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Drink the 18-year yourself and let the staff have the twelve-year.

3rd! I leave a few of my favorites out on my shelf so clients know what to get me for gifts. Recent client asked about selling his house [abt 10 min discussion] He sent me a gift pack of 4 Johnney Walker bottles.

"The Postal Service explained in a press release that their blue bins have become hot spots for criminals looking to steal residents' identities as well as their mailed checks. The crimes tend to happen at specific times and on specific days. The agency stated, "The biggest variable enticing these criminals to steal are customers depositing mail into blue collection boxes after the last collection of the day or during Sundays and federal holidays." So what should customers do? The USPS advises, "If customers simply used retail service or inside wall drop slots to send their U.S. Mail, instead of depositing it to sit outside overnight or through the weekend, blue collection boxes would not be as enticing after business hours to mail thieves for identity theft and check-washing schemes." My largest client had 8 or 9 checks stolen from a Blue Dropbox during the middle of the afternoon of a weekday about 2 months ago. The USPS has removed the box even though it's in front of a small retail complex by a very busy highway. Two of the checks were washed, but fortunately their bank caught them when the perps tried to cash them.

Before she became my client, which is many years ago; she inherited a $600,000 house from her father and sold it for approximately $400,000 just to get rid of it because it was standing empty. They wipe some of it out with CG; the most prominent one two years ago when they sold a Rental property. They still have a lot of CL left. Even more astonishing; WI only allows a $500 CL per year. They are a nice couple who are secure as one can be these days. They have invested wisely and live a happy, but not ostentatious life. They winter in AZ and come home in April. I have to say that when they first came to me, I was as intimidated as I have ever been. I thought they were way out of my league. That is no longer true. They trust me explicitly and I value them as clients.

The problem, @BrewOne, is all the clients for whom we have absolutely nothing *except* a request for an extension. If it's someone who always owes, it's one thing, and we can recommend some type of payment. If it's clients who see-saw back and forth between owing and getting a refund, not so much. We file extensions even with no information, if we don't have anything. What I won't do is use a dartboard to decide what people should pay, just to make it "legitimate" because as far as I'm concerned, a figure pulled from a dartboard (or ceiling) is just as accurate as zero.

1250 gains are treated differently than 1245 gains and not subject to depreciation recapture in year one of installment sale. 1250 is sort of a hybrid, taxed at a maximum capital gain rate of 25%, thanks to the strong lobby arm of the real estate industry.

I disagree. 453(i) (1)In general In the case of any installment sale of property to which subsection (a) applies— (A)notwithstanding subsection (a), any recapture income shall be recognized in the year of the disposition, and (B)any gain in excess of the recapture income shall be taken into account under the installment method. (2)Recapture income For purposes of paragraph (1), the term “recapture income” means, with respect to any installment sale, the aggregate amount which would be treated as ordinary income under section 1245 or 1250 (or so much of section 751 as relates to section 1245 or 1250) for the taxable year of the disposition if all payments to be received were received in the taxable year of disposition. What you are describing normally happens with 1245 property. If 1245 property sells for less than original cost but more than basis, it is ordinary income and goes direct from 4797 to 1040, bypassing Sch D. Since generally 1250 property is depreciated with straight line it is a gain and not ordinary income. The confusion comes because it is taxed at the higher of marginal rate or 25%. However, it is still a capital gain and goes from 4797 to Sch D before showing on 1040. If the TP happens to have net capital loss from a mutual funds or such, they will decrease the 1250 gain. They would not decrease the 1245 gain I talked about earlier because that is ordinary, not capital, income.

79-113 says extension could be invalid if the tax liability is not properly estimated. It does not make any reference to paying.

I completely understand--but the Direct Pay method can also put the burden on them for the amount they pay. Yes, they may come back with, I don't think I owe anything. So if you file a 4868 with zeroes, at least get in writing that you warned them about accuracy and possible penalties. I know it gets old saying "It's an extension to file, not to pay."

You are assuming my/our clients have the sense God gave a goose and not email their own sensitive data. At which point, all we can do is save it to secure drives, delete the email *and* attachments, and instruct the client to do the same.

Which is why you never email sensitive client data.

I had one where I thought that for sure - until the client sold a patent some years later. Wiped out the whole kit and caboodle of the loss!

They hide when I look for them. Somehow the key words I pick for searching never get me the pieces I need. Thanks!

By the time you read my reply, bottles might be empty.

Code section 1014(a).

Catherine- if the IRS would just use words like "poof" we would be able to do our research a little more efficiently!

