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Have you donated lately? If not, please donate some money so that we have this lovely site up and running. Eric will appreciate that we appreciate his efforts. If you cannot donate during tax season, do you think it is easier for you to donate in November or December?

We must keep Eric happy. This is too valuable a resource to lose!!! Let's make sure that he gets enough donations to take care of the site in the most excellent way AND even take his family out for a nice dinner!! I think the dinner is a very fitting thing for him to spend some of our donations on. I/we certainly appreciate him that much!!!

I've been thinking about hanging this one in my office.

You can see the print on top of the 6' bookcase. Office door is to the far right. In front of the double sliding closet doors on the left are my two client chairs. So, clients do walk past the print, but it's over their heads and they are never really facing directly in that direction. It does get a chuckle now and then.

So sorry, because it is SO funny. Here is the youTube link.

You're welcome.

Oh that was just a shot of a bookcase. It's out of my reach, so isn't overflowing, yet; well almost. And, the file cabinet just holds my Jolly Ranchers and pens for clients as they arrive &/or leave. I think I've posted my mess before. I'll add a pic here again soon.

Thank you all very much!

DONE! THANK YOU, ERIC!

Except that it's snowing here!

Then, I would make the sale price equal to the adjusted basis so that no loss or gain is reflected on the return. Will that work in your client's situation?

as it were...

LMAO!!!

Ah yes, "the hipster underwear taxpayer strategy". Happens to me at least once a year. Taxpayer slips in a flattering (size), popular, functional and colorful 3 pak, trying to gain your generosity in calculating their tax liability. IRS knows all about it and they have sent out briefs on the subject to warn us to not get boxed in by this ploy.

I am checking the box that they had health insurance all year.

Thank you so very much! I prepared the donor's tax return as though she sold the property and it was never gifted. After improvements and selling expenses, the transaction results in a loss of ($32,765). The donee's loss using FMV plus improvements and selling expenses is ($19,227).

Done, thanks for reminder.

The property was sold at a loss no matter which value you use, so the basis for computing the donee's loss is the lower of donor's adjusted basis or FMV at the date of the gift, and in this case that would be the FMV of $130K. From there, the donee has additional basis of $8K of additional improvements. BHoffman, check out pub 544, use ctrl-F for "gift" and that will take you to the sections on handling sales of gifted property. Maybe this paragraph from the MTG at para 1788 will help: Gift of Code Sec 1245 or 1250 Property: The recapture of depreciation as ordinary income when a sec 1245 or sec 1250 property is sold or otherwise disposed does not apply in the case of disposition by gift or to transfers at death (except a taxable transfer of sec 1245 or sec 1250 property in satisfaction of a specific bequest of money) (Code sec 1245(b ) and 1250 (d ); Reg. sec 1.1245-4). Upon a later sale, however, the donee will realize the same amount of ordinary income that the donor would have realized if the donor had retained the property and sold it (except in the case of a tax-exempt donee). Also, if the taxpayer contributes sec 1245 or sec 1250 property to a charitable organization, the allowable charitable contribution deduction is reduced by the amount that would have been treated as ordinary income if the taxpayer had sold the asset at its fair market value. However taking this one step further, because the property was sold for less than the net book value of the donor, I don't believe there would be any recapture of depreciation because if the donor sold it for that, the donor wouldn't have recapture. I don't have time to research that, but I think the entire loss is a short-term capital loss.

Done! Thank you!

The whole basis issue is more complicated than "the donee never rented it." IF the donee got the gift before the donor died, then donee's basis is donor's basis plus money donee put in to property. Donor's basis is adjusted by accumulated depreciation over the years of rental. If donee got the property upon donor's death, then donee gets basis step-up as of DOD FMV, plus money put in to property. I can't answer any of those issues for you as the devil is in the details and you have more of those than I do. All I wanted to confirm was how to get rid of the property on the depreciation schedule, in Drake, while not making a further muck of things.

So $79 covers your cost for the second return and all the research involved? Still not getting it...

Done. Thank you, Pacun, for the reminder. Thank you, Eric, for keeping us up and running.

Me, too!

I applied as well. Much easier than logging into E-Services.

I appreciate the reminder. Just made mine, and it took less than 60 seconds, start to finish. I can't believe I don't think about this until someone reminds me. Grrrr. I apologize, Eric!

Thanks for the reminder. Thanks Eric!!!

This is so true. Just like my client today that told me she closed her business March 15, then she said she was working from home. So you relocated your business? You need to decide whether you are closed or not and tell me next month when I do sales tax. Tell me you closed or did not close, but don't leave it up to me, and don't contradict yourself.

I don't understand the "parent corp" involvement in the transaction or why it is issuing a 1099. Is the corporation renting land from the individual owners? Could you clarify that, please? Who is the actual owner of this land being purchased? If the land is titled in the individual names, it seems to me that the interest should be reported as investment interest expense on Form 4952 unless the corporation is actually renting the land, and then you have rental on Sch E with the interest expense being reported there.

wow I wish my office was this clean - where are all your papers?

I think I'm a nimrod. Why do anything? I can just leave it there. I'm a mess today!

