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OP says Client was the Beneficiary. If that is the case, cousins don't get a 1099R, nor do they get to roll any amount into any IRA if they get a gift from the Client. The IRA beneficiary designation form is the only thing that the 401K administrator is going to look at. They will not honor a will or trust document if the beneficiary designation has been made by the decedent. There is the human side to this. The client wants to honor the Aunt's wishes, but that wish cannot trump what is a pretty cut and dry situation from a tax law standpoint. Tom Newark, CA

Sorry, Pacun, we aren't going to discuss this here. We know the rules on business use of the home, but I foresee this topic quickly devolving into politics, so this topic is being locked. Better to lock it now before the ruckus starts up and everyone's panties are in knots.

I only update when I open the program and there is an update. Or I update from within the programs. I barely read emails and if they contain links, I really think about that email before I click on the link. My rule is: If I will sleep well after refusing to click on a link, I don't click it.

More details are needed. I don't think there is any capital gain. If you are thinking this partner has been relieved of a liability you are not thinking correct. All general partners are fully liable for all partnership debt even after termination of the partnership. He may still be personally liable to banks or other partners. Just because there is a negative book capital account does not mean there is a liability, it could simply be from partnership losses that were not allowed by the partners individual tax return due to outside partner basis. If he made a contribution to the negative account (to make zero) it would not be a taxable event but would simply increase his outside tax basis. It could be that all partners have an equal negative capital account from losses of non-recourse loans. This is partnership accounting not corporate accounting. Remember a partnership is nothing more than two or more sole proprietorships. A negative equity account of a sole proprietorship does not create a capital gain for the owner.

Well... maybe and maybe not. she has an outside basis to consider. Partnership losses would not have been deductible if she didn't have outside basis and she may have outside basis. That book basis on the partnership may be immaterial. Partnership agreement and Outside basis rules.