IRS Circular 230 Disclosure: Unless expressly stated otherwise, any tax advice contained herein, including attachments and enclosures, is not intended or written to be used, and may not be used, for the purpose of (1) avoiding tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2) promoting, marketing or recommending to another party any tax-related matters addressed herein.
From: taxchat@yahoogroups.com [mailto:taxchat@yahoogroups.com] On Behalf Of John Stevens, Equi-Tax
Sent: Thursday, November 13, 2008 11:02 AM
To: taxchat@yahoogroups.com
Subject: RE: [taxchat] Joint venture
Robert,
It seems that since the income from the sales went to the 3 individuals, it would first need to be reported either on a partnership return (but they could elect out of partnership treatment by just reporting their respective shares on Schedule C), or if they consider it a not-for-profit activity, reported on line 21, with expenses on Schedule A subject to 2% of AGI limit, and then report the charitable contributions on Schedule A as well, as Donna suggests. I don’t think it would be correct to not report the income – my opinion.
John Stevens, EA
Stevens Tax & Accounting, Inc., dba Equi-Tax
1870 - 50th St. E., Suite 8
Inver Grove Heights, MN 55077
651-773-5000
FAX 651-457-4529
equitax@unique-software.com
www.equitax.net
From:
Sent: 11/13/2008 9:38 AM
To:
Subject: Re: [taxchat] Joint venture
I would think that this all should be charitable contributions and that no business should be reported. The receipts for sales should be paid directly to the Church and all the out of pocket expenses should be considered non cash contributions at cost. Then put mileage in for the trips to the studio and radio stations when promoting.
On Thu, Nov 13, 2008 at 7:54 AM, Donna J. Perrone <donnaperrone@
The music director/organist of our church is my client. She joined forces with our 2 cantors, a husband and wife, to produce a CD with religious selections and other comforting music. They are donating all the profits to our parish.
This is basically a one time event. I am thinking about how this will be reported on my client's return this year. My first thought is that the income would be on line 21, the expenses on Sch A, subject to 2%, and the profits donated reported on Sch A as a charitable contribution. Since the organist and her husband have a high AGI, they can very well lose the deduction for the expenses.
Any thoughts on this?
Donna Perrone
Donna J. Perrone, EA
203-469-4939
203-468-2038 fax
IRS Circular 230 Disclosure: Unless expressly stated otherwise, any tax advice contained herein, including attachments and enclosures, is not intended or written to be used, and may not be used, for the purpose of (1) avoiding tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2) promoting, marketing or recommending to another party any tax-related matters addressed herein.
--
Robert Lukey EA CPA
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