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"Appreciated property" is defined as “any property if the fair market value of such property on the day it was transferred to the decedent by gift exceeds its adjusted basis.”

I don't know for sure that it wouldn't be challenged, but I would not advise the client to do this. As Marilyn said, I wouldn't want to touch this.

It may be written as a "buy-out" but is still merely a dividing of marital assets where the dividing of cash is either not exactly equal and is used to balance out the other asset values being unequal, or it is for some other reasoning so that both parties will agree to settle.

Don't forget about adding back the depreciation. I, for one, wouldn't touch this. If you owe, you owe! I have had several sales of rental properties that didn't turn out so badly.

I don't think that tracing would come into play. The code is clear on what the inherited basis of this rental would be under this client's scenario. There is nothing to be gained by this transaction. It would cost the client money in terms of transfer taxes and legal fees to gift to the father, and then more in legal and probate fees to settle the estate for the solely owned rental to pass back to the son...all to end up with the virtually the same basis as before. The code section this falls under is IRC sec 1014(e). It requires that the donee survive for at least one year after the transfer and limits tax-free transfers to a terminally ill person and the step-up. IRS also ruled that this applies to property in a joint revocable trust funded with assets that were held by the grantors as tenants by the entireties. Some history: 2001 - EGTRRA repealed sec 1014, and a carryover basis position was implemented under IRC sec 1022. This applied to decedents passing after December 31, 2009. Sec 1022 treated basis of property received from a decedent as if a gift with basis equal to the lesser of the decedent’s adjusted basis of the fair market value as of the date of death. 2010 - TRA reinstated the estate tax and fair market value basis at death provisions, and repealed the IRC Section 1022 carryover basis for decedents passing after 2009.

Dividing up marital assets in a divorce is NOT buying an asset at FMV from your soon-to-be ex.

Hi folks, The server move I mentioned last month will begin soon: You'll know it's in progress when the forum is replaced with a static message, and you'll know it's back up when the message is gone and there's an update on this post. I've done a trial run of the migration and although it went smoothly, I expect a few bumps over the coming weeks as it starts getting real traffic. Thank you for your patience!

Thank you to all who responded. The OP talked the client into claiming an office of 600 sq. ft in an 1800 sq ft. house, so the business use is 33.3% I asked the client if he could justify regular and exclusive use of his entire basement for use in administering the farm operations and he responded "of course not!" I think I can talk him into amending the office to a more reasonable 250 sq. ft, in which case we can amend both returns and still leave the 401-K payment intact since we will also reduce the other expenses for the office from 33.3% to 14%. Ringers

https://www.fincen.gov/boi https://www.fincen.gov/boi-faqs https://www.fincen.gov/boi/Reference-materials https://www.fincen.gov/boi/small-business-resources https://www.fincen.gov/sites/default/files/shared/BOI-Informational-Brochure-April-2024.pdf

I went ahead and ordered the PRS for 2024. It ended up at $799 plus tax and processing fee. You receive a $300 credit against the returns. $44 for individual, $76 business and $16 payroll. It's definitely worth it for my Corp, personal and freebee family.

@jklcpa Assuming the father lives for 1 year, do you think the transaction survives scrutiny by the IRS if the OP is carried out as planned by the taxpayer? Tom Longview, TX

IRS could invoke the Step Transaction Doctrine. Tax Advisor has a nice article on it - https://www.thetaxadviser.com/issues/2021/may/step-transaction-doctrine.html If you don't like links (like me) here is a brief overview. The IRS may apply the step-transaction doctrine, a rule of substance over form, in a variety of taxpayer circumstances to deny tax benefits derived from a series of transactions that should more properly be treated as a single transaction. The courts have developed three tests to analyze whether the step-transaction doctrine applies to a series of transactions: the end-result test, the interdependence test, and the binding-commitment test. Under the end-result test, if the separate transactions were component parts of a single transaction intended from the outset to produce the ultimate result, the step-transaction doctrine would apply. Tom Longview, TX

This year's addition of bulk 1040 extensions was a huge timesaver, too.

Yes, the macros are a fabulous tool. Highly recommended.

Thank you for all your hard work for us!

Not questioning the settlement per se, but rather if there is something IN the settlement where, for example, his larger share of investments was designated as because she was getting the house. If there is wording specifically stating the house as his reason for getting more investments, that could be a de facto purchase of his part of the house, increasing her basis. TIA to all for answers; I'm just going to tell her she gets to exclude $250k, their joint basis from purchase, plus any major upgrades done while they/she owned the house.

Dad got back to me; situation is different from what I understood from grandfather. BB Yacht Club scholarship (even though check was written by BB Church). Family is NOT members of the Yacht Club. Offered annually to all graduating seniors in the DEHS Band. Essay contest with 3 prizes in the form of a check. My client won 1st place of $5,000. Check was made out to him personally with the memo " A BB Yacht Club Member's Name Scholarship." (Member wanted to support HS music.) No other paperwork. No mention, verbal or written, on a restriction on the use of funds. Knowing this family, though, it was no surprise that they worked the DD Tech to split the funds between 1st and 2nd semesters, applied to student's account via cashier's check. Dad did keep photos documenting all the process, if I need them. I think dad is saying the funds were used for tuition.

A few things I had done some country blocking with .htaccss on the old server, but never felt confident that I had a complete list of IP ranges The new server is running nginx, so no .htaccess Cloudflare keeps the traffic from even seeing the website, since they manage DNS and issue the challenge before a request to the server is made Aside from the country blocking, they're doing other bot detection magic, plus I'm adding custom web application firewall rules that are specific to the forum app. I'm a fan of doing as much of this as possible at the proxy, but I also have nginx rules set up for anything that gets through.

I switched and have had no issues that couldn't be resolved with a quick phone call. I did the practice returns when I first tried it and by the time tax season started for the most part I was up and running at about the same speed as ATX. It just gets a little getting use to, but overall I am very pleased.

I've just set up rules to issue a captcha challenge for any visitor not from the US or Canada to help with the bots and spammers. I'm interested to know if anyone on the forums gets caught up in those--if not, I may block traffic from outside North America entirely. I wouldn't normally do something like that, but this is a very US-specific site. Can anyone think of a reason not to?

Alright, everything is moved and at first glance, things appear to be working normally. A lot has changed behind the scenes--more than I'd normally like to change all at once, so please report any issues or broken features you encounter.

I agree with virtually everything stated so far in this thread. I too switched to Drake in 2012 and never looked back. It takes a little getting used to because it isn’t forms-based, but forms based software is way over-rated (especially since forms-based software still relies upon worksheets to a significant degree). Drake is great software and it still amazes me how stingy Drake is with memory. Startup is rapid, operationally it’s nimble, and backups are lighting fast. One hint if you switch to Drake. As soon as you get comfortable using it, spend some time learning how to construct “macros”. You can use them to design a lot of customization to automate numerous repetitive and routine tasks.

But, then, why won't they talk to some of us who might know the answers?

They don't come to us before. Before the divorce. Before dividing assets. Before dividing children. Even my own son left all his tax return copies that I uploaded to my portal for him to give his lawyer, so his lawyer saw nothing about their partnership, nothing about the tax returns before his ex quit working, nothing about all the monies they took out of his Roth to run the partnership and to live off while the ex's TIRA kept growing, nothing. Sorry, tired and cranky today!