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Yes, the 1231 gain from box 9 should appear on the 4797 in part 1 The amount in box 8c that is unrecaptured 1250 gain flows onto the worksheets for Sch D. It may or may not be a flat 25% tax on that number. Because it is unrecaptured, meaning that the entity used a straight-line method of depreciation (no excess of accel deprec over SL that would be taxed as ord inc at a flat 25%), other items may come into play in that calculation to determine the tax on that, but basically, yes, it is separated out with the potential to be taxed at 25% If you want to see more explanation, this page has a straightforward explanation with an example. https://www.taxcpe.com/blogs/news/recaptured-and-unrecaptured-real-estate-rental-section-1250-gain I'm confused about your statement about putting the stock redemption on Form F. I would report the stock redemption on Sch 8949/D like the sale of any other stock investment. Was any other paperwork or calculations provided to the shareholder that detailed how much of the distribution pertains to liquidation of the stock? Were there any earlier distributions during the year that weren't in liquidation or was it all distributed at the end, was it all in liquidation, none as a dividend? Below is a link to another article, this one hits the highlights of this subject. Look under the heading "Determining Character of Gain or Loss" and you'll find an explanation in the last 2 paragraphs of that section of how distribution(s) that exceeds ending AAA will be a dividend if the S corp had AE&P: https://www.thetaxadviser.com/issues/2008/apr/understandingthetaxconsequencesofliquidationtoansshareholder.html One last point is about the basis of the shares to use, specifically because they were acquired by gift and may result in a loss. Someone more knowledgeable than me will have to answer this because I don't know off the top of my head. Do the normal rules for basis in gifted property apply here when the gifted property has declined in value and that results in a loss so that the basis you start with may not be donor's cost but fair value instead? And then run through the basis adjustments that flow from the S corp activity over the years? Sorry, I do not know the answer, and maybe I'm not on the right track with this part of the answer.

https://www.irs.gov/payments/pay-taxes-by-electronic-funds-withdrawal See under "Cancellations..." on the above-linked IRS page. It includes a phone # for the dept that handles this.

For those here that choose to not respond or not see another's posts, I'd suggest scrolling on by, sitting back from the keyboard, taking a break from the forum, or using the IGNORE function. There is no need to make a flounce-like public announcement of withholding answers in future, and stooping to the level of a personal attack on another member is totally unacceptable. Since Edsel seems to have reached a conclusion regarding his original question and the posts have turned to nastiness, I'm locking this one down. I'm sorry for the ugliness, Edsel. If you have any other questions, please feel free to post . . . . . . as long as it isn't politics.

We do have others here too that fail to provide all of the relevant information so assumptions are made in an attempt to help out as best we can with our answers. Sometimes those incomplete questions are the result of not knowing what one does not know, that the preparer is immersed in the current problem without stepping back to see the larger picture, or that the first answers are correct but that lead to further discussion. I think we should remember that what we work with frequently may be an easy question to answer, but to someone else may be a confusing topic or insurmountable problem to solve for the client. I think most of the time we do eventually get to the correct answers, and sometimes we wander off on tangents that end up off-topic but can be an opportunity for learning nonetheless.

Questions regarding GAAP are not prohibited and certainly should not be equated with the reasons for this forum no longer hosting political discussions or commentary. With this site being a tax forum having a diverse membership, the field of those knowledgeable or qualified to answer is already narrowed down, and people help when they have the time and to whom they choose. It is also the offseason and a holiday, and some of the answers to the questions you posed are not simple or quick. Furthermore, chiding and goading our membership into answering usually doesn't work too well around here. Since you continue to find this forum's rules distasteful, and you feel our members do not provide you with answers quickly enough or that meet your needs, perhaps you should seek answers from another source, a larger and more active forum, or possibly one of the Yahoo Groups.

Jim is allowed to take up to $100K out and tell the custodian to pay it directly to a charity as a QCD , so YES, in your example Jim may take out $3,000 and call it QCD as long as he meets the age requirement, it comes from an IRA, none of it is a return of basis or from a rollover that was funded with after-tax dollars, and it is made payable directly to the charity. Jim's 1099-R will be issued showing a normal distribution of $3,000, and will be reported on line 4a (what used to be 15a). Then, if the full $3,000 was handled correctly and meets all the criteria above, Jim will report $-0- on line 4b (the old line 15b) with the letters QCD next to that line indicating that it's not taxable. So, your answer is "YES", but I wouldn't say the AGI is "lessened" by the extra because, if handled correctly, it isn't included to begin with. Hope that helps to clarify. The extra amount taken as QCD over the RMD doesn't count toward next meeting the distribution of any future year's RMD, but it may reduce the future RMD that is calculated since the account balance has been reduced by taking a larger distribution now than was required.