I was tacking this onto a thread and thought it probably deserved it's own. Have heard preparers argue about entering all zeroes on a 4868 and although it might be better than doing nothing, Rev. Rule 79-113 (yes, it's an old one) was recently brought to my attention. It essentially says that the extension is invalid if the tax liability is not properly estimated. The burden would be on the taxpayer to show that they did not have evidence at the time of the filing that discredited the estimate. I basically tell anyone who phones just wanting an extension to go to Direct Pay and, under 'Extension', pay what they think they owe. The IRS FAQ on extensions states that this payment counts as having filed an extension and you would not be on the hook for an invalid extension.

I've heard that it can come up during an audit, that an extension would be invalidated then if filed with zero owed or an unreasonable number. I don't know if one instance would move an auditor to then open a "preparer project" to look for more zero extensions from that same preparer. I'm filing more than I'd like to this weekend. I think I've heard back from everyone who's going to make a payment. But many more clients have asked for extensions without further response to my queries. Their numbers are not on my ceiling. I figure it's like basis -- if they didn't give me what I need, then it's zero.

Per 4868 instructions, IRS considers that if at least 90% of tax is paid in by that extension date and if tax bal due is paid when return is filed, then that constitutes reasonable cause for not paying with the extension and late payment penalty won't be assessed. Sorry on my phone and having trouble going back and forth to the docs.

I can't even imagine how that could have happened?

I used ChatGPT's free version to ask some tax questions and the results were very good. All our tax research will be AI driven fairly soon, and personally, I've been waiting for this my entire career.

What time do we get started?

Would any of them know the difference?

It turns out there are 23 different holidays today: My favorites are, Husband Appreciation Day, National Laundry Day and National Rubber Eraser Day! Who knew?

Columbus return is not necessary if proper city taxes were withheld. You can file one if you want, but we never file them. Unless they reside there of course

And, Inherited, is one case where she could possibly have a LT Capital loss. I have a client who will never outlive her carryforward $3000 a year loss.

How this for a response? “Glad to hear this good news. You’ve learned a lot about QBO, which may help you get your info together in a timely manner next year. Meanwhile, attached is your extension, because I don’t plan to stay up until 3am working on the revisions. “

I guess the solution is to select electronic payment VS paper. If selected properly, run efile file creation and then you will be asked when you want to pay and HOW much you want to pay. Amount to be paid is auto populated BUT you can select any amount that is under the amount. For people that don't have money to pay, I ask them to pay $1 so that they know I filed when they are debited $1.

Good time to do a cost seg

Thanks. I had looked in that section and made a change but it wasn't showing up. Turns out, I was changing it in another section. I kept poking around and found the correct section (thanks to your help!).

Yes, from the "Setup" drop down menu: Choose Communications Editor,then on the left side, click the + to the left of Federal Return Paragraphs that will open up all the available places you are able to modify. Double click on Federal Balance Due paragraph, and more options will appear to the right side, On the right side, click the + next to Federal Results Section if it isn't already expanded Doubleclick the selection that says "Federal Balance Due Paragraph" and the editor will open the editor where you will be able to modify any of the payment option paragraphs that Drake uses.

@JJStephens I never, ever want to live in Ohio! Tom Longview, TX

Similar topic and discussion from late last month:

Thats what I thought too and without a reference. Client inherits the property at FMV date of death. That's their basis and start over.

I've been trying the same thing in Drake without success. I do know if you have a signature pad, you an sign that way. I set up the rubber stamp feature but still cannot have Drake automatically place the signature. I've dated the 8879 when preparing as well and have never been questioned. Maybe my lucky day is coming

Poof. New owner, new basis. Start from scratch. You will have some depreciation if it is continued as a rental. Tom Longview, TX

I'm just as leery of the known companies.

Before I put my foot down about "no jpegs allowed" I had one client fuss at me about how it was too much trouble to scan - just blow up the picture sent. So I blew up the picture, took a screenshot of the pixelated nonsense, and sent it to the client asking them to tell me what the numbers were. I got scans later that day.

What I love about phone camera pics is that on about half of them the right quarter of the page (the side with all the numbers) is cut off. And then, the icing on the cake: "I sent you a picture. Can't you just enlarge it?" Somehow, they just don't get that enlarging the pic doesn't magically add the stuff off to the side. Eye roll.

The step up resets the basis for the heirs, and they will not have to worry about recapture, that is, unless the property is still rented after the husband's passing and depreciation had started over once title passed to the beneficiaries. If still rented after husband's death, depreciation for the heirs would start over using the stepped up basis.