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Tom, there is no step-up, and no recalculation of the GP % or other figures used to report the installment sale. The recipient "steps into the shoes" of the decedent and continues to report the installment sale in the same manner.

From pub 537 - Transfer due to death. The transfer of an installment obligation (other than to a buyer) as a result of the death of the seller is not a disposition. Any unreported gain from the installment obligation is not treated as gross income to the decedent. No income is reported on the decedent's return due to the transfer. Whoever receives the installment obligation as a result of the seller's death is taxed on the installment payments the same as the seller would have been had the seller lived to receive the payments. However, if an installment obligation is canceled, becomes unenforceable, or is transferred to the buyer because of the death of the holder of the obligation, it is a disposition. The estate must figure its gain or loss on the disposition. If the holder and the buyer were related, the FMV of the installment obligation is considered to be no less than its full face value.

From Experience: Personal....had to consult a specialist in this specific field; then we decided how to proceed Professional....client went to somebody else (a tax lawyer) who handled his foreign inheritance & tax return for 2012; it seems lawyer screwed up and client had to pay a major penalty (now an ex-client, so no follow-up); moral of the story....it's not a learning experience for a "general lawyer" or even a tax attorney unless he's experienced with this My advice.....don't get involved. I can give you a referral for the lawyer I used if you want.

NECPA is 1000% correct. Huge liability issue and tons of penalty and jail time. Tax Attorney or let client do his own.

Joanmcq is a member here, you can pm her. I sent you Tim's LinkedIn contact info.

Unless you feel very comfortable as a computer tech person, do not attempt what is listed in this article. Most tax accountants will do more harm to their system and network trying to upgrade. My recommendation is: 'Do not upgrade to anything higher than WIN7 Pro. "If it ain't broke, don't fix it." "A word to the wise is sufficient."

From everything that I have read or learned in classes, you should probably send the potential client to an attorney that is experienced in these dealings. If they are delinquent, there are large penalties. I have in my engagement letter that if my client's know or think that they have FABAR or FATCA reporting, that they should contact an attorney that is experienced in these matters. The attorney can then hire me, if necessary. It's just too much liability for me to want to take on.

MF Global, where John Corzine oversaw the THEFT of billions of dollars of sacrosanct, legally-required-to-be-segregated customer funds (which he illegally used and lost). The courts not only backed this theft, but also backed the clawback of MORE money from those who lost everything to illegal activity.