NASSAUSUFFOLK

​A partnership LLC did a 1031 exchange, selling one property and purchasing three properties, each purchased in its own single member LLCs, owned by the original LLC.

The tenant of one LLC went into bankruptcy and stopped paying rent.  The LLC stopped paying the mortgage.  The only asset of the LLC is the property.  if the bank forecloses, and the single member LLC is insolvent, will the cancellation of debt income be taxable to the partners of the LLC?

Thanks

------------------------------
Michael Rubinstein
Michael D. Rubinstein CPA, PC
North Bellmore NY
------------------------------

Michael:

If you do have COD income, you can elect to reduce the basis in the property.

------------------------------
Robert Brown
ROBERT N. BROWN, CPA
Jericho NY
------------------------------

Original Message:
Sent: 06-26-2017 13:39
From: Michael Rubinstein
Subject: forclosure of a single member LLC owned by a partnship LLC

​A partnership LLC did a 1031 exchange, selling one property and purchasing three properties, each purchased in its own single member LLCs, owned by the original LLC.

The tenant of one LLC went into bankruptcy and stopped paying rent.  The LLC stopped paying the mortgage.  The only asset of the LLC is the property.  if the bank forecloses, and the single member LLC is insolvent, will the cancellation of debt income be taxable to the partners of the LLC?

Thanks

------------------------------
Michael Rubinstein
Michael D. Rubinstein CPA, PC
North Bellmore NY
------------------------------

Original Message------

Michael:

If you do have COD income, you can elect to reduce the basis in the property.

------------------------------
Robert Brown
ROBERT N. BROWN, CPA
Jericho NY
------------------------------

Unfortunately, the basis is negligible among all of the properties.​

------------------------------
Michael Rubinstein
Michael D. Rubinstein CPA, PC
North Bellmore NY
------------------------------

Original Message:
Sent: 06-28-2017 09:42
From: Richard Terris
Subject: forclosure of a single member LLC owned by a partnship LLC

Just curious

Considering the original 1031 included a reinvestment in three entities

If there were insufficient basis in the one LLC, could you reduce basis in the other two ?

Richard Terris CPA

Leon D Alpern & Company CPA's

Michael:

Actually, the client probably does have basis here, as you probably have to recognize the deferred gain, on the disposition.

------------------------------
Robert Brown
ROBERT N. BROWN, CPA
Jericho NY
------------------------------

Original Message:
Sent: 06-28-2017 12:35
From: Michael Rubinstein
Subject: forclosure of a single member LLC owned by a partnship LLC

Unfortunately, the basis is negligible among all of the properties.​

------------------------------
Michael Rubinstein
Michael D. Rubinstein CPA, PC
North Bellmore NY
------------------------------

Original Message:
Sent: 06-28-2017 09:42
From: Richard Terris
Subject: forclosure of a single member LLC owned by a partnship LLC

Just curious

Considering the original 1031 included a reinvestment in three entities

If there were insufficient basis in the one LLC, could you reduce basis in the other two ?

Richard Terris CPA

Leon D Alpern & Company CPA's

Original Message:
Sent: 6/27/2017 9:09:00 AM
From: Robert Brown
Subject: RE: forclosure of a single member LLC owned by a partnship LLC

Michael:

If you do have COD income, you can elect to reduce the basis in the property.

------------------------------
Robert Brown
ROBERT N. BROWN, CPA
Jericho NY
------------------------------

Original Message:
Sent: 06-26-2017 13:39
From: Michael Rubinstein
Subject: forclosure of a single member LLC owned by a partnship LLC

​A partnership LLC did a 1031 exchange, selling one property and purchasing three properties, each purchased in its own single member LLCs, owned by the original LLC.

The tenant of one LLC went into bankruptcy and stopped paying rent.  The LLC stopped paying the mortgage.  The only asset of the LLC is the property.  if the bank forecloses, and the single member LLC is insolvent, will the cancellation of debt income be taxable to the partners of the LLC?

