I was 20% shareholder in my fathers tannning salon business. When he sold the business he paid me 20% of the profit, which came to 58,000. I thought it was pre taxed but it ws not. Im scard that if I dont ammend it on my 2006 taxes that my father will be audited. It was a LLC. We live in Indiana.
2007-04-23 01:12:52 · 4 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
You don't have to worry about your father, he won't be audited if you fail to report income.
If you were a shareholder, your father gave you a K-1. You just put the data from the K-1 into your amended return.
2007-04-23 02:27:38 · answer #1 · answered by ninasgramma 7 · 0⤊ 0⤋
You need to pay taxes on the money. You got it, it's taxable no matter what you thought about the taxes already being paid, you need to pay the taxes. If you were a shareholder, the sale of the business is a taxable transaction and must be reported. It's not a gift from your father. Amend your return.
2007-04-23 02:23:54 · answer #2 · answered by Judy 7 · 1⤊ 0⤋
You must file an amended return and claim the gain. Your father won't be audited if you don't, but YOU most certainly will be.
Your gain will be based upon whatever your basis in the shares was, subtracted from the net proceeds from the sale. If your basis was $0, then the entire gain will be taxable. Your basis in the shares would be whatever you paid for them, or whatever your father's basis in them was if he gave you the shares.
2007-04-23 03:25:04 · answer #3 · answered by Bostonian In MO 7 · 0⤊ 0⤋
didn't you ask the same thing yesterday??
just file an amended return (1040X)
2007-04-23 01:17:32 · answer #4 · answered by Jo Blo 6 · 1⤊ 0⤋