Fed Tax Flowchart Forum

[Big Shrimpin]

I don't have IT until next Wednesday and I've got multiple finals between now and then, soooo if anyone puts together a good flow chart/attack outline/etc. before then and wants to share I will buy you booze the next time you are in Texas.

i have tax on the 23rd...am doing pre written answers and all kinds of bells and whistles...if you want to trust me, i will send it over to you when im done. you cant steal my grade all the way from texas.

Dude I have tax on thurs...how many 'dem prewritten answers you done finished? Will FedEx hugs and chocolates

[BunkMoreland]

why oh why cant i understand non-recognition rules for like kind exchanges!!! i swear i understood it in class!!!!!

i dnt understand the analysis for basis when there is boot!

omgggggg tax I HATE YOU SO MUCHHHHHH!!!!!!!!!!!!!!!!!!!!!!!!!! damn you for making the world go round and forcing me to [attempt to] understand you

::cries in a corner::
its 4 credits!!!!!!!!!!!

Did you try doing the E&E section on like-kind exchanges? It made things a lot clearer for me.

doing it right now...was reading it and my brain literally felt like mush when I posted the above. ugh, freakin tax.

Do you need any help? What about it are you struggling with?

[Rotor]

One tip straight from the mouth of my prof: Use the glossary from the back of the code if you're just trying to find a code citation in your essay(s). Alphabetical order makes it a much more manageable cheat-sheet than a topically-organized outline.

Of course, you have to know the name of what you're looking for, but it was such a simple solution. Too bad the test won't be so simple.

Edit: clarity.

[goosey]

I don't have IT until next Wednesday and I've got multiple finals between now and then, soooo if anyone puts together a good flow chart/attack outline/etc. before then and wants to share I will buy you booze the next time you are in Texas.

i have tax on the 23rd...am doing pre written answers and all kinds of bells and whistles...if you want to trust me, i will send it over to you when im done. you cant steal my grade all the way from texas.

Dude I have tax on thurs...how many 'dem prewritten answers you done finished? Will FedEx hugs and chocolates

what school do you go to?
im no 1L, but i still have a scholarship stip to meet

[goosey]

why oh why cant i understand non-recognition rules for like kind exchanges!!! i swear i understood it in class!!!!!

i dnt understand the analysis for basis when there is boot!

omgggggg tax I HATE YOU SO MUCHHHHHH!!!!!!!!!!!!!!!!!!!!!!!!!! damn you for making the world go round and forcing me to [attempt to] understand you

::cries in a corner::
its 4 credits!!!!!!!!!!!

Did you try doing the E&E section on like-kind exchanges? It made things a lot clearer for me.

doing it right now...was reading it and my brain literally felt like mush when I posted the above. ugh, freakin tax.

Do you need any help? What about it are you struggling with?

i just dont understand how you calculate the new basis in the property when there is boot. Also, how come we bifurcate the transaction when there is property as boot or stocks but NOT when its money...in the code, money=boot too

[moandersen]

anyone feel like explaining the tax consequences and calculations for recourse and non-recourse debt? My outline makes no sense.

[Big Shrimpin]

I don't have IT until next Wednesday and I've got multiple finals between now and then, soooo if anyone puts together a good flow chart/attack outline/etc. before then and wants to share I will buy you booze the next time you are in Texas.

i have tax on the 23rd...am doing pre written answers and all kinds of bells and whistles...if you want to trust me, i will send it over to you when im done. you cant steal my grade all the way from texas.

Dude I have tax on thurs...how many 'dem prewritten answers you done finished? Will FedEx hugs and chocolates

what school do you go to?
im no 1L, but i still have a scholarship stip to meet

geedubya

if not, nbd dooder

[goosey]

what school do you go to?
im no 1L, but i still have a scholarship stip to meet

geedubya

if not, nbd dooder

haha ok we go to dif schools...make sure you double check my crap...and dont blame me if you get a C

My exam is on the 23rd but I will prob have my pre-writes done by Tuesday---if not I will send you whatever I have. should be mostly finished by then anyway

[de5igual]

Exam in an hour

[BunkMoreland]

i just dont understand how you calculate the new basis in the property when there is boot. Also, how come we bifurcate the transaction when there is property as boot or stocks but NOT when its money...in the code, money=boot too