For the donor, In ATX there are choices of disposition methods, one of which might pertain to the donor - either converted to personal , or do not calculate gain or loss - to remove this property from the donor's depreciation schedule .

No - The donee never lived in the house. Yes - The donor's (adjusted) basis of $136K was after depreciation. How do I get the property off the donor's tax return? Do I fill out a 4797 with the sale price equal to the adjusted basis so there is no gain or loss? Also, I just report the sale on the donee's form 8949 and there are no problems with the 1099S form, right? Thanks so much. This is basic stuff but I'm still so stressed out about Toody and the in laws' dog that I don't trust my own judgment. Next week my BIL and SIL are visiting for a few days, but they are a lot less high maintenance than the parents and their dog! Hubby owes me big time for having his relatives visit during the tax season, but he was a hero about Toody.

Was the donor's basis of $136K after depreciation deductions allowed or allowable? If you are using the FMV because it is lower, then the holding period begins on the date of the gift, so you are correct that the loss would be short term. If the cost less depreciation allowed or allowable is less than FMV, then that would be the value of the gift, the holding period would include the donor's holding period, and you would be splitting the transaction into ordinary income and cap gain income or loss if there is depreciation recapture.

Only bad part of this for me is trying to explain why I can't e-file it due to a program that doesn't have the worksheet. It does have a worksheet but when I click on it I get a red warning that says it is for 1040 NR. Guaranteed I'm not using this stuff (I'm being nice and professional here) next year.

It happens all the time. The tax benefits go to the parents in the higher tax bracket, and the income goes to the kid in the lower tax bracket. Situation normal. How does the school know that the kid meets the filing threshold? Why are the parents amending if they took the ed benefits correctly in the first place? Tom Newark, CA

I agree, ATX seems to respond badly if your system has been resting or in sleep mode.

I'm not sure this has any effect on the issue but at the end of each day I shut down my computer in my home office. The next day I turn it on, fresh. I have not experienced the issue once this year. I'm sure many of you probably do the same as I and are still experiencing the issue. Just wanted to relay what I'm experiencing. Hopefully it will be resolved at some point in the future. Overall, (and I'm not looking to jinx anything) I've found the 2015 program to be working very well.

How did they manage to negotiate the check? I agree to treat it as KC suggests, but I am surprised that they did not have to reopen the estate to negotiate the check if it was made payable to the estate. The bank must not have been paying attention. Very lucky!

Yes, that's what I'd do. But I'd put the whole amount, as 'received from Estate of ....' then subtract the payments off as 'paid to bene...' If that confuses the IRS, they will send the client a letter, you respond with the simple explanation, and that ends it. Most likely you never hear a peep about it. But everything has been disclosed so your client is in the clear.

Gee, for such a small amount, it would be so tempting to just follow Jack's advice. But the fact that the client did not make that choice, but brought it to you, means you have to deal with it. After all, should this not be handled properly, the IRS can come after the executor. Would they, over such a tiny amount? Highly doubtful. So my next question is, who got the money? If there is only one bene, I'd show it on his return, on line 21, as nominee. If there were more than three, who each got their share, I'd follow Jack's plan. Either way, I would not try to revive the estate for that amount.

Well, new client left a nice new package of hipsters underwear in her bag of old tax returns for me to review. I'm happy with a jar of homemade apple butter, but this is special. Proud day for me.

Maybe next time won't be during tax season and you can take your dog and go to a spa somewhere while they visit with hubby.

But this dog has already attacked her dog. That justifies the muzzle. Besides putting on a muzzle is NOT punishing the dog. it does not hurt the dog, merely prevents him from biting. And just removing her dog does not deal with the fact that their dog has already been aggressive to HER, not just to her dog. Relationships are all about compromising, but she should not have to live in fear in her own home, just because her husband does not want to confront his parents. The muzzle is 'the compromise' in this case. I'm a total dog lover, but no one should have to tolerate any dog being allowed to behave aggressively without correction in their home.

Tell them you have the flu I had a cold earlier and people didn't even come in the door. Just basically dropped their envelopes in the yard and took off. It was great!

I am very sorry for you, too. It seems like everything happens during this time of the year. Just get done what you can and don't wear yourself out too much. I'm trying to get corps done today and am way behind too. I wish that more people would just drop off their stuff and not NEED to see me.

SO SORRY ABOUT ALL OF YOUR FAMILY - PETS... I received a call during a client finish - my dad was dying - cleared the office - it was like a fire drill - it was a urine uti - test drill. I said parents - do not do this to me at tax time!! I saw him later that night and said I was going to see the grandkids and they told him he had to go to sleep and he said party -he was coming with... he has vascular dementia - so his speech is (has) failed.. but my arguing with staff as to protocol was not on my radar when there happened to be 6 people in my office and 2 more apptmts on a Friday - they were going to observe him over the weekend - No - over the weekend - you get a test! no Dr's on call anyway.. I am still doing Feb 2-5th as we got tons in those days - cannot get past that and now it is corps and finally back - yes it has been in my office way too long!

BHoffman, so sorry, it's a terrible thing to lose a loved pet, and at this date it's even harder. Will keep you in my prayers.