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I'd say that this is deductible IF the car was purchased by taxpayer in his or her name before the transfer of the gift. If it was purchased directly in the name of the recipient, then taxpayer can't deduct it since technically he/she wasn't the party liable and title was never in his or her name.

I can't provide the source of that from four years ago! Heck, I may not be able to remember what I wore or ate last week. I tried to answer before and lost the whole post, and not sure what happened there! As I understand it, in community property states, if the property is community property (not joint property that was brought into the marriage), then the 100% of the value of that property is included in the gross estate for valuation purposes and doesn't matter if a tax filing is necessary. For this to apply, at least 50% of the value must be included in the estate valuation, and if this is the case, then the spouse uses the stepped up basis on the entire property and depreciation starts over. I believe the references for this are: reg sec 1.1014-2(a)(5) and 1.1014-1, and IRC 1014(a) and 1014(b)(6)

Whether or not the income is subject to SE tax depends on if this is considered trade or business income in the regular course of this entities business. What type of business is this?

You're right! Thanks for the reminder.

If TP sustained a loss that can be documented, if there was criminal intent, and if it can be determined to be illegal under state law, then the TP may be able to deduct this as a theft loss under sec 165(c)(3) and would flow from the 4684 to itemized deductions. Was a police report filed? If this is a 2018 event, with the higher standardy deduction the TP may not have any tax benefit regardless of the facts.

FTFY:

For any that are interested, below are Schedules 1 through 6, wasting a few more sheets of paper for each return printed:

I guess they could try and may or may not get the best result for state purposes here since DE allows itemizing while claiming the standard deduction on the Federal, so I've told my clients to continue to gather their documentation for Sch A deductions. With the added SALT limitation, the DE itemized calculation will now have the added step of allocating that limitation between the state, any local taxes, and the real estate taxes since DE doesn't allow a deduction for its own state taxes and any out-of-state taxes also claimed as a credit against the current tax liability. We had similar calculations all along for allocating those taxes when the Pease limitation affected the return, so nothing easier there.

I guess it depends on the geographic location, income level, and composition of income. A lot of my clients are running into the SALT limitation. I ran projections for all clients and focused on the change in total tax liability compared to 2017. For a variety of reasons, most of my clients showed decreases in overall tax in the $500-$800 range with a handful of clients in the $1000-$2000 and a few of $2000 or more in savings. The reactions were mostly "meh" no matter what the decrease was. There were some that showed almost no effect on total tax because of the SALT limitations and loss of deductions for unreimbursed job expenses, home office and exemptions. Others of my clients are retired with mostly investment income from qualified dividends being taxed at LTCG rates, so they are still ending up with much of that income taxed at the same rate as before and the combined standard deduction + exemptions compared to the new higher standard deduction hasn't had *that* much of an impact to them. The one client with the highest savings is never happy no matter what the result, and he will also be one that will be cross-eyed over the additional schedules.

I agree with this and think it's a waste of money. The last I read, the IRS was already estimating that implementing the new law would cost the agency in the $400-500 million range, and I'm not sure if this postcard was factored into that. What's more, this has a cascade of affecting the states too where every form and instruction that picks up entries from the federal forms or references any line numbers will all require revisions. In the end, we will all get used to it and learn where everything is, but it will slow my review of returns down slightly in the beginning, and I expect some clients will not like the subschedules.

I'd say, yes, the salaries in the northeastern part of MD area definitely going to be less that anything in DC, probably closer to our levels in New Castle County, DE, depending on the jobs. Years ago theirs used to be less but came up to our level with more people either commuting here or into the Baltimore area. The closer to DC, the higher prices and salaries will be, in general. Comparing to my area (use Wilmington DE/ New Castle County), wages are definitely higher in Philly, Baltimore slightly higher than Philly, and DC higher yet. I wouldn't use DC salary levels unless the job is specifically in DC. Jobs at the Proving Ground may require very unique skills that would carry a higher price tag, but unless that is the case, I'd probably use a median salary of ours and Baltimore's. As an example, a friend of ours is a surveyvor whose company did some work there on gov't contract and charged more, not because of any unique skills but more because of the requirements imposed on them by the government. Also, if your client doesn't already perform other government contracts, taking this on could also require them to have a higher level of financial audit and insurance too, and factoring those costs into the contract may make them noncompetitive.

Google and I are your friends. Found the selection for the one to IRS.gov site. See page 52 here: https://www.irs.gov/pub/irs-prior/i1040gi--2010.pdf

yes References: IRC 32(c)(2)(A)(i) and Treasury Regulation 31.3402(g)

Will there be a "long form" in addtion to this postcard, or is this it with the use of subschedules for the many items that appear to be missing like Sch C and passthrough income? It does, however, have the line for the QBI deduction, just nowhere to enter the income side! It also has no lines for Sch D, 4794, Sch E income, state refunds, or other income.

Image above was from this NY Times article.

Correct, dependents don't get the new full standard deduction. From Rev Proc 2018-18 on the IRS site: I found it on this page on IRS site. Scroll to the section for "Income Tax" and look for that Rev Proc that contains the inflation-related amounts.

Below is a link to the IRM that agents use to determine if an amended return such as this that is filed outside of statute will be processed or denied. The sections that pertain to your amendment are sections 21.6.1.5.5 through 21.6.1.5.7 https://www.irs.gov/irm/part21/irm_21-006-001r#idm139996536576528

Thanks Terry. My Drake wasn't specifically affected, but the update did remove my setting telling the computer that the duplex function was installed so it removed that functionality from my print dialog box, and as soon as I saw that I knew what had happened. I think that Windows updates removing custom settings has been a common complaint for a while now, including some privacy settings, and it makes me wonder what else reverted back to MS' default.

I've been waiting too. Thanks for posting, Jack. So happy for those of you that were able to get there.

What Alabama has is not a flat tax system. It still has 3 brackets, even if they top out at a very low level, and it also has all kinds of deductions, credits, and exemptions.

I agree with Sara. My reasoning is that I don't believe that a child has an insurable interest in the parent's house, and I also believe that the insurance proceeds should have been paid to the estate. When a parent dies the insurance coverage dies with him or her, and the estate or beneficiary must obtain new coverage. Even if formal accounts aren't set up in the name of the estate, an estate still exists and must be dealt with. In this case, it sounds like the insurance was paid directly to the child bypassing the estate account, but I believe this should be treated as an inheritance of the funds. Along that line of reasoning, I feel that the child can not claim any casualty loss; that would also be for the estate to deal with. I've never dealt with this issue in my practice. Maybe others here have and will answer with something different.

I agree with rfassett's post above that you need to know those facts before we can help. Then, there's this bit of confusion that I'll answer in a general way below that may, or may not, apply to your client's situation depending on what you know and tell us in answer to rfassett's post: For this or any other entity where the year has a beginning date other than the 1st of a month, the instructions for Form 2553 are clear on this, and I believe (don't have a cite for this) the revocation (if this is a new entity) would follow the same pattern and date. If your client has formed a new entity with a beginning date of 4/14/18, the 2 months would end on 6/13/18 , and 15 days after that would be 6/28/18.

From a link in the "contact us" section, this is the general page with lots of links for tax pros: https://www.ncdor.gov/taxes-forms/information-tax-professionals and this one is the specific link to Tax Practitioner Priority Service for NC with phone numbers and what is needed from the tax pro in order to discuss and resolve issues: https://www.ncdor.gov/taxes/information-tax-professionals/tax-practitioner-priority-service-tpps