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Subject Author Date
1099 - losses taken against RE leilani.martin 01-24-2007
Posted by leilani.martin on January 24, 2007, 1:56 am
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 This question is coming from a non-accounting person so
please excuse my ignorance.

Someone in my office is preparing 1099s for 2006. An
example of one situation:

According to the the yearly spreadsheet, there was a total
income of 12K. He is adding back in the losses of the
months where the losses were taken against the RE. Is this
correct? If not I am ready to suggest asking his
accountant for clarification. If it is correct, it's just
one more thing for me to learn.

Thank you.

LM

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Posted by Phoebe Roberts, EA on January 25, 2007, 2:05 am
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 leilani.martin@yahoo.com wrote:

> Someone in my office is preparing 1099s for 2006.

Because that person, during 2006, paid unincorporated
entities more than $600 each. Preparing 1099s is an
indication you had expenses, not income.

> According to the the yearly spreadsheet, there was a total
> income of 12K. He is adding back in the losses of the
> months where the losses were taken against the RE. Is this
> correct?

Unfortunately, I have absolutely no idea what you're even
trying to ask. He has gross income (revenues) of $12,000?
Or he had profits (income less expenses) of $12,000?

By RE, do you mean Retained Earnings? And you're asking
whether profit in one month can be offset by losses in
another month, where both the months fall within the same
tax year? That's essentially correct, although it's not how
I'd describe the mechanics of it. Basically, you use all of
your income and all of your deductible expenses for the
entire year in determining whether (and to what extent) you
have profits or losses for the year.

Phoebe :)

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Mark X. Rigotti, CPA on January 25, 2007, 2:05 am
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> This question is coming from a non-accounting person so
> please excuse my ignorance.
>
> Someone in my office is preparing 1099s for 2006. An
> example of one situation:
>
> According to the the yearly spreadsheet, there was a total
> income of 12K. He is adding back in the losses of the
> months where the losses were taken against the RE. Is this
> correct? If not I am ready to suggest asking his
> accountant for clarification. If it is correct, it's just
> one more thing for me to learn.

Either someone is very confused or they are not preparing
1099's. 1099's have nothing to do with retained Earnings.

Seek out competent assistance STP (Sooner than possible)

Regards,

Mark Rigotti, CPA

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

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