Husband/wife partnership question regarding assets

Forum|Forum|4 years ago
February 19, 2022
1 reply
17 views

New client, and I am trying to decide if something fishy is going on or not.

The husband/wife have a business. For whatever reason, when this was formed, they decided to not put it on a schedule C and to have a partnership return. There is a piece of real property that is being depreciated on the return. When I looked it up on our local assessor's website, it is listed as being owned by husband and wife instead of the business. I normally wouldn't blink an eye over this, but it seems odd that they make the effort to have a separate return for the business, but they aren't keeping the assets separate.

Thoughts?

ProSeries Professional

This topic has been closed for replies.

Best answer by qbteachmt

Oh, I love a mystery.

"they decided to not put it on a schedule C and to have a partnership return."

They likely got that guidance, perhaps from an insurance agent, or look at their loan docs.

"There is a piece of real property that is being depreciated on the return."

Not everyone gets the right legal and tax guidance.

"When I looked it up on our local assessor's website, it is listed as being owned by husband and wife instead of the business."

That's not unusual. It really doesn't give them more protection, anyway, since it is still the two of them.

Did they open a separate bank account and do they keep the money segregated or do they commingle, there? Is the property business or residential, and is it insured by its own policy, a business policy, their personal property policy? Is it their shop or warehouse for the business? Are they trying to also charge Rent to themselves?

That was good to check, but otherwise, if there isn't anything else fishy, it seems to pass the smell test.

qbteachmtAnswer

Level 15

Oh, I love a mystery.

"they decided to not put it on a schedule C and to have a partnership return."

They likely got that guidance, perhaps from an insurance agent, or look at their loan docs.

"There is a piece of real property that is being depreciated on the return."

Not everyone gets the right legal and tax guidance.

"When I looked it up on our local assessor's website, it is listed as being owned by husband and wife instead of the business."

That's not unusual. It really doesn't give them more protection, anyway, since it is still the two of them.

Did they open a separate bank account and do they keep the money segregated or do they commingle, there? Is the property business or residential, and is it insured by its own policy, a business policy, their personal property policy? Is it their shop or warehouse for the business? Are they trying to also charge Rent to themselves?

That was good to check, but otherwise, if there isn't anything else fishy, it seems to pass the smell test.

Don't yell at us; we're volunteers

A

ajpAuthor

Level 6

Thank you so much for your reply. I was able to ask some good questions, and now I feel much more comfortable.

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