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Ah, glad to have helped solve the puzzle.

If not the sole residence, the use of a motorhome for business falls under the interpretation of 280A(f) like any other 2nd residence would. Here's an older post from Bradford Tax Institute with its discussion on this matter that some here may find interesting or useful: https://bradfordtaxinstitute.com/Content/IRS-Audit-Questions-Motorhome-Use.aspx

Moderator note: Responses pertaining to use of motorhome/2nd residence for business is a different subject completely than was asked and has been moved to its own separate topic.

Lion answered best that the mileage to and from the island home IS commuting. If the business is from this location, then the business mileage once on the island would be deductible. Documentation is key!

Is there a schedule for details of other items to allocate to shareholders that relates to 1120S pg 4, Schedule K, Line 17d? If not, when you add all of the amounts on the K-1s for that item, it doesn't add up to the amount of net sales on line 1 of the 1120S? Is it possible that there are special allocation %s for this item being carried over from the prior year? Or did you hit an input line in error that is having some effect?

Link to a Drake KB that should help; it describes the calculation and when and why it is needed. https://drakesoftware.com/Site/Browse/17113/1120S-Line-17-Code-AC-Change-Drake20-and-future#:~:text=Line 17%2C code AC on,for Section 448(c).

Yes, just a shifting of assets per the divorce settlement, not any sort of sale or gain/loss to report at all.

Mod note: 2 posts hidden as O/T. Please stick to the OP's topic of 1099 reporting and if non-issuance makes that expenditure nondeductible for tax purposes. Anyone wanting to discuss accepting or paying for services in cash/check v. plastic or any other side issue should start a separate topic of its own.

A practitioner. In another post it said he's been with ATX since 2006 and had forgotten about this site until very recently. Also, I can see the email that confirms that he is a tax & financial professional.

The fact that 1099s aren't issued doesn't mean that the deduction isn't a valid expense of the business, but that the taxpayer isn't compliant with reporting and backup withholding requirements. You may also have clients that have unreported income because some people believe that amounts below the $600 threshold aren't taxable income because the IRS form wasn't issued. I'd suggest that you review the reporting requirements with each of your affected clients that are disregarding the rules and then decide how to proceed ewith those clients, if at all.

I see you are already "following" this topic. There is an additional notification setting too. Click on the icon at top right that looks like a bell. On the box that opens, you should see a gear icon at the top right labeled "notification setting." Click on that to set additional ways the system contacts you with content and frequency. I don't know how often this site cycles through to send those notifications because I don't use that feature.

In the title of the post, he is under 59 1/2. Terry, you will need to complete form 8606, part III for the distribution. Afaik, custodians don't complete box 2 for the taxable portion of ROTH IRAs. Instead, it is up to the taxpayer and preparer to figure that amount.

Terry, your client ending up with the home and ex with the mortgage may have all been part of the divorce settlement. If that is the case, sec 1041 says that a transfer “incident to a divorce” is one that occurs within one year of the divorce and not more than six years from the divorce. Existing basis would shift to the person ultimately holding the property, and because your client owns 100% of the home, then she would report 100% of the sale, basis, and gain. She would also be entitled to the full $250K exclusion if she meets all of the requirements in sec 121.

In general lenders don't rewrite terms because of transactions like divorce or contributing encumbered property to an LLC. Are you sure it wasn't handled through the divorce with an assumption of the mortgage by one and release of liability of the other? The other way would have been to refinance in only the one name.

Exactly!

For 2023, the widow can't file as QSS because the TP died during that year. Her choices for 2023 are MFS or MFJ, but joint is only available with permission from executor of his estate. I would suggest she continue as MFS so not to open up the possibility of her becoming liable for his tax debts. QSS is available to a widow that meets the requirements in the two tax years subsequent to TP's year of death: 2024 & 2025. I have never dealt with CNC status and do not know if that would remove the protection from TP's tax debts that MFS has afforded her since he is now deceased. His tax debt would become a debt of his estate, and any assets should be used to satisfy that debt before she gets anything.

Well, if the estate wasn't cash poor and had enough to pay the tax prior to final distributions, it would have been paid from estate's liquid assets prior to heirs receiving the property and they would have received the net value. They will end up in the same position once they sell, if they sell, the property. From form 706 instructions

No, this inheritance tax is NOT a deductible expense on the estate's income tax form 1041. If form 706 had been required, it could have been a deduction there against the gross estate, but not on the 1041. It also is NOT added to the basis of property. If form 706 is not required, then the basis of the property to the heirs is the appraised value at date of death that is used to calculate the inheritance tax. In the case above, the $440K value will be split between the 10 heirs.

Is this fee the 1% Foreign Estate Fee charged to MD nonresidents owning property in MD, meaning the property in question was worth $4.4 million. Is that correct? If so, this is a fee charged by MD Register of Wills that allows the estate to convey title to that MD property when it is sold or bequeathed. To me, that sounds like a probate fee or fee that allows similar probate-type authority granted by MD Reg of Wills, and I would probably treat it as such. You should do some more research as this is just my opinion. Maybe some of our MD preparers will chime in on this too.

Do you have any PPC guides? If you have the one entitled "Preparing Financial Statements," it covers the various categories and handling of debt securities including its opinion on classifications and handling of sales in the "held to maturity" category.

Yes, upon termination the unused losses of the trust or estate will pass to the beneficiaries via the final 1041 Sch K-1.

Marie, please see the instructions for form 8582 under "who must file," "rental activities", "special allowance for rental real estate activities," and the 5 "Exceptions" under "Rental activities" beginning on page 3 to determine if you should be checking the box on the sch E input for "active participation". As you read, keep in mind that there are differences in the definitions of "active" and "material" participation. If you check the box A as "active" participation, it will not allow any of the loss and should show -0- in col G and generate the 8582 worksheet with 8582 line 1d being -0- and 8582 line 3 being the -50K. Then the bottom of that is the lesser of 1d or 3, allowing -0- loss. Right now I think you have it allowing the default of Sch E, box D, and it is allowing the full $50K loss to show up in col i on pg 2 of Sch E as nonpassive.

Also, is this showing up on Sch E, page 2, UNDER PASSIVE LOSS IN COL G?

That depends. Again, did you include 8582 in the return? Does the partner have other passive income? Does he have other income or gain from this partnership that is allowing that loss in full?