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We've already had calls. At some point, ALL the clients need Rita-hugs. And double for the IRS, and triple for the legisvermin in DC!

Oh, but we get an extension of one month. One month to explain and hand hold 500 clients because of late changes. Perfect.

Bonnie: Based on the info provided, I'd probably tell him I'm not interested in doing his work. And he needs to act quickly since the penalty clock is running. He qualifies for the "needs to be somebody else's problem" category for at least 3 reasons. Right now especially, this should be all about what's best for you, not about solving self-inflicted wounds for problem clients.

You told him that you hadn't heard from him and didn't file an extension. He hasn't even paid! Tell him to go elsewhere, you have Covid.

Hug her hard.

I'd tell him buh-bye and I DON'T have COVID. Bonnie, you just worry about you, and get rested. This stress must be an immune suppressor at the very least. We are all praying for your healing, and that great health be restored. God bless you..... get some rest.....

The IRS has announced that no one should file amendments claiming the Unemployment Benefits Exclusion or Recovery Rebate Credits for any children for which the taxpayer did not receive the $ 500 or $ 600 from EIP 3. The IRS will use the data from filed 2020 tax returns and send out payments mid summer this year. I am sure they were having nightmarish visions of being inundated with amendments. Oh the horror

She's 22 so normally I think we would consider her young enough to be okay with this. However she has Type 1, Celiac, and Graves disease. So I'm very worried about her. For those of you so inclined, please join me in praying for her. Thank you.

Mom and son are both clients and mom thought she'd slip it by me to sign the e-file forms for her adult son. I guess she thought I wouldn't notice that the signatures are all in the same handwriting and that she returned them all together in the same envelope. She tried to lie and say it is his signature, but didn't have a response when I told her that the signature is vastly different than that of the prior two years. All of a sudden she remembered that he won't be able to sign until next week because he is on call for his job, so that is the real reason she tried to get this by me. What makes me even more angry besides the lying is that this person is a bank officer and definitely knows better. I may just fire her because of this. ETA - and when I say "adult son" this guy is 34 years old, not a child that recently reached the age of 18!

Ohhhhhhh @RitaB!!!

Hi Bonnie, Sorry to hear you caught the bug. Get well. If you just want to tell the guy off, you could blame that on Covid. No one would fault you for chewing him out, making a video of it, and posting it on YouTube. Then charging him 3X in advance if he decides to stay. Just saying. Tom Modesto, CA

There are too many possibilities and not enough concretes for us to get into this yet. The IRS commissioner said today he "thinks" the IRS can handle correcting returns that have unemployment. The software companies can't just update their systems without going through IRS system acceptance, so don't blame them. The states each have to decide how to handle these changes, and some of them will have to call special sessions if their legislatures aren't meeting at this time. Once the fed decides what to do we are not home yet because it may take awhile for the states. We just have to tell clients that nothing is settled yet and they have to wait. So don't even think about amendments yet. We too have a number of clients who haven't filed yet who are in a hold file while this gets sorted out. As much as we love our clients and want to help, there is nothing we can do right now but chill.

Exactly.

The "quarters" aren't calendar year quarters. Look at the forms and give her the exact dates you need.

I go with keeping it simple as asset sale with purchase info as basis, nice and neat. No hiding under desk, no time for this, you have work to do.

This is why we love eservices and clients with IRS.gov accounts. Just download whatever you need.

People paper filing 2020 are going to be in for rude surprise.

Yesterday, I spoke with the IRS about an amendment that was sent 3/23/2020. IT has finally been worked. I asked about the backlog. The IRS rep told me that they are working on amendments received in April 2020. She had no idea when they would get to the ones sent in June/July!

So WOAT is the opposite of GOAT? I did not know that!

Yup, fire away. It isn't worth it. I've never been audited but want absolutely clean records, to the best of my ability. And you are correct, how can you trust anything going forward?

I'd fire her, too. That response would be different if she's immediately said, "he's on call at work and asked me to sign for him - I guess that was dumb, huh?" because we all have oopsies especially regarding family. The lying immediately means I can't trust anything else she ever tells me, and I have enough irksome clients without that hanging over me. Good luck with them both, Judy.

That is really not cool, especially given her job responsibilities. "Trust is earned not given"

@NECPA in NEBRASKA ignore the extensions. Ignore the clients. Ignore the tax returns (except as a distraction for you when you need it). Let it all sit there and rot. Really. Any clients who don't understand that you and your husband are both sick at once don't deserve your effort, your time, or your concern. Anyone who actually cares about YOU will deal with any missed extensions or anything else. Anyone who doesn't return next year - you don't want them as clients anyway. You can't help them at all if you don't take care of yourself and your husband. You are both on my prayer list.

