different for each party -- C Corps let you
have different classes of shares. In any case, all this divisions of
distributions doesn't matter if you file jointly.

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"Bill Brown" <brownwp[at]longwood.edu> wrote in message
news:12a031ae-bfa0-4967-8fde-9b4327161fb8[at]m44g2000hsc.googlegroups.com...
- quote -

Yes, but it's ALREADY a partnership, so what would recasting it as an LLC
gain for tax purposes? I see none.

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"Harlan Lunsford" <hnslunsford[at]bellsouth.net> wrote in message
news:O85Qj.20554$3v1.14191[at]bignews3.bellsouth.net...
- quote -

Well, the title of the thread makes it clear that the ONLY consideration was
tax avoidance, but I don't see that at all....

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"Drew Edmundson" <drewsbeagles[at]hotmail.com> wrote in message
news:66d11499i0odmmqf5jcb9c48kt8a2me66q[at]4ax.com...
- quote -

Both the taxpayer's accountant and myself agree that this is a parnership. I
am of the belief that the wife should not have been made a member of the LLC
in the first place. The attorney could have found other means of protecting
the wife's interests beside making her a member of the LLC. (Mortgage on
home used to finance purchase of business).

When I first found out that a two member LLC was formed my concern was that
when the annual profit climbs to 200,000 (Which it will) both the husband
and wife would have to pay the maximum amount of self-employment taxes on
the profit. This future event would certainly shed light on why forming a
two member LLC was a bad idea.





- quote -







- quote -

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removeps-groups[at]yahoo.com wrote:
- quote -

Each should get equal salary just because they are equal owners? I
would never recommend such to a client. Equal pay for equal work, yes;
but not proportionately according to ownership. Whatever is left over,
profits, is so apportioned.

ChEAr$,
Harlan Lunsford, EA n LA

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D. Stussy asked:
- quote -


I know that sometimes we in the business think only in terms of tax
implications and perhaps lose sight of more valuable legal reasons.

ChEAr$,
Harlan Lunsford, EA n LA

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On Wed, 23 Apr 2008 17:14:23 EDT, "Haskel LaPort"
<QBFanBoy[at]gmail.com> wrote:

- quote -

I would agree that it is unlikely that the IRS will disagree
with the proposed regulations but we don't know for sure.
Obviously Congress disagreed or they wouldn't have told IRS
to put them on hold for a time certain (I don't recall how
long the hold was but it expired a long time ago).

- quote -

Did you resolve issue 1? What was your conclusion?

If you decided the LLC was a partnership for tax purposes
then based on your additional information that she is able
to contract on behalf of the LLC she would be subject to SE
tax under the proposed regulation.

Some argue since the proposed regulation is not effective
until finalized and Congress expressed its displeasure about
the proposed regulation then the definition of a limited
partner for SE purposes is open to interpretation. They
then conclude that a reasonable interpretation is that an
LLC member is enough like a limited partner that they
qualify for the SE exclusion. There are large law firms all
over the US paying their LLP/LLC members guaranteed payments
for a portion of their income and then making the balance
not subject to SE tax. I would be shocked if some large
accounting, engineering, architectural, etc. firms aren't
doing the same thing.

--
Drew Edmundson, CPA
Cary, NC

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On Apr 22, 6:44 pm, "Haskel LaPort" <QBFan...[at]gmail.com> wrote:

- quote -

Here's my guess: What is the FMV salary for the husband? If it is
60k or more, then I think all of the 60k should go to him as salary,
and he's have SS and Medicare on all of it. If the FMV salary is 50k,
then he should get 50k as salary, and the remaining 10k should be
distributions. If the LLC is taxed as an S Corp, then both husband
and wife should get 5k as they each have 50% of the shares. But
anyway, hope someone else knows better than me.

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On Apr 24, 12:49*am, "D. Stussy" <s...[at]bde-arc.ampr.org> wrote:

- quote -

tax purposes. 2 or more member LLCs default to partnership treatment.

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"Haskel LaPort" <QBFanBoy[at]gmail.com> wrote in message
news:480e3c11$0$25058$607ed4bc[at]cv.net...
- quote -

Why would the formation of an LLC do anything? It is a disregarded entity
for federal taxation purposes.

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Haskel LaPort wrote:


- quote -

What regulation? Are you speaking of an IRS attempt to give guidance as
to what does or does not constitute SE income for those LLC members who
are deemed partners?

Actually I sure wish they would do so. But so far IRS is in denial
regarding the tax consequences of LLC's.
Or so it would seem (grin)

ChEAr$,
Harlan Lunsford, EA n LA

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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. > << ------------------------------------------------------- >