Here's from my outline on this topic:

CALCULATING THE BASIS OF PROPERTY IN A LIKE KIND EXCHANGE
Rule:
Formula: Gain Recognized = Minimum (Gain Realized, Fair Value of Boot Received)
Formula for Calculating Basis: Unrealized Gain immediately prior to the Exchange = Gain Recognized + Unrealized Gain immediately after the Exchange

Example: Suppose I swap a cow pasture with a basis of 10 and a fair value of 100 for 40 of cash and a warehouse with a fair value of 60. Assuming proper motives (i.e., productive use in a trade or business or investment), the cow pasture and the warehouse are of like kind. Thus, my recognized gain is the lesser of (1) my realized gain and (2) the value of boot received. From IRC § 1001, it follows that my realized gain is 90 (40 of cash and 60 for property = 100 minus basis of 10 = 90). The boot received is 40 (i.e., the cash). Thus, my recognized gain is the lesser amount, 40.

Then, using the equation above:
• Prior unrealized gain in warehouse (100-10 =90) = gain recognized (40) + unrealized gain after exchange (X) <--this has to be 50 because of algebra.

• However, there can't be any "unrealized gain" in cash because it's cash, so the 50 has to all be in the warehouse. Therefore, since the fair value of the warehouse is 60, you subtract the entire 50 of unrealized gain, and get a tax basis in the new warehouse of 10. Get it?

[dibs]

anyone feel like explaining the tax consequences and calculations for recourse and non-recourse debt? My outline makes no sense.

let me open my tax outline that i have lovingly named "FUCK YOU TAX.pdf":

yep, still don't understand. i think, basically, that when an asset is sold any balance of non-recourse debt is included in the amount realized (Crane v. Commissioner). and the amount of non-recourse liability is to be included in calculating both adjusted basis and the amount realized on sale (Commissioner v. Tufts). i think the point is that people can't avoid paying tax on gains from investments they take on without personal liability.

but fuck tax, so i don't know for sure.

[goosey]

anyone feel like explaining the tax consequences and calculations for recourse and non-recourse debt? My outline makes no sense.

let me open my tax outline that i have lovingly named "FUCK YOU TAX.pdf":

yep, still don't understand. i think, basically, that when an asset is sold any balance of non-recourse debt is included in the amount realized (Crane v. Commissioner). and the amount of non-recourse liability is to be included in calculating both adjusted basis and the amount realized on sale (Commissioner v. Tufts). i think the point is that people can't avoid paying tax on gains from investments they take on without personal liability.

but fuck tax, so i don't know for sure.

also...because the actual price is used to calculate depreciation, the tp could take massive depreciation deductions without having any liability whatsoever for the loan. so basically, since we include it in the depreciation calc, we include it in the amount realized


also, buckmoreland: thanks!! i will work through this tonight and see if it helped any

[gp86]

also...because the actual price is used to calculate depreciation, the tp could take massive depreciation deductions without having any liability whatsoever for the loan. so basically, since we include it in the depreciation calc, we include it in the amount realized

Right. A good way to think about it is that your "phantom gains" should match the depreciation you got off the debt.

[de5igual]

this monstrosity is over. thank god.

[fathergoose]

this monstrosity is over. thank god.

How was it?

[scottschreiber]

Sorry for the disappearance, it's my last final so I've been putting off studying for Fed Tax as long as possible. I have my Excel spreadsheet with all the sections my professor assigned. PM me if you want me to send it to you. It's not that great, just a general overview of some things and way too in detail on other things, but it may help get things organized by section.

[scottschreiber]

My professor posted an old exam of his. He asks 8 "short" essay questions, with the instruction to describe any tax implication for any party. I'll post one of eight, hopefully people can present some ideas on what they think would be a good answer, and then I'll post more if people are interested and there's some response.

Larry Landlord owns an office building with three tenants.

Each tenant has a lease with five (5) years to run. Larry established a partnership with his three children as his equal partners. Larry's children are ages 10, 15 and 18. Larry transferred the office building to the family partnership and got nothing in return from his children. The eighteen (18) year old signed the partnership agreement. Larry signed the partnership agreement on behalf of his two younger children. The agreement, drafted by Larry's lawyers, indicates that Larry makes all decisions for and, by himself, manages the business of the partnership.

