Hi,
After the tax season, we start to work on amendments
.
One of the returns we prepared was a S corp. After my preparation, about $76,000 loss flow to the K-1. However, when I did the individual return, the senior accountant sent back the return to me, commented that there was not enough basis, all the $76,000 loss was disallowed. So I did her way.
After we send the return to the client, she pointed out that she had a basis in the corp since she lended that much to the corp in 05. That was what I thought too. But the senior accountant insisted that if our client took that loss now when the client close the corp she is going to have a gain, but I believe it would be no gain or loss. I have encountered several situations like that with our senior accountant and I was always very bothered.
Anyway, our boss decided to take the loss. After the client received all refunds, she requested that we carry the loss to 2003, was about $12,000 loss remainning. In 03, her tax liability was about $2,000. In 06, her AGI would be $60,000 (her husband's wage's income).
We discovered that some one made the election for the client forgo NOL loss carryback (not sure why and how this happened). I checked with the IRS that once the election is made it is irrevocable.
My question is, have your guys tried to file an amendment with the IRS and carry back the loss. My client has made many calls before and yesterday after we told her that we couldn't carry back she has remained silence. I am wondering if she is looking for a lawyer to sue us.
Thank you very much.
After the tax season, we start to work on amendments
.One of the returns we prepared was a S corp. After my preparation, about $76,000 loss flow to the K-1. However, when I did the individual return, the senior accountant sent back the return to me, commented that there was not enough basis, all the $76,000 loss was disallowed. So I did her way.
After we send the return to the client, she pointed out that she had a basis in the corp since she lended that much to the corp in 05. That was what I thought too. But the senior accountant insisted that if our client took that loss now when the client close the corp she is going to have a gain, but I believe it would be no gain or loss. I have encountered several situations like that with our senior accountant and I was always very bothered.
Anyway, our boss decided to take the loss. After the client received all refunds, she requested that we carry the loss to 2003, was about $12,000 loss remainning. In 03, her tax liability was about $2,000. In 06, her AGI would be $60,000 (her husband's wage's income).
We discovered that some one made the election for the client forgo NOL loss carryback (not sure why and how this happened). I checked with the IRS that once the election is made it is irrevocable.
My question is, have your guys tried to file an amendment with the IRS and carry back the loss. My client has made many calls before and yesterday after we told her that we couldn't carry back she has remained silence. I am wondering if she is looking for a lawyer to sue us.
Thank you very much.
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