Thanks

------------------------------
Michael Rubinstein
Michael D. Rubinstein CPA, PC
North Bellmore NY
------------------------------

It is my understanding that the credit card companies will issue a 1099 showing how much was paid. Also it is usually broken down by monthly totals. At least that is what I have received in the past for my credit card sales (and some of my other client.)
Beat, Irene

------------------------------
Irene Wachsler, CPA
Wachsler CPA LLC

Contact:
Irene Wachsler,
Trusted Biz Advisor for small business & gig economy
Cryptocurrency Tax Reporting
Mass Film Tax Credits
Wachsler CPA , LLC
Cell: 781.883.3174
Email: irene@iw-cpa.com
------------------------------

Original Message:
Sent: 12-27-2022 04:59 PM
From: Richard Terris
Subject: forclosure of a single member LLC owned by a partnship LLC

Just thought this was important

Had a client ask me if they needed to prepare a 1099 NEC or MISC for payments for services in their business paid by credit card

They use Quickbooks and they were telling me that Quickbooks did not pick up the CC payments as part of the 1099 reporting because of the new rules

    That was back in the old days of the beginning of December

        

Any idea where we stand at this point for the 1/31/2023 deadline?

Original Message:
Sent: 6/27/2017 9:09:00 AM
From: Robert Brown
Subject: RE: forclosure of a single member LLC owned by a partnship LLC

Michael:

If you do have COD income, you can elect to reduce the basis in the property.

------------------------------
Robert Brown
ROBERT N. BROWN, CPA
Jericho NY

Original Message:
Sent: 06-26-2017 13:39
From: Michael Rubinstein
Subject: forclosure of a single member LLC owned by a partnship LLC

​A partnership LLC did a 1031 exchange, selling one property and purchasing three properties, each purchased in its own single member LLCs, owned by the original LLC.

The tenant of one LLC went into bankruptcy and stopped paying rent.  The LLC stopped paying the mortgage.  The only asset of the LLC is the property.  if the bank forecloses, and the single member LLC is insolvent, will the cancellation of debt income be taxable to the partners of the LLC?

Thanks

------------------------------
Michael Rubinstein
Michael D. Rubinstein CPA, PC
North Bellmore NY
------------------------------

Original Message:
Sent: 12/27/2022 5:00:00 PM
From: Richard Terris
Subject: RE: forclosure of a single member LLC owned by a partnship LLC

Just thought this was important

Had a client ask me if they needed to prepare a 1099 NEC or MISC for payments for services in their business paid by credit card

They use Quickbooks and they were telling me that Quickbooks did not pick up the CC payments as part of the 1099 reporting because of the new rules

    That was back in the old days of the beginning of December

        

Any idea where we stand at this point for the 1/31/2023 deadline?

Original Message:
Sent: 6/27/2017 9:09:00 AM
From: Robert Brown
Subject: RE: forclosure of a single member LLC owned by a partnship LLC

Michael:

If you do have COD income, you can elect to reduce the basis in the property.

------------------------------
Robert Brown
ROBERT N. BROWN, CPA
Jericho NY
------------------------------

Original Message:
Sent: 06-26-2017 13:39
From: Michael Rubinstein
Subject: forclosure of a single member LLC owned by a partnship LLC

​A partnership LLC did a 1031 exchange, selling one property and purchasing three properties, each purchased in its own single member LLCs, owned by the original LLC.

The tenant of one LLC went into bankruptcy and stopped paying rent.  The LLC stopped paying the mortgage.  The only asset of the LLC is the property.  if the bank forecloses, and the single member LLC is insolvent, will the cancellation of debt income be taxable to the partners of the LLC?

Thanks

------------------------------
Michael Rubinstein
Michael D. Rubinstein CPA, PC
North Bellmore NY
------------------------------

Original Message:
Sent: 12/28/2022 2:27:00 PM
From: James Hall
Subject: RE: forclosure of a single member LLC owned by a partnship LLC

Richard 

I don't believe the new reporting rules change this in any way. Transactions paid via credit card do not need to be included on 1099s because the credit card company will issue a 1099K for them.  As a business owner or their accountant, we would have no way of knowing how much a particular vendor had received in total in credit card transactions or total dollars. 

