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Thread: 4now, tax question about a DBA

  1. #1
    Hey 4now:

    How are you? Since you are the ILW tax guru, I wondered if you could answer a simple tax related question for me.

    I have a DBA, in which my alien ex-husband was 50% partner for tax year 2003. The entity was never set up as a partnership, in fact in prior years, all we did was take the net profit for the entity from the Schedule C and record it as additional marital income on the 1040. Well, for this tax return period, 2003, I must file as married but separate. So, how do I record my respective 50% share of that income? Unless, I am missing something I don't see where that is possible on the Schedule C or 1040!

  2. #2
    Hey 4now:

    How are you? Since you are the ILW tax guru, I wondered if you could answer a simple tax related question for me.

    I have a DBA, in which my alien ex-husband was 50% partner for tax year 2003. The entity was never set up as a partnership, in fact in prior years, all we did was take the net profit for the entity from the Schedule C and record it as additional marital income on the 1040. Well, for this tax return period, 2003, I must file as married but separate. So, how do I record my respective 50% share of that income? Unless, I am missing something I don't see where that is possible on the Schedule C or 1040!

  3. #3
    4now:

    I failed to mention that the DBA was in my name alone until the DBA was renewed (in this state that occurs once every five years) This occured on May 1, 2003 at which time my husband wished his name to be added to the DBA, which then altered the sole proprietorship (DBA) into a "husband-wife" entity. I realise that a husband wife entity should be dealt with as a partnership, and file a 1065 and then an individual K-1 for each partner is issued relative to his or her basis. But what I am struggling with is that since this occured mid-year, do I produce the 1065 from May 1 onward, and then treat the income from the entity prior to May 1 as a DBA and record income on a schedule C and add it to my 1040 net earnings? And also, since my husband never materially participated in the entity, but I did, then even though he has a 50% basis, for him any income would be from a passive activity (for me it would not) unless he had worked for more than 100 hours from May 1 until December 31..is that correct?

  4. #4
    Hello Swiss

    How are you. Havent been to the board lately. sorry. decided to pop in today and there you are.

    Your plan sounds ok. If you and husband could agree.. You actually could both file schedule C cutting everything down the middle 50%. (save expense of 1065 preparation.) Or as you said.. file 1065 for those months and generate K-1 for both of you. Be aware that K-1 is subject to self employment tax just like the schedule C. for both. This is not passive income for him. He was taking a draw during this period.. correct?. This is not set up as a S-corp where portion can be passive. this is not rental/royalty income for him.

    If he did not actively work the partnership you may want to look into dissolving such. Should be working partner to get draw/pay.

    I will check back late tonight if I get a chance.

    Take care Swiss.

  5. #5
    Hey buddy, thanks for answering. Hope you are well.


    Actually, I thought it would be passive for him and not for me. The reasoning for this was:
    PASSIVE:
    1. He was a paid employee, but did not receive any remuneration as a partner, nor did he make any partner draws during that period
    2. He did not "materially" participate in the entity = no capitol provided by him

    NON-PASSIVE:
    1. I capitolized the entity
    2. I provided unpaid services for more than the 100 hour requirement.

    If this is not actually set up with IRS as a partnership, does it have to be an S-corp, for it to be passive for a partner? Not able to pay for an accountant at this juncture, so I am wading through this one blind. Am I right, or can you get me straight??

    I tried to email you but I guess don't have your accurate email address- if you wish you can email me swissnut2000@yahoo.com.

  6. #6
    Please email me soon 4now. I've been waiting for you for sooooolong. I've cheese ( ) ready for you in my coffee shop. As well, I'm desperate for something else too.

  7. #7
    swiss-bolt-nutt-wrench-hammer-screw:

    do you not have anything better to do?

  8. #8
    What could be better than somebody is screwing me up with hammer like wrench so that my nutt and bolt could be altogether and then my husband will be back to me to fuc..me up. And then I won't be so disperate for other men from this forum.

  9. #9
    so you have decided I am female, after all.

    what husband, by the way?

  10. #10
    Have I ever had any discussion with you before to figure it out whether you are a male or a female? I don't remember though unless you can sharpen my memory as you are always well known to do so (obviously mistakenly). Though, there is no doubt in my mind that you are in between, neither a male nor a female.

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