Rules of Attribution

DB · Joined: 25 Aug 2007 Posts: 16

I own 100% of my small corporation. What do I need to know about the "Rules
of Attribution"? Thanks.

Archived from group: misc>taxes

Paul Thomas, CPA · Joined: 25 Aug 2007 Posts: 3094

"DB" wrote
>I own 100% of my small corporation. What do I need to know about the "Rules
>of Attribution"? Thanks.

Do you have reason to believe they apply to you?

http://www.cabusinessadvisor.com/Tax/TaxTraps/Attrib.htm
There are tax rules to prevent excess income splitting. Collectively, the
rules are generally known as the Attribution Rules. Simply stated, if a
taxpayer has at any time transferred or assigned to a non-arm's length
person the right to an amount which would otherwise have been included in
your income, the amount transferred must be included in the transferor
taxpayer's income for the year. Transfers include gifts or a sale, even if
the sale is at Fair Market Value. Gifts are considered dispositions for
income tax purposes and therefore any gift may trigger capital gains to the
Transferor. However, capital losses on gifts may be denied under the stop
loss rules.

The attribution rules will attribute income from property back to an
individual who may have transferred or loaned the property to split income.
Transfers include gifts and sales (even if at Fair Market Value). For
example, transfers or loans of property to a spouse (also common-law spouse)
will result in attribution of income and capital gains back to the spouse
who transferred the property. A taxpayer transferring or loaning property to
his or her spouse is still accountable for any capital gain, or loss, on the
sale of the property (including money). Also, transfers or loans of property
to a minor who is a non-arms-length person (for example, your child) will
also result in attribution of income (but not capital gains).

--
Paul A. Thomas, CPA
Athens, Georgia

DB · Joined: 25 Aug 2007 Posts: 16

"Paul Thomas, CPA" wrote in message $Mu4.14400@bignews7.bellsouth.net...
>
> "DB" wrote
>>I own 100% of my small corporation. What do I need to know about the
>>"Rules of Attribution"? Thanks.
>
>
>
> Do you have reason to believe they apply to you?
>
>
> http://www.cabusinessadvisor.com/Tax/TaxTraps/Attrib.htm
> There are tax rules to prevent excess income splitting. Collectively, the
> rules are generally known as the Attribution Rules. Simply stated, if a
> taxpayer has at any time transferred or assigned to a non-arm's length
> person the right to an amount which would otherwise have been included in
> your income, the amount transferred must be included in the transferor
> taxpayer's income for the year. Transfers include gifts or a sale, even if
> the sale is at Fair Market Value. Gifts are considered dispositions for
> income tax purposes and therefore any gift may trigger capital gains to
> the Transferor. However, capital losses on gifts may be denied under the
> stop loss rules.
>
> The attribution rules will attribute income from property back to an
> individual who may have transferred or loaned the property to split
> income. Transfers include gifts and sales (even if at Fair Market Value).
> For example, transfers or loans of property to a spouse (also common-law
> spouse) will result in attribution of income and capital gains back to the
> spouse who transferred the property. A taxpayer transferring or loaning
> property to his or her spouse is still accountable for any capital gain,
> or loss, on the sale of the property (including money). Also, transfers or
> loans of property to a minor who is a non-arms-length person (for example,
> your child) will also result in attribution of income (but not capital
> gains).
>
>
>
>
>
>
> --
> Paul A. Thomas, CPA
> Athens, Georgia
>
>
>
>
>
>
>
>
>
>

DB · Joined: 25 Aug 2007 Posts: 16

"Paul Thomas, CPA" wrote in message $Mu4.14400@bignews7.bellsouth.net...
>
> "DB" wrote
>>I own 100% of my small corporation. What do I need to know about the
>>"Rules of Attribution"? Thanks.
>
>
>
> Do you have reason to believe they apply to you?
>
>
> http://www.cabusinessadvisor.com/Tax/TaxTraps/Attrib.htm
> There are tax rules to prevent excess income splitting. Collectively, the
> rules are generally known as the Attribution Rules. Simply stated, if a
> taxpayer has at any time transferred or assigned to a non-arm's length
> person the right to an amount which would otherwise have been included in
> your income, the amount transferred must be included in the transferor
> taxpayer's income for the year. Transfers include gifts or a sale, even if
> the sale is at Fair Market Value. Gifts are considered dispositions for
> income tax purposes and therefore any gift may trigger capital gains to
> the Transferor. However, capital losses on gifts may be denied under the
> stop loss rules.
>
> The attribution rules will attribute income from property back to an
> individual who may have transferred or loaned the property to split
> income. Transfers include gifts and sales (even if at Fair Market Value).
> For example, transfers or loans of property to a spouse (also common-law
> spouse) will result in attribution of income and capital gains back to the
> spouse who transferred the property. A taxpayer transferring or loaning
> property to his or her spouse is still accountable for any capital gain,
> or loss, on the sale of the property (including money). Also, transfers or
> loans of property to a minor who is a non-arms-length person (for example,
> your child) will also result in attribution of income (but not capital
> gains).
>
>
>
>
>
>
> --
> Paul A. Thomas, CPA
> Athens, Georgia
>
>
>

I guess not. They asked in Sched. K if I owned more than 50%. I guess I
just wanted to know why.

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