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I'm having issues with responding to IRS letters with amended worksheets And payments and clients getting their second certified letter as nothing is posted from 12 weeks ago!! Time to go on hold and call...

The IRS has several very old computer systems that don't talk to each other. It takes awhile for any information to make it to all the systems. If you have the canceled check, relax. Don't send it to the IRS. The last thing they need is more incoming mail. Just wait a couple months. It will likely solve itself.

Yes. Also I have had problems from 2015 stating that they received the payment for 940 and 941 but didn't receive the reports even though they were mailed in the same envelope. I think IRS is having a computer glitch.

Terry has it correct. In a noncommunity property state, the husband would retain his basis that relates to his half, and then he gets the stepped up basis at 1/2 of the total FMV, and depreciation starts over from the beginning on the inherited portion. I think the code sec you are looking for here is 1.1250-3(b)(2), but check that for sure. I'm on my tablet right now and is not as easy to look up to verify. As far as ATX, I don't know that there is any easy way to handle this. You'd have to reduce each of the existing components' cost, accumulated depreciation and NBV by half, and then add in the other half of each component that is inherited. For the components that still have depreciation deduction available to take, you will probably have to override the calculations because the depreciation should be a full year's amount prorated for the period before the death. It would be an incorrect calculation to use a sale date if there are any assets using a half-year method, but those using mid-month would be closer to accurate. Also, for the inherited portion, check me on this, but I think you can use the DOD as the starting date to calculate the expense. However, if sold within a 12-month period, the taxpayer would get long-term treatment, so that is something to watch out for with that date of death in the system as the "acquisition" date. I think I'd attach a note of explanation of how and why the cost and accumulated depreciation were reduced by half due to the spouse's death and how the year's depreciation was calculated.

Pacun I respectfully disagree. Below is a section from Pub 551 Basis of Property. Yardley CPA, I see you are in PA and I am assuming the rentals are not in a community property State. I would take some time to research a bit further but everything I have looked at leads to the same example as in the pub. There are also examples of how to begin the depreciation on the new basis as well. Based on your statement of two properties being 20 years old, I am assuming they are not depreciated out. However, the depreciation taken before the death of the spouse will be used to determine the new basis. I have not used ATX for a number of years now so I can't help you with the proper way to handle it. Maybe Jack or someone still using ATX will chime in and help. Property Held by Surviving Tenant The following example explains the rule for the basis of property held by a surviving tenant in joint tenancy or tenancy by the entirety. Example. John and Jim owned, as joint tenants with right of survivorship, business property they purchased for $30,000. John furnished two-thirds of the purchase price and Jim furnished one-third. Depreciation deductions allowed before John's death were $12,000. Under local law, each had a half interest in the income from the property. At the date of John's death, the property had an FMV of $60,000, two-thirds of which is includable in John's estate. Jim figures his basis in the property at the date of John's death as follows: Interest Jim bought with his own funds—1/3 of $30,000 cost $10,000 Interest Jim received on John's death—2/3 of $60,000 FMV 40,000 $50,000 Minus: ½ of $12,000 depreciation before John's death 6,000 Jim's basis at the date of John's death $44,000 If Jim had not contributed any part of the purchase price, his basis at the date of John's death would be $54,000. This is figured by subtracting from the $60,000 FMV, the $6,000 depreciation allocated to Jim's half interest before the date of death. If under local law Jim had no interest in the income from the property and he contributed no part of the purchase price, his basis at John's death would be $60,000, the FMV of the property.

I have a spreadsheet for my passwords too. I'd never be able to remember all of them. And some require changes every 3 months.

According to the ATX Blog, they will be requiring complex passwords plus secret questions with the coming Tax Season's software. There was an IRS Security Summit earlier this year attended by Tax Software Providers and State Revenue Departments where the participants agreed to implement these security related changes. There is more detail about this on the ATX Blog.

I detest all of their garbage. If I could get away from using QuickBooks or having any of my clients use them, I would be ecstatic.