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#### privateuly

My wife and I (filing jointly) started an LLC (50-50

members) in 2005. That year, the LLC had a loss of $7000.

In the same year, my wife had earned $5000 doing some

consulting work.

I am now reviewing the 2005 return that our (ex-) accountant

did, and I realized that in calculating the Self-Employment

tax, he had calculated as the income the $5000 consulting

income minus half of the loss from the LLC ($3500), giving

an income basis of $1500. In other words, he had ignored my

share of the LLC loss eventhough my wife and I filed

jointly.

Is this right? Should we have been entitled to deduct the

full amount of LLC loss which would give us 0 income basis

for the purpose of the self-employment tax calculation?

Thanks in advance!

Uly

members) in 2005. That year, the LLC had a loss of $7000.

In the same year, my wife had earned $5000 doing some

consulting work.

I am now reviewing the 2005 return that our (ex-) accountant

did, and I realized that in calculating the Self-Employment

tax, he had calculated as the income the $5000 consulting

income minus half of the loss from the LLC ($3500), giving

an income basis of $1500. In other words, he had ignored my

share of the LLC loss eventhough my wife and I filed

jointly.

Is this right? Should we have been entitled to deduct the

full amount of LLC loss which would give us 0 income basis

for the purpose of the self-employment tax calculation?

Thanks in advance!

Uly

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