A mobile correspondence from:

James E Hall

Certified Public Accountant 

Hall CPA Group LLP

HallCPAGroup.com

Original Message:
Sent: 12/27/2022 5:00:00 PM
From: Richard Terris
Subject: RE: forclosure of a single member LLC owned by a partnship LLC

Just thought this was important

Had a client ask me if they needed to prepare a 1099 NEC or MISC for payments for services in their business paid by credit card

They use Quickbooks and they were telling me that Quickbooks did not pick up the CC payments as part of the 1099 reporting because of the new rules

    That was back in the old days of the beginning of December

        

Any idea where we stand at this point for the 1/31/2023 deadline?

Original Message:
Sent: 6/27/2017 9:09:00 AM
From: Robert Brown
Subject: RE: forclosure of a single member LLC owned by a partnship LLC

Michael:

If you do have COD income, you can elect to reduce the basis in the property.

------------------------------
Robert Brown
ROBERT N. BROWN, CPA
Jericho NY
------------------------------

Original Message:
Sent: 06-26-2017 13:39
From: Michael Rubinstein
Subject: forclosure of a single member LLC owned by a partnship LLC

​A partnership LLC did a 1031 exchange, selling one property and purchasing three properties, each purchased in its own single member LLCs, owned by the original LLC.

The tenant of one LLC went into bankruptcy and stopped paying rent.  The LLC stopped paying the mortgage.  The only asset of the LLC is the property.  if the bank forecloses, and the single member LLC is insolvent, will the cancellation of debt income be taxable to the partners of the LLC?

Thanks

------------------------------
Michael Rubinstein
Michael D. Rubinstein CPA, PC
North Bellmore NY
------------------------------

Original Message:
Sent: 12/28/2022 2:33:00 PM
From: Richard Terris
Subject: RE: forclosure of a single member LLC owned by a partnship LLC

James

Not addressing vendors, what about Consultants and Professionals like Accountants and Attorneys?

Original Message:
Sent: 12/28/2022 2:27:00 PM
From: James Hall
Subject: RE: forclosure of a single member LLC owned by a partnship LLC

Richard 

I don't believe the new reporting rules change this in any way. Transactions paid via credit card do not need to be included on 1099s because the credit card company will issue a 1099K for them.  As a business owner or their accountant, we would have no way of knowing how much a particular vendor had received in total in credit card transactions or total dollars. 

A mobile correspondence from:

James E Hall

Certified Public Accountant 

Hall CPA Group LLP

HallCPAGroup.com

Original Message:
Sent: 12/27/2022 5:00:00 PM
From: Richard Terris
Subject: RE: forclosure of a single member LLC owned by a partnship LLC

Just thought this was important

Had a client ask me if they needed to prepare a 1099 NEC or MISC for payments for services in their business paid by credit card

They use Quickbooks and they were telling me that Quickbooks did not pick up the CC payments as part of the 1099 reporting because of the new rules

    That was back in the old days of the beginning of December

        

Any idea where we stand at this point for the 1/31/2023 deadline?

Original Message:
Sent: 6/27/2017 9:09:00 AM
From: Robert Brown
Subject: RE: forclosure of a single member LLC owned by a partnship LLC

Michael:

If you do have COD income, you can elect to reduce the basis in the property.

------------------------------
Robert Brown
ROBERT N. BROWN, CPA
Jericho NY
------------------------------

Original Message:
Sent: 06-26-2017 13:39
From: Michael Rubinstein
Subject: forclosure of a single member LLC owned by a partnship LLC

​A partnership LLC did a 1031 exchange, selling one property and purchasing three properties, each purchased in its own single member LLCs, owned by the original LLC.

The tenant of one LLC went into bankruptcy and stopped paying rent.  The LLC stopped paying the mortgage.  The only asset of the LLC is the property.  if the bank forecloses, and the single member LLC is insolvent, will the cancellation of debt income be taxable to the partners of the LLC?

