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Why would you? I assume you have the closing statement from the client? So long as you have the relevant data to accurately compute the gain and the §121 exclusion, why would you intentionally answer a question on the return incorrectly? Am I missing something where the software requires a 1099S to record the sale of a home? Tom Longview, TX

It's not a choice. If distributions are made, income must be passed out to the beneficiaries. And if it's a final return, the capital gains and losses will pass out on the K1 too.

I don't think I've ever answered that question in ATX. If I don't get a red error, I don't mess with it.

Enter "INHERITED" in the acquisition date field and force long-term. I had one like this just recently, and no way was I going to track down all the charities for EINs and give them a K1, so I just gave K1s to the human beneficiaries, but in my case it was just to pass out capital losses.

Pacun, I guess I didn't understand what you meant by IRS getting everything together in December. Sounded like they were predetermining everyone's income and withholding. Of course they issue refunds to fake returns, but that has been reduced a lot because now they don't issue refunds with refundable credits until later in Feb, when employers' filings are in the system and they can match with the tax return. We had an interesting fake W2 in our office last year--a handwritten W2 from a city. Now there are a lot of small cities in the state, but I don't think one of them has issued handwritten W2s for a couple of decades! Needless to say, that return didn't get filed, at least not by us.

mcbreck, I said if this was the estate's only asset and has been sold, the money should be distributed. You are bringing up other scenarios of other assets out there somewhere. The two year rule is the IRS's, not mine. It's easy to explain that it took that much time to fix up the house or empty it out or whatever. I don't know how one would explain that the proceeds just sat around in the estate when all it's other business was finished because the executor didn't get around to writing the checks.

I agree it should be treated as an asset purchase because the transaction happened all at once. Just allocate the purchase price to the assets and start depreciation over.

I was filing a late MD return with only an IRS transcript. MD asked for copies of the W2s, so to mock up a W2 to feed the bureaucracy, I had to call MD and ask THEM how much MD withholding there was on each W2. I think I just edited a PDF of the IRS transcript to add a line for MD withholding and MD processed the return. And, yes, that does sound like the basis for a Monty Python sketch.

I once texted my son that the family would meet at Peppy B's for dinner, and the auto corrected message he got said pepto bismol.

Nol worksheet for 2021 is now updated.

I never intended to answer a question incorrectly. I'm asking what is the downside to doing that? Assuming the client says they didn't receive one, but actually did...if you check "No", is that an issue? I currently have a client who "doesn't remember" receiving one. I checked no on the return but was just wondering the ramifications if he did in fact receive one. I assume the IRS is looking to match the sales price to the amount reported on the 1099-S.

I always ask the client to check to see if a 1099S was issued. If in doubt I will record the transaction without checking if 1099S was issued.

https://tscpafederal.typepad.com/blog/2022/03/will-the-irs-destroy-30-million-unprocessed-tax-returns-again-this-filing-season.html https://www.treasury.gov/tigta/auditreports/2021reports/202146064fr.pdf p8-9 of the report (p12-13 of the pdf)

Right, but since the partnership terminated for tax purposes, I think Rev Rul 99-6 says that he made an asset purchase. Eager to hear your thoughts on this. I haven't had to do this before. Thank you for having this conversation with me. I'm truly grateful.

Thanks, Judy @jklcpa. It's what I figured - but of course this was a DOD over a Christmas holiday weekend and markets were closed day for like four days straight. And there was a huge jump in stock price on the stock that was sold by the executor, too. Got to over-thinking it and needed a hand-hold to extricate myself.

You are in very good company

MassDOR is famous for demanding proof of withheld tax from the Mass Teachers Retirement system. Who administers that system, sends out the payments, and withholds the taxes? If you said MassDOR, you'd be 100% correct! So they ask retired teachers to prove to MassDOR that MassDOR withheld the tax they say they withheld. One poor lady they demanded the same thing every year for about four (or five, or six) years, when I finally got a POA from her and lambasted them for harassing her. Politely, but I reamed them one. They did not ask the next year...

Geez. Now that I've thought this through, I feel like a complete idiot for posting this. Sometimes I can't see the forest through the trees. I know that never happens to anyone but me :(.

I believe they could, but I think what the others are saying is it would most likely not be the best tax move because of the tax rates the estate would pay in addition to the NIIT. We may not have all the info to make that judgement, but I tend to agree that with what we have to work with, passing the income to the beneficiaries seems like it will produce a lower tax to them. Tom Longview, TX

Thank you. I can't believe I didn't see the forest through the trees. Essentially then he made an asset purchase, and his basis is his purchase price; no 754 election needed. Agree? I need to tell him that he can't use their old tax ID number. Any other thoughts? I really appreciate your quick response and advice.

It's a tossup who gives better tax advice a realtor or a barber? Assuming the previous LLC filed a 1065, that tax entity ended on the day the sale closed. Which leaves a SMLLC which is a disregarded entity.

This proves why DIY software can be dangerous. It takes a tax professional to know what the return is supposed to look like and catch these data entry errors. To me, the most important part of tax prep is looking at the return when it's completed to be sure everything makes sense and is where it's supposed to be. Believe me, I am not looking for new business and rarely take new clients, and I would be beyond bored if all I did was easy 1040s. (At this time of year, is there such a thing?) Lots of folks could easily do their own returns with no problems, but EIP and ACTC and premium tax credits and on and on make that less likely for many. As I've said before, at least half of the returns I do have something missing, and if software doesn't alert the DIY folks who knows what they're missing out on. Like attempting your own electrical work or plumbing, it's important to know what you don't know and turn to a pro.