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Actually I have loaded transcripts for deceased taxpayers IF I have a POA from the executor/CTA for the estate. But the POA signed by the taxpayer is no longer valid once they are deceased.

When the IRS flags a taxpayer as deceased, certain features of IRS websites are blocked. You may never see it on 'where's my refund'. I know for sure you can't download transcripts for deceased taxpayers, which really sucks. If I see an obit for a client and I have a POA for that client, I immediately login and download all the latest transcripts before the IRS cuts me off.

The best we can do is give them the 800-829-1040 and let them call for themselves, its very important for them to know what is happening is not within our control.

It is just hard for the executors to be patient when this is the last thing they are waiting on to close the estate out. And now they are concerned that when they finally get the refund, six months later they will get an interest check for the refund.

Until the return has been entered into the IRS computers it will not show up on the refund tracker. The IRS is soooo far behind in processing anything paper, it will still be a long time before refund comes. I don't know of any other way to check on it until someone starts processing it.

Thanks for sharing the link. Note that carrying costs pertain to costs while the property is being developed or improved, not day-to-day grass mowing. It looks like only the taxes can be capitalized and nothing else in this case. This leads me to wonder how those costs were paid. Did the partnership also have a cash account? The attorney surely was paid (surely!), and that is a deductible expense in the year paid.

Dan, I was thinking the same thing. File the returns to make the election. I'd also put a statement on the return that indicates the partnership had no activity that actually required a return be filed so that the IRS doesn't try to assess late filing penalties. ILLMAS, if you, or anyone else, would like a more complete reading of this under sec 266, this article from The Tax Advisor is a pretty good one. It also reminds us that with more people claiming the higher standard deduction, this election should be considered because the taxpayer can still benefit by adding real estate taxes and interest to basis that would otherwise be lost.

It is treated as investment property and covered by a sect 266 election. Since the returns for those years have never been filed, you might be in luck. Reg 1-266-1(c) states that the election has to be made with an original tax return, there is no reference that the return must be timely filed. Pub 535 also state the election must be made with an original return or if an original return has been filed, the election can be made with an amended return filed within 6 months of the due date without regards to extensions. So it appears that since your client's partnership has never filed any tax returns, those years are all open and original returns can be filed to make the election. However, you need to consider the effect of TCJA for years beginning after 2017. An election for sect 266 only covers otherwise deductible expenses. That limits the election to $10,000 of property taxes for years after 2017; and also eliminates the election for carry charges subject to the suspension of misc itemized deductions. Unless I am overlooking something, it looks like you can file a 1065 to make the 266 election for each open year and increase the basis (subject to TCJA for 2018 and 2019). $100,000 increase in basis should be well worth your fee for some basic returns to make the election per the reg and IRS pub. In situations where the election was omitted on original returns, PLRs have ruled favorably for taxpayers that were not advised of the 266 election, but that does not appear to be the case here.