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Itemized Deductions Schedule-A


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Old 01-30-2014, 12:14 PM
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Business Expense - Schedule A Vs. Schedule C

All,

I have a strange situation for 2013 that I will try to lay out for you experts.

I am a financial advisor and a W-2 employee. I am 100% commission, but they make us employees for benefit purposes.

I recently moved firms and my two partners came with me. We received a transition bonus for the move. My senior partner who is 70 retired shortly after we moved. The new firm would not pay him a transition bonus directly becuase he needed to sign a 9 year employment agreement. He was not interested in a transition bonus, just a buyout of his portion of the book of business because he was retiring. My partner and I used our transition bonuses to buy him out. My portion of this was right above $60,000.

We talked to a CPA, who issued him a 1099-B on our behalf for the purchase of a "Client List" so he could write off the check as a LTCG.

On my taxes, I am unsure how to treat this payment to him. Right now, I have it in on a schedule C as a section 197 depreciable intangible asset because everything I read said that is what a Client List is. I have no schedule C income since I am an employee. I was told I could make the argument that I should be able to deduct it there over 15 years because I am 100% commissioned, and that is the only place to deduct a intangible asset like that, as I understand it.

I then looked at the IRS website about employee business expenses. Could this be considered an employee business expense where I could deduct the whole thing this year on schedule A subject to above 2% of my AGI?

Does the issuing of the 1099-B affect me in any way?

Any help is greatly appreciated!



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Old 11-28-2017, 10:52 AM
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Monily Bookkeeping Services

Monily started as a simple bookkeeping processing organization. However, in time, it acquired professional expertise and expanded business operations bringing more effective talents onboard.
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