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Oh boy, my first thoughts are these - First, you have to figure out the basis to know whether you're dealing with a gain or loss since the sale price is so low. If a loss then you would report the entire in 2021, the year of the sale. If a gain, was this family cottage ever rented with depreciation taken? Then you'll have the recapture in 2021 and (possibly) no income again until in 2024, but with it being a sale to related parties you need to know if the brothers have already disposed of it before she got all of her money. If they have already disposed of it, then this client must recognize what they realized as if she received it herself. You can check out the IRS Pub that deals with installment sales for more on this. Also, if the transaction results in a gain, then you definitely have to use installment sale reporting which is the default method of reporting. The opportunity to elect out of installment reporting is gone because that election has to be done on a timely filed tax return, including extensions, for the year of the sale. Will this woman ever receive the money from the brother that is technically in default, or will his non-payment ultimately result in the terms of the installment sale being redefined? With installment reporting, it sounds like you are looking at 6252 and Sch D for 2021 to document the transaction on the return with no payments in that year, and then in 2024. If it was ever rented and depreciated, then you possibly have recapture income for 2021 and add 4797 into the mix. If no installment reporting because it's a loss, then only 2021.

She can roll to an IRA without penalty or tax (most likely). She could keep the money in the 401k. I've never seen a firm require you move money from your 401k to an IRA. Substantially Equal Periodic Payments (SEPP) can be set up to avoid the 10% penalty but she'll still owe taxes. She MUST set up the SEPP with the firm and can't just take a distribution. The 1099 gets coded to avoid the penalty if you set it up officially. At a 40 year retirement and a 75% stocks / 25% fixed income portfolio and a 5% withdrawal rate, historically speaking she has a 36% chance of running out of money. (if adjusting the $50k for inflation each year) If you don't adjust for inflation you aren't being honest. I have no clue if she qualifies for SS at 62 and if so how much. That would need to be considered. Medical insurance is going to be a major cost she likely isn't including in her financial needs. Everyone needs to adjust their expectations and timeline based upon their health situation and life expectancy. As an example a friend of my mine retired at 55 because he's about 100 lbs overweight, exceptionally high blood pressure, uncontrolled cholesterol, has had cancer 2x and is diabetic. The odds of him living to be 65 are slim. He retired at 55 and is going to have it all spent by the time he's 70.

Wow!

"Your sister" Knowing this poster's history of mostly posing hypothetical questions, I suspect that this is another one. In this context, "sister" could be replaced by any other name, especially with the title asking how we would advise clients on their options and tax consequences.

"Your sister" I do not get into or offer advice on family member's personal finances. I might recommend a qualified professional if it is a family member I am close to. I was asked for advice by three extended family members in the last two weeks. I likely could REALLY help one, but then again, I would then know too much detail, which would likely hurt the relationship. I also do not loan to family, any money I part with to a family member may be a "loan", but I never expect to get it back, and I absolutely do not want to be involved with their finances lest I get snippy because of what they spend my "loan" on.

You can't take a loss when selling to a related party.

Is this supposed to be a joke?

If you're going to invest half in stocks, why not stocks within her IRA instead of in a fully taxable investment account? Same returns but tax deferral. Or pay taxes on half to convert to a Roth IRA and the other half rolled to a Traditional IRA. Or, 1/3 - 1/3 - 1/3 Roth, TIRA, taxable account, maybe even some in an emergency fund in something very liquid like a MM. Does she own her home; is she likely to sell and downsize? Is she likely to get a part-time job or start a biz? Do you think her tax bracket will increase or decrease during her retirement? You know the tax consequences of all her possible choices. Brainstorm with your client and her financial advisor about all her options to move her funds.

To each their own. Vast majority of my clients pay with check at time of pick-up. A few pay cash, and like MCB I keep that in safe for items I pay cash for and to have emergency money in the case of wide spread internet outage. A few others pay with CC and while I don't show a separate line item, I do charge them a little more to cover the fees. If I had a storefront practice, I'd want CC payment, but since I know my clients very minute risk of being stiffed. I only remember one over 27 years that check bounced and wasn't made good.

Many of my clients have buildings in S corps because LLC's didn't exist in NY until around 1994.

Read this topic through to the end, including the linked article.

Likely the form is acknowledging electronic handling of the check, with the physical check not being saved. I have to wonder if Check-21 makes it presumptive a check can be electronically processed, and such a form not needed. When I use mobile deposit (which is similar to using a physical scan/send machine), the only warning from my bank is to keep the check until the amount is funded. With Check-21, the funding can happen almost instantly, depending on your bank and your agreement with your bank. The business owner is likely/hopefully paying for a competent attorney (not a friend or relative) and has decided it is in their best interest to use the form. What gets me is when someone submits CC information which fails, and gets snippy when, if they do it again, I remind them what they are doing is no different than presenting a bad check, and I am within reason to ask them to pay more, to cover some of the costs of the failed attempts. It is ENTIRELY within the CC user's power to make sure the transaction will go through, even if it requires notifying their card issuer in advance. Every failure costs the merchant their time and processing fees!

Agree with both ILLMAS and BulldogTom above. Also, when you have the amounts pinned down, be sure to issue 1099s for each year the theft occurred. Embezzled funds are taxable income to the thief.

I have to take my hats off to Abby Normal. I should hesitate because there are so many other great people on this board that should be mentioned. I am notorious for my cumbersome phraseology. Often I will ask a question and get responses from good people who, from their responses, are unclear what I am asking. This is my own problem, and not anyone else's. Often I have to repeat myself, and the conversation runs in many directions, very much like a "circular reference" in Excel. Occasionally you meet someone who can perceive what is in your mind - to the extent they know what you are saying before it ever comes out of your mouth. Hopefully, in your years of human experience, you have encountered a few such people. Abby Normal seems to know exactly what I am asking, why I'm asking, as if he is in my own shoes sharing the subject. Not just once, but consistently over and over again. I met this Abby Normal (and forgot his real name) at the gathering at Rita's in 2018, which was a delightful event for myself and my wife. Again, there are a number of helpful people in this community and I don't want to lessen their contributions by not mentioning them. Thanks to all who have put up with my awkward choice of words. Abby, wherever you are, please stay with us...