Topic Thread

DILEMMA WITH FLOW-THRU K-1 WITH FRAUDULENT ASSET

  • 1.  DILEMMA WITH FLOW-THRU K-1 WITH FRAUDULENT ASSET

    Posted 06-08-2018 14:25
    A NEW INDIVIDUAL CLIENT TO ME HAS OWNERSHIP IN A "RENTAL PROP LLC", AS A MGRM (CLIENT IS NOT A REAL ESTATE PROFESSIONAL).  THE LLC K-1 (TAXED AS PARTNERSHIP) HE RECEIVED SHOWED "LINE 1 ORDINARY LOSS OF
    $ 3,112,005", AND LINE 14A LOSS OF SAME AMOUNT FOR HIS 90% MEMBERSHIP.  THERE WAS NOTHING ON LINE 2.

    OF COURSE MY FORENSIC ANTENNA WENT UP, SINCE I HAVE SEEN IN THE PAST 42 YEARS MANY
    WRONGLY-PREPARED PARTNERSHIP K-1'S AND TAX RETURNS.    MY FINDINGS WERE:
    1) THIS LLC REALTY PROPER WAS A VERY FAMOUS SKYSCRAPER IN NYC
    2) THE LOSS OF 3,112,005 WAS FROM "RENTAL REAL ESTATE ACTIVITY FULLY"
    3) THE PROPERTY DEPRECIATION AND MORTGAGE INTEREST WAS ON SUCH PROPERTY BY CITIBANK
          BUT THE MORTGAGE SECURITY WAS THIS PROPERTY HOWEVER THE MORTGAGOR WAS MY
          CLIENT DIRECTLY AS AN INDIVIDUAL.

    SO, I FOUND THAT A NYC ATTORNEY HAD SIMPLY DONE A "QUIT-CLAIM DEED CHANGE" A FEW YEARS AGO,
    WHILE THERE WAS THE MORTGAGE EXISTING ON THE PROPERTY, SECURED BY THE PROPERTY, IN
    MY CLIENT'S NAME "WITHOUT ASKING THE BANK FOR APPROVAL OF MORTGAGOR CHANGE".
    I BELIEVE THE ATTORNEY (LIKE MANY) "ILLEGALLY DID SUCH QUIT-CLAIM" (VIOLATES NYS LAW OF FRAUDULENT CONVEYANCES") SO DEPRECIATION DEDUCTION AND MTGE INT DEDUCTION ARE WRONG ON LLC TAX RETURN, AND OF COURSE THE TAX RETURN PREPARER DID WRONG BY NOT REVIEWING SUCH MTGE, AND PUT ON WRONG LINE OF K-1; SHOULD HAVE BEEN LINE 2 AS "RENTAL ACTIVITY LOSS" WITH NO S/E LINE 14A AT ALL.

    MY FEELING IS TO FILE A FORM 8082 WITH CLIENT YEAR 2017 PERSONAL TAX RETURN AND ADVISE LLC TAX PREPARER TO AMEND THE YEAR 2017 (AND ALL AFFECTED YEARS) FORM 1065 IMMEDIATELY.  ALSO TELL THE ATTORNEY TO UNDO HIS CRIMINAL FRAUD OF CONVEYANCE.

    AM I CORRECT IN TAKING THIS APPROACH????




    ------------------------------
    BIG JOHN
    JOHN J PETITO CPA PLLC
    NORTH WOODMERE NY
    ------------------------------