I will make this short, there is too much personal drama involved for all the gory details....
Client owns a vacation home in Bahamas. He has used it for Rental and for some personal.
Last year, his best friend gave him $100,000 and joined him in ownership.
My client calls and it goes like this, "Joe gave me $100,000 for half of the Bahama house. But there is no capital gains, you know? Like, I just put him in my will, so if I die, he gets half of the house. It isn't really a sale, just an agreement. So I don't have to claim the $100,000. Do you think the IRS will notice? Oh, and I'm only going to claim half the expenses this year, to stay low on the radar screen, you know?"
I said something like, "Well, there might not be capital gains like YOU think of capital gains, but the IRS says when you sell business property, you must recapture the depreciation taken, and you will have a gain. If you are partners now, I need to send your return out. I do not do partnership returns. If you want to stay low on the radar, or if you think you do not need to claim the $100,000 paid to you, I have an accountant for you. He cheats and knows all the loopholes. Not that you want to cheat..............."
I swear that's what I said.
I know that a partnership return isn't mandatory, that they can file as individuals and split the income and expenses in half on each return. I just really don't want the return.
Client owns a vacation home in Bahamas. He has used it for Rental and for some personal.
Last year, his best friend gave him $100,000 and joined him in ownership.
My client calls and it goes like this, "Joe gave me $100,000 for half of the Bahama house. But there is no capital gains, you know? Like, I just put him in my will, so if I die, he gets half of the house. It isn't really a sale, just an agreement. So I don't have to claim the $100,000. Do you think the IRS will notice? Oh, and I'm only going to claim half the expenses this year, to stay low on the radar screen, you know?"
I said something like, "Well, there might not be capital gains like YOU think of capital gains, but the IRS says when you sell business property, you must recapture the depreciation taken, and you will have a gain. If you are partners now, I need to send your return out. I do not do partnership returns. If you want to stay low on the radar, or if you think you do not need to claim the $100,000 paid to you, I have an accountant for you. He cheats and knows all the loopholes. Not that you want to cheat..............."
I swear that's what I said.
I know that a partnership return isn't mandatory, that they can file as individuals and split the income and expenses in half on each return. I just really don't want the return.
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