I question that. The tax attributes of deceased spouse do not carry over to surviving spouse. For example capital losses and NOL attributable to deceased spouse can not be claimed by surviving spouse after the final joint return for year of death has been filed. If business or rental property is solely owned by deceased spouse, then surviving spouse gets a full step up in basis. Furthermore, at the time of transfer, the property has zero adjustments for tax attributes, it does not retain it's character for recapture. If surviving spouse elects to file a joint return, then the only income and expenses reported by deceased spouse would be those incurred up to his date of death. Therefore the sale of the property after DOD is 100% attributable to surviving spouse (under the scenario above) and offset by her basis which does not retain the recapture attributed to the holding period of her husband.

If you have documentation to show that the original land/bldg allocation was done incorrectly and the $45,000 in improvements were never expensed, then you have something to work with. As a practical matter, rental property that was acquired many years ago, usually has significant amounts of depreciation recapture and capital gains. Unfortunately, we aren't given magic wands.

Or was an informal life estate created?

Is there a 1099-S? If so, I would just report it as a short-term capital asset sale.

What about 2016,2017, and 2018. They must still be in the trucks.

I vote for whimpering under the desk. Holding head with aching brain.

Not sure how that will work in a community property state either.

https://www.accountingtoday.com/articles/irs-to-automatically-process-refunds-on-jobless-benefit-payments

Take care Bonnie and hope you get to feeling better soon.

Exactly right! If it was jointly owned, there is half step up basis. If the improvements were made prior to his death, his half of those is included in the step-up, but her half should be added to her basis. If you're really lucky, it was just in his name so you get full step-up and don't have to mess with any of this.

Looks like you have a 1/2 step up basis to start with. Sounds like a prior tax preparer was involved, can you contact them for any additional information they might have? As cbslee mentioned, the county should have information on the original purchase price and likely a valuation of the land vs structures.

On VA just be careful that VA doesn't try to back it out twice because of how it get reported for federal and where VA will get their #. Several discussions about previously.

I will say this, I had forgotten how much I hated those 2018 forms. The WOAT. So glad we only had one year of those.

Gee, Rita, you don't have anything else going on right now but this one tax return to do, right? In late March, early April I am sure we all work on one return until it is finished completely, then put it away and work on the next one. And we get them all done the same day we start them. Right?

Oh, you know what I did? When the error message said you can't e-file when the taxpayer croaked way after this &^*% thing was due? I switched and made her taxpayer. Same *&^% message for the spouse croaking way after this &^*% thing was due. I forgot to switch the date of death. My bad, everybody. I'm losing it. Thank you, I am laughing.

Nah.... just give her a hug....

The "filing as surviving spouse" should be in the deceased person's signature line. the line for the signing spouse should be open Did you perhaps enter the the date of death for the wrong spouse? ( I started to say: Did you kill of the wrong spouse. but that seems too harsh even for a whiny procrastinator)

Thank you Judy and I agree with ILLMAS, donations to pay for the server that host this site, the electricity it consumes, the programming hours and maintenance for this site, etc. are welcome. Thank you Eric for allowing us to get answers to our questions and to the moderators to keep this site as friendly, courteous and efficacious (Dr. Fauci's word) as possible.

Oh darn, I was wondering if they even know what's in the hopper's for 2016,2017,2018. Tp sent check in Nov just to stop notices concerning 2017 which had a c/o from 2016 which they have not processed. They haven't even cashed his check yet.

Or by putting the daughter on the Title did the mother gift 50 % of the home to her daughter?

If he CAN be someone else's dependent, then he IS a dependent. The only thing he'd get is the non-refundable part of the AOC, if his parents don't claim him. No EIP3. No RRC. No EIC.

Step up basis at death has been under attack as a benefit for "the rich" for a few years. Chances of that still occurring in 41 years is unlikely in my opinion. Not sure about the rest.

Let's say you don't want to do a 3115, you ask when the improvement happen, depreciate it all the years in existence and add the remainder to the basis. You need to add the cost of land also to the bases or list it on its own. Even if it was under his name completely and get full step up basis, you still have to deal with the depreciation allowed or allowable.

I definitely wouldn't paper file anything these days unless really have to.

And please don’t forgot to donate to cover the maintenance cost for this wonderful forum.

Rita, I recently lost my Dad at 99 and at his funeral eulogy I quoted from Billy Graham who once said " At some point you will hear that I have died, don't believe it, I have only changed addresses." May the Lord bless you and your family.

"The IRS strongly urges taxpayers not to file amended returns related to the new legislative provisions or take other unnecessary steps at this time. The IRS will provide taxpayers with additional guidance on those provisions that could affect their 2020 tax return, including the retroactive provision that makes the first $10,200 of 2020 unemployment benefits nontaxable. For those who haven't filed yet, the IRS will provide a worksheet for paper filers and work with software industry to update current tax software so that taxpayers can determine how to report their unemployment income on their 2020 tax return. For those who received unemployment benefits last year and have already filed their 2020 tax return, the IRS emphasizes they should not file an amended return at this time, until the IRS issues additional guidance." …