Thanks

------------------------------
Michael Rubinstein
Michael D. Rubinstein CPA, PC
North Bellmore NY
------------------------------

Original Message:
Sent: 12/28/2022 3:12:00 PM
From: James Hall
Subject: RE: forclosure of a single member LLC owned by a partnship LLC

I don't believe this makes any difference. You could receive credit card payments from several clients. We receive a 1099K ourselves under the old rules for credit card payments. So if a client had issued us a 1099 for those card payments it would be a duplicate. Which it needs to be avoided. I believe credit card payments are exempt in total. The business paying the vendor/consultant does not have the burden to confirm that the payee has or hasn't reached the 1099k threshold. 

-James

A mobile correspondence from:

James E Hall

Certified Public Accountant 

Hall CPA Group LLP

HallCPAGroup.com

Original Message:
Sent: 12/28/2022 2:33:00 PM
From: Richard Terris
Subject: RE: forclosure of a single member LLC owned by a partnship LLC

James

Not addressing vendors, what about Consultants and Professionals like Accountants and Attorneys?

Original Message:
Sent: 12/28/2022 2:27:00 PM
From: James Hall
Subject: RE: forclosure of a single member LLC owned by a partnship LLC

Richard 

I don't believe the new reporting rules change this in any way. Transactions paid via credit card do not need to be included on 1099s because the credit card company will issue a 1099K for them.  As a business owner or their accountant, we would have no way of knowing how much a particular vendor had received in total in credit card transactions or total dollars. 

A mobile correspondence from:

James E Hall

Certified Public Accountant 

Hall CPA Group LLP

HallCPAGroup.com

Original Message:
Sent: 12/27/2022 5:00:00 PM
From: Richard Terris
Subject: RE: forclosure of a single member LLC owned by a partnship LLC

Just thought this was important

Had a client ask me if they needed to prepare a 1099 NEC or MISC for payments for services in their business paid by credit card

They use Quickbooks and they were telling me that Quickbooks did not pick up the CC payments as part of the 1099 reporting because of the new rules

    That was back in the old days of the beginning of December

        

Any idea where we stand at this point for the 1/31/2023 deadline?

Original Message:
Sent: 6/27/2017 9:09:00 AM
From: Robert Brown
Subject: RE: forclosure of a single member LLC owned by a partnship LLC

Michael:

If you do have COD income, you can elect to reduce the basis in the property.

------------------------------
Robert Brown
ROBERT N. BROWN, CPA
Jericho NY
------------------------------

Original Message:
Sent: 06-26-2017 13:39
From: Michael Rubinstein
Subject: forclosure of a single member LLC owned by a partnship LLC

​A partnership LLC did a 1031 exchange, selling one property and purchasing three properties, each purchased in its own single member LLCs, owned by the original LLC.

The tenant of one LLC went into bankruptcy and stopped paying rent.  The LLC stopped paying the mortgage.  The only asset of the LLC is the property.  if the bank forecloses, and the single member LLC is insolvent, will the cancellation of debt income be taxable to the partners of the LLC?

Thanks

------------------------------
Michael Rubinstein
Michael D. Rubinstein CPA, PC
North Bellmore NY
------------------------------

Original Message:
Sent: 12/28/2022 4:22:00 PM
From: Richard Terris
Subject: RE: forclosure of a single member LLC owned by a partnship LLC

Just so I am clear as to the interpretation under the new postponement

If an Attorney is paid $20,000.00 for services by a business, on a credit card in 2022, the business has no requirement to issue a 1099?

Original Message:
Sent: 12/28/2022 3:12:00 PM
From: James Hall
Subject: RE: forclosure of a single member LLC owned by a partnship LLC

I don't believe this makes any difference. You could receive credit card payments from several clients. We receive a 1099K ourselves under the old rules for credit card payments. So if a client had issued us a 1099 for those card payments it would be a duplicate. Which it needs to be avoided. I believe credit card payments are exempt in total. The business paying the vendor/consultant does not have the burden to confirm that the payee has or hasn't reached the 1099k threshold. 