Three months after the formation of the family partnership and the transfer of the building to the partnership, one of the . tenants in the building (the law firm of Bore, Gush and Lieberman) announced that it was breaking its lease. Larry, on behalf of the partnership, negotiated a deal under which the partnership received a single lump sum of $100,000 "in exchange for releasing Bore, Gush and Lieberman of all its obligations under the lease."

On behalf of the partnership, Larry had the partnership donate $10,000 to the county "for such public purposes as the county sees fit." Two weeks later, the county installed new sewers for the office building, something Larry had been requesting for some time.
A new tenant wanted the space vacated by Bore, Gush and Lieberman but only if it could have that space plus the adjoining space occupied by another tenant, Nathaniel Corp. To induce Nathaniel Corp. to leave, the partnership paid Nathaniel Corp. $40,000 in return for Nathaniel Corp. terminating all of its rights as a tenant under its lease. The new tenant then rented both the old Bore, Gush and Lieberman space and the space previously occupied by Nathaniel Corp.

[de5igual]

this monstrosity is over. thank god.

How was it?

could've been worse; could've been better. at this point, just glad that i don't ever have to deal with this shit again

[deebs]

The past two days have only made it more confusing. If I had access to my exam (tomorrow @ 9) now, I still wouldn't get above median if I pulled an all night and the rest of my classmates only had the allotted time.

[quadsixm]

The past two days have only made it more confusing. If I had access to my exam (tomorrow @ 9) now, I still wouldn't get above median if I pulled an all night and the rest of my classmates only had the allotted time.

+1

[Big Shrimpin]

The past two days have only made it more confusing. If I had access to my exam (tomorrow @ 9) now, I still wouldn't get above median if I pulled an all night and the rest of my classmates only had the allotted time.

I thought I knew this shit so well. Took my professor's pts from the last two years and aced them. Got into the exam yesterday and saw shit on the exam we didn't even do in class this year. It would be an understatement to say I failed. Fck this class, but more importantly, professors who write awful, surprising exams. As a 3L, this is the first time ive had a professor that has pulled more than a few fast ones on an exam, so I guess I'm lucky in that sense.

[crEEp]

I thought I knew this shit so well. Took my professor's pts from the last two years and aced them. Got into the exam yesterday and saw shit on the exam we didn't even do in class this year. It would be an understatement to say I failed. Fck this class, but more importantly, professors who write awful, surprising exams. As a 3L, this is the first time ive had a professor that has pulled more than a few fast ones on an exam, so I guess I'm lucky in that sense.

You and me both... I'm absolutely convinced that I failed my exam, but I should have enough cushion credits to protect graduation. The tax code sincerely needs to be put out of its misery.

[BunkMoreland]

finally done with this TTT class. Exam was hard as balls, had to guess openly on several questions. Luckily, everyone I talked to did as well. Why make a test so hard literally no one can get through it in time?

[Big Shrimpin]

finally done with this TTT class. Exam was hard as balls, had to guess openly on several questions. Luckily, everyone I talked to did as well. Why make a test so hard literally no one can get through it in time?

Best part about my test was how poorly the fact pattern was written. The questions based upon the fact patter basically asked us not only to analyze issues that did not appear in the facts, but to in effect launch into a full-blown issue-fishing expedition.

Now, I understand that part of a well-analyzed fact pattern/well-written exam is the student's ability to read between the lines and ferret-out "what's not there." But jesuschrist, when the fact pattern is an emaciated skeleton of facts, how the fck can you expect to read well-written essays? Taking a street-sweeper to a fact pattern is okay if it's full of juicy issues, but shooting in the dark is scary as fck.

Fck tax, /rant

[Renzo]

finally done with this TTT class. Exam was hard as balls, had to guess openly on several questions. Luckily, everyone I talked to did as well. Why make a test so hard literally no one can get through it in time?

That's the best kind of test, because you know the grading isn't' going to be arbitrary. Nothing pisses me off more than an easy test, where you know that the difference between an A and a B- is going to be three typos.