058 California Tax Liability on Ponzi Schemes

Your Tax Teacher Podcast6In episode 58 of the Your Tax Teacher Podcast, I discuss:

Federal Tax News –

IRS Proposal on Automatic Restaurant Tips Proposal

Ty Warner Beanie Baby Tax Evasion Case Decision

State Tax News –

Colorado  – Back to School Tax Holiday Bill introduced

South Carolina & New Jersey – Tax Reform Proposals

California – Ponzi Scheme and the Tax Liability on Fake Profits

Main Tax Topic

5 Things to know about Partnerships and Income Taxes

  1. Tax is not reported on the tax return – Income flows down to the partner level and is reported on the partner’s individual form 1040 tax return.  Tax is based on the partner’s tax rate.
  2. Technical Termination – Change in ownership
  3. New Partners & Existing Partners – Step up basis
  4. Distributions & Guarantee Payments & the K-1
  5. Tax Managing Partner – Who is responsible for filing the tax return and communicating with the IRS

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