-James

A mobile correspondence from:

James E Hall

Certified Public Accountant 

Hall CPA Group LLP

HallCPAGroup.com

Original Message:
Sent: 12/28/2022 2:33:00 PM
From: Richard Terris
Subject: RE: forclosure of a single member LLC owned by a partnship LLC

James

Not addressing vendors, what about Consultants and Professionals like Accountants and Attorneys?

Original Message:
Sent: 12/28/2022 2:27:00 PM
From: James Hall
Subject: RE: forclosure of a single member LLC owned by a partnship LLC

Richard 

I don't believe the new reporting rules change this in any way. Transactions paid via credit card do not need to be included on 1099s because the credit card company will issue a 1099K for them.  As a business owner or their accountant, we would have no way of knowing how much a particular vendor had received in total in credit card transactions or total dollars. 

A mobile correspondence from:

James E Hall

Certified Public Accountant 

Hall CPA Group LLP

HallCPAGroup.com

Original Message:
Sent: 12/27/2022 5:00:00 PM
From: Richard Terris
Subject: RE: forclosure of a single member LLC owned by a partnship LLC

Just thought this was important

Had a client ask me if they needed to prepare a 1099 NEC or MISC for payments for services in their business paid by credit card

They use Quickbooks and they were telling me that Quickbooks did not pick up the CC payments as part of the 1099 reporting because of the new rules

    That was back in the old days of the beginning of December

        

Any idea where we stand at this point for the 1/31/2023 deadline?

Original Message:
Sent: 6/27/2017 9:09:00 AM
From: Robert Brown
Subject: RE: forclosure of a single member LLC owned by a partnship LLC

Michael:

If you do have COD income, you can elect to reduce the basis in the property.

------------------------------
Robert Brown
ROBERT N. BROWN, CPA
Jericho NY
------------------------------

Original Message:
Sent: 06-26-2017 13:39
From: Michael Rubinstein
Subject: forclosure of a single member LLC owned by a partnship LLC

​A partnership LLC did a 1031 exchange, selling one property and purchasing three properties, each purchased in its own single member LLCs, owned by the original LLC.

The tenant of one LLC went into bankruptcy and stopped paying rent.  The LLC stopped paying the mortgage.  The only asset of the LLC is the property.  if the bank forecloses, and the single member LLC is insolvent, will the cancellation of debt income be taxable to the partners of the LLC?

Thanks

------------------------------
Michael Rubinstein
Michael D. Rubinstein CPA, PC
North Bellmore NY
------------------------------

Original Message:
Sent: 12/28/2022 5:18:00 PM
From: James Hall
Subject: RE: forclosure of a single member LLC owned by a partnship LLC

This is my understanding, yes. But I don't think this is any different than it has been. The new reporting is for third party platforms. No impact on the reporting done by the business, except for maybe they no longer need to be concerned about issuing the 1099s on venmo, etc payments themselves 

-James

A mobile correspondence from:

James E Hall

Certified Public Accountant 

Hall CPA Group LLP

HallCPAGroup.com

Original Message:
Sent: 12/28/2022 4:22:00 PM
From: Richard Terris
Subject: RE: forclosure of a single member LLC owned by a partnship LLC

Just so I am clear as to the interpretation under the new postponement

If an Attorney is paid $20,000.00 for services by a business, on a credit card in 2022, the business has no requirement to issue a 1099?

Original Message:
Sent: 12/28/2022 3:12:00 PM
From: James Hall
Subject: RE: forclosure of a single member LLC owned by a partnship LLC

I don't believe this makes any difference. You could receive credit card payments from several clients. We receive a 1099K ourselves under the old rules for credit card payments. So if a client had issued us a 1099 for those card payments it would be a duplicate. Which it needs to be avoided. I believe credit card payments are exempt in total. The business paying the vendor/consultant does not have the burden to confirm that the payee has or hasn't reached the 1099k threshold. 

-James

A mobile correspondence from:

James E Hall

Certified Public Accountant 

Hall CPA Group LLP

HallCPAGroup.com

Original Message:
Sent: 12/28/2022 2:33:00 PM
From: Richard Terris
Subject: RE: forclosure of a single member LLC owned by a partnship LLC

James

Not addressing vendors, what about Consultants and Professionals like Accountants and Attorneys?

