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On the pufferfish. Wow. Really, wow. Seven minutes. Pufferfish designs

Thanks all. Very, very helpful. So I guess it turns out I did the right thing ... even if my rationale for why was a bit vague!

Oh, I think that the value would be minimal because it's a start-up with no name recognition, no established customer base, closely held, it's probably limited to one small geographic area, etc. I don't even think a gift tax return is required between H & W anyway. Husband would pick up wife's basis. Again, not familiar with the state laws though.

What about the wife gifting her shares in the LLC to her husband? The gift would create a technical termination on the date of the gift from a tax standpoint since there would be only one owner after the gift and the LLC would then become a single-member disregarded entity on that date. There should be no gift tax consequences since it is from one spouse to the other. I am not familiar with Iowa law to know the ramifications this might cause, but I do know that Iowa is not a community property state, so this couple is not able to use the provision that says a husband-wife-owned LLC can be a disregarded entity, which I assume you already knew and the reason for your question.

There's also a time element. I don't have any similar now, so from memory, average rental 7 days or less is a biz and not sch E. So, do check on time as a possible exception to rental activity.

Amazing! I've seen many kinds of pufferfish and others on my dives but never anything so beautiful created by one. Thanks for sharing this.

You might point out to the client that per reg 1.641(b) the deductions of an estate are generally the same as an individual. I would also refer the client to reg 1.212-1 that explains when nonbusiness expenses are deductible: (a) An expense may be deducted under section 212 only if— (1) It has been paid or incurred by the taxpayer during the taxable year (i) for the production or collection of income which, if and when realized, will be required to be included in income for Federal income tax purposes, or (ii) for the management, conservation, or maintenance of property held for the production of such income, or (iii) in connection with the determination, collection, or refund of any tax.... (h) Ordinary and necessary expenses paid or incurred in connection with the management, conservation, or maintenance of property held for use as a residence by the taxpayer are not deductible. However, ordinary and necessary expenses paid or incurred in connection with the management, conservation, or maintenance of property held by the taxpayer as rental property are deductible even though such property was formerly held by the taxpayer for use as a home. ******** While the Knight case referred to by jmdaviscpa centers on whether an investment expense is subjet to the 2% rule, it also places the estate in the "hypothetical situation" of an individual in determining how the expense is treated by the estate. If in your client's situation the house was treated as an investment (for sell instead of for personal use) the exenses would be added to the basis. Hope this helps.

Too late to swap out, and I detest flying. Taking Amtrak to Philly - I get out five blocks from the hotel, and no migraine from the pressure changes. And by hook or by crook I will get over to see the Liberty Bell too! But sorry to miss meeting you, my friend.

No, don't remove it. It's good to know we all make mistakes and 'fess up to it. Especially the adjusting the screen thing. My screen is so adjusted, I no longer know what 'normal' is! Thanks, Rita, for making sure we know you are normal!

Judy, you can remove this whole thread if you like.

Haha, no, I didn't reboot, I just had to adjust the screen. I forgot that every time there is an update, I can't see the tabs until I fix it back. Sorry to be an alarmist. OMG...