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At a seminar an IRS agent once told us that the only vehicle IRS believes is 100% business use is a cement mixer.

Are you talking about donating the house to the charity, or keeping title and letting charity use it tax free? If the former see Pub 926. If the latter see this: https://www.law.cornell.edu/cfr/text/26/1.170A-7

I'm thankful for this forum. Sometimes you just need to talk things out. My dogs aren't very good at tax stuff. Although they do like to take the paper roll hanging to the floor from the calulator.

Under imputed interest rules, the $ 2 Million would be the combined total of principle and interest payments for the contract using the AFR at the time the contract was initiated.

Pub 526. Particularly page 12 Giving property that has increased in value

"Tax Court denied HOH status to a taxpayer whose spouse would not move out and therefore slept in her home at some time during the last six months of the year (Hopkins, T Memo 1992-326)"

I always liked the ones who said they’re too busy to keep a log and “if I’m audited I’ll just give the auditor my box full of gas & repair receipts and let them figure it out.” I’d always tell them “The auditor will just hand the box right back to you and inform you that you don’t have a deduction.”

I wouldn't go that far but I get what he means.

To get the exclusion, the instructions clearly state that each spouse must meet the residency requirement. It says nothing about children living there. Looks like your clients will have to pay cap gains tax but, hey, they made A LOT of money on the sale. Don't forget to add selling expenses to their basis. I bet the realtor commission was enormous.

I was just checking this for a possible new client. Per QF, A married taxpayer who is a US citizen or resident during the entire year can file as HOH if all of the following tests are met [IRC Sec.7703(b)]: 1. The taxpayer files a separate return. 2. The taxpayer paid more than half the cost of keeping up the home for the tax year. 3. The spouse did not live in the home during the last six months of the tax year. 4. The taxpayer's home was the main home for more than half the year of the child or .... The child must be a dependent.... It seems that #3 could be the problem in your case. I'm waiting to hear back in my case, not sure when spouse moved out.

@Abby Normal HMMMMM..... Can a Passive Activity be a vehicle from which you give charitable gifts? Rental is passive by IRS definition. I don't see a place on the Sch E for charitable contributions. Even if you could give "rent" to a charity, it would have to be an organization and not for the benefit of a designated person, so I am having a hard time coming back to any way this scheme gets deducted on residential rental property other than gifting the entire property at FMV to a legitimate charity. Am I missing something? Tom Longview, TX

This has always been my understanding. No nights slept in the house (whether on the couch or the bed) for the last six months. Not even 1 bootie call. Tom Longview, TX

No....Married Filing Separately cannot claim HOH. I had to do the research on this same topic this year.

I'm using ATX and I was just curious if there' a central location to enter all Carryover data from the previous year. I have a new client and they have multiple carryover items, Passive loss, qbi, charity, etc. It would be nice if this could all be entered into one place and have specific carryover info linked to K-1s like they link 1099-NEC to Schedule Cs.

That would be nice. But alas, no. Also, most of the time I don't use 1099NEC input forms. Quicker to list on Sales schedule of Sch C or just enter in total.

Sorry for the long post.... Taxpayer formed an LLC in 2021. Came to me in 2022 for their first tax return. No election was made for how to tax (would have defaulted to a SP). Filed a late election to be a corporation and filed the 1120 timely for 2021 showing a loss. In 2023, April 1st or so, they come back to me with a total QBO mess of their books. I can't get the information from them in time to file by due date. Tried to file an extension through ATX, but the IRS rejected. They had not processed the 2553 and so they did not show the LLC as a corp (the 2021 1120 went through efile). So I send the Taxpayer the 7004 and the the voucher to pay the estimated tax with the extension. Certified return receipt. They send a check and the extension form to the IRS on 4/17/2023. In Sept 2023 we file the 2022 tax return. In October 2023, the IRS sends the taxpayers a check returning the extension payment. Taxpayers go online and make the payment the day they receive the check from the IRS. Every bit of the above is documented via email, receipts, software reject errors, etc. Today, taxpayer gets a big fat bill from the IRS for failure to file timely, failure to pay penalties, failure to pay estimated taxes penalty and Interest. I am getting the 2848 right now and will see if I can get a reasonable person on the PPL and get abated for reasonable cause. One of the requirements for First Time Abatement is 3 years of no issues. The return in question was the second one for the company. Year three just went out a couple weeks ago. Can my client get first time abatement in this circumstance? Tom Longview, TX

@Frog I like your dialogue. Sounds like the beginning of a short story. Perhaps, "Applachian Tax Cheat"

Joking about things most will agree are wrong is not funny. I am completely embarrassed at being male, given that not every male fails to give or promote their opinion on matters applying only to a gender we cannot possibly understand. For offensive, I am sensitive to "you" as it was THE nasty word to ever tell an umpire, and I cringe when I hear "off the reservation". Sadly, it is relatively common, in public service even, for someone who acts outside of the accepted norms/practices.

Have a client (on second vehicle now) who always buys the vehicle in the business and pays all expenses of the same every year through the business (vehicle is definitely not business use). I make a journal entry in the books every year moving the vehicle expense to owners draw. 14 years running. We never discuss it. Don't ask/don't tell. I'm not hiding it. The client does his own daily entries in QB.

It's just common sense that you can't claim the deduction, without claiming the same amount as income, because you have no basis in the deduction. The win here is that you can claim expenses against the rental income, and maybe get it down to very little income or even a loss. I don't see any issue with that as long as it's FMV rent to an unrelated 3rd party.