Original Message:
Sent: 12/28/2022 2:27:00 PM
From: James Hall
Subject: RE: forclosure of a single member LLC owned by a partnship LLC

Richard 

I don't believe the new reporting rules change this in any way. Transactions paid via credit card do not need to be included on 1099s because the credit card company will issue a 1099K for them.  As a business owner or their accountant, we would have no way of knowing how much a particular vendor had received in total in credit card transactions or total dollars. 

A mobile correspondence from:

James E Hall

Certified Public Accountant 

Hall CPA Group LLP

HallCPAGroup.com

Original Message:
Sent: 12/27/2022 5:00:00 PM
From: Richard Terris
Subject: RE: forclosure of a single member LLC owned by a partnship LLC

Just thought this was important

Had a client ask me if they needed to prepare a 1099 NEC or MISC for payments for services in their business paid by credit card

They use Quickbooks and they were telling me that Quickbooks did not pick up the CC payments as part of the 1099 reporting because of the new rules

    That was back in the old days of the beginning of December

        

Any idea where we stand at this point for the 1/31/2023 deadline?

Original Message:
Sent: 6/27/2017 9:09:00 AM
From: Robert Brown
Subject: RE: forclosure of a single member LLC owned by a partnship LLC

Michael:

If you do have COD income, you can elect to reduce the basis in the property.

------------------------------
Robert Brown
ROBERT N. BROWN, CPA
Jericho NY
------------------------------

Original Message:
Sent: 06-26-2017 13:39
From: Michael Rubinstein
Subject: forclosure of a single member LLC owned by a partnship LLC

​A partnership LLC did a 1031 exchange, selling one property and purchasing three properties, each purchased in its own single member LLCs, owned by the original LLC.

The tenant of one LLC went into bankruptcy and stopped paying rent.  The LLC stopped paying the mortgage.  The only asset of the LLC is the property.  if the bank forecloses, and the single member LLC is insolvent, will the cancellation of debt income be taxable to the partners of the LLC?

Thanks

------------------------------
Michael Rubinstein
Michael D. Rubinstein CPA, PC
North Bellmore NY
------------------------------

Original Message------

​A partnership LLC did a 1031 exchange, selling one property and purchasing three properties, each purchased in its own single member LLCs, owned by the original LLC.

The tenant of one LLC went into bankruptcy and stopped paying rent.  The LLC stopped paying the mortgage.  The only asset of the LLC is the property.  if the bank forecloses, and the single member LLC is insolvent, will the cancellation of debt income be taxable to the partners of the LLC?

Thanks

------------------------------
Michael Rubinstein
Michael D. Rubinstein CPA, PC
North Bellmore NY
------------------------------

The Section 108 Exclusion rules require that for Partnerships,  insolvency is tested at the individual partner level.  Results will vary at the individual level.  Other available elections need to be considered such as qualified real property business debt, basis reduction,  etc.

------------------------------
Robert Barnett
CPA, ESQ.
Capell Barnett Matalon & Schoenfeld LLP
Syosset NY
------------------------------

Original Message:
Sent: 06-27-2017 10:09 AM
From: Frank Sands
Subject: forclosure of a single member LLC owned by a partnship LLC

Cancellation of debt results in taxable income. If the LLC is disregarded or a pass thru entity then the owners will get income. If we assume the LLC is insolvent then your client should consider the income exclusion provided by IRC Section 108. The federal and state bankruptcy codes should be consulted.  

Sent from Outlook

Original Message------

​A partnership LLC did a 1031 exchange, selling one property and purchasing three properties, each purchased in its own single member LLCs, owned by the original LLC.

The tenant of one LLC went into bankruptcy and stopped paying rent.  The LLC stopped paying the mortgage.  The only asset of the LLC is the property.  if the bank forecloses, and the single member LLC is insolvent, will the cancellation of debt income be taxable to the partners of the LLC?

Thanks

------------------------------
Michael Rubinstein
Michael D. Rubinstein CPA, PC
North Bellmore NY
------------------------------