Technical topics regarding tax preparation.
4-May-2021 7:00pm
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I have a Minnesota S Corp that purchased a small mobile home park in Wisconsin in 2020. Their other 11 rentals are in Minnesota and Wisconsin is very small. I did not get an approval for separate accounting for 2020 which would have been nice. They have a loss this year for all properties, and Ultra tax is not showing any taxes due. I will be talking to Ultra tomorrow to go through their calculations, seems right. Can I now ask for separate accounting for 2021? Is there anything I need to be aware of?? Client already registered for doing business in Wisconsin.
Jon
5-May-2021 10:52am
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It would generally be unsurprising that a lossmaking activity apportioned would lead to no Wisconsin taxes due. Yes, you can request separate accounting for a unitary business doing business in and out of the state until the end of the fiscal year.
Just curious -- what reason do you want to use separate accounting?
5-May-2021 1:28pm
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They had to purchase the WI rental(3 others in MN) and it will be profitable, but by far the smallest. Not sure prorating will help them, but know the $$ on the WI should be easily calculated.
5-May-2021 1:30pm
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12-May-2021 12:34pm
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Missing the restrictions on the adjustments to depreciation adjusts the WI income is enough to a turn loss into income and WI income into a % that creates taxes in Wisconsin - when the two mobile home parks have tax loses on the federal. Next year will be interesting as a lot more income, but not for WI properties. So hopefully WI taxes will become smaller.
Thanks
Jon
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