No worries. We've all been there, and I've eaten my share of egg, more lately than ever. Someday soon I'll explain why I've been MIA more, not that that's all bad, and have had some fuzzy thoughts on some answers too.

I moved a new member's post from "Help" to General Chat the other day, and purposely didn't leave a link in hopes that you all wouldn't get those messages. Sorry. I've also deleted a couple of spam messages from Russia & China recently, so if you see them before I do, please use the report function that will generate an email message to that something needs attention.

I don't agree with either of those statements. The code is clear that it is calculated on adjusted depreciable basis, not original cost plus improvements. It's also clear that it's as if placed in service during the year of change. sec 1.168(i)-4(d)(3)(i)(A): (A)In general. If a change in the use results in the MACRS property changing to a shorter recovery period and/or a depreciation method that is more accelerated than the method used for the MACRS property before the change in the use, the depreciation allowances beginning in the year of change are determined as though the MACRS property is placed in service by the taxpayer in the year of change. Here's the part where it says that adjusted depreciable basis is to be used to calculate the depreciation deduction for the new activity, so it would be incorrect to calculate on original cost plus improvements without reducing it by deprecation already taken. How will the software accomplish the correct calculation on adjusted basis if the existing amounts are carried over? sec 1.168(i)-4(d)(3)(i)(B): (B)Computation of depreciation allowance. The depreciation allowances for the MACRS property for any 12-month taxable year beginning with the year of change are determined by multiplying the ADJUSTED depreciable basis of the MACRS property as of the first day of each taxable year by the applicable depreciation rate for each taxable year. In determining the applicable depreciation rate for the year of change and subsequent taxable years, the taxpayer must use any applicable depreciation method and recovery period prescribed under section 168 for the MACRS property in the year of change, consistent with any election made under section 168 by the taxpayer for that year (see, for example, section 168(b)(5)). If there is a change in the use of MACRS property, the applicable convention that applies to the MACRS property is the same as the convention that applied before the change in the use of the MACRS property. However, the depreciation allowance for the year of change for the MACRS property is determined without applying the applicable convention, unless the MACRS property is disposed of during the year of change. See paragraph (d)(5) of this section for the rules relating to the computation of the depreciation allowance under the optional depreciation tables. If the year of change or any subsequent taxable year is less than 12 months, the depreciation allowance determined under this paragraph (d)(3)(i) must be adjusted for a short taxable year (for further guidance, for example, see Rev. Proc. 89-15 (1989-1 C.B. 816) (see § 601.601(d)(2)(ii)(b) of this chapter)).

All good advice above. While the QCD can exceed the RMD, also keep in mind that only amounts that otherwise would have been included in taxable income may be QCD. In other words, the QCD can't include basis or other nontaxable amounts from after-tax rollovers. Also, can't do this from employer plans.

Oops, I see Bart asked "when". Daughter's acquisition would have 2 dates: the date of the gift for the first 50% and remaining 50% at the DOD. For tax reporting when sold, it could be broken into the 2 pieces, but since inherited property (the 2nd 50%) is always treated as long-term, I'd probably just report it as one transaction and keep track of the basis in the event it is questioned. Bart didn't say if that return was filed or not. If not, file the gift tax return for the year of the gift, use up some of the unified credit, and have the executor sign on behalf of the deceased. There should be no penalty.

I think child's basis is the sum of: For the gifted portion - it's either 50% of mother's basis if it would result in gain, or FMV @ time of gift if it would result in a loss, plus cost of 50% of any improvements between the time of gift and DOD, plus accounting for 50% of any other adjustments to basis between gift and DOD (one example: gov't eminent domain transactions), plus the remaining 50% inherited portion @ FMV I do also think that the mother's 50% would may need to go through probate. (edit: changed to "may", as Max said, depending on state law)

Marie didn't specify if the manufacturing and farming activities are both on the same return, and I haven't used ATX in a while, but even if it is, this is not going to be as simple as manipulating the existing asset by moving it over to the farming activity. The asset(s) involved should be taken out of service from the mfg activity and reentered for the farming activity because its initial depreciable basis will be different than it was in the former activity, and this may possibly require some overrides or additional entries for it and other assets in service during the year. The preparer needs to read the section I linked to carefully and not rely solely on what I'll summarize next, but here goes: the asset basis for depreciation is the adjusted depreciable basis, not its former depreciable basis in mfg activity in service in the year of change, and use a short year if the farming activity started later, this asset isn't eligible for bonus depreciation or sec 179, and its basis is excluded for purposes of determining whether any OTHER assets acquired during the year are subject to the mid-quarter convention rules. (not sure if ATX has specific input to handle this automatically) Finally, under sec 1.168(i)-4(d)(3)(ii), it is possible to ELECT to determine the depreciation as if the change had not occurred at all.

My full BoA credit card # is printed on my paper bill and is also on the pdf version I can access through the site.

I agree with Abby, and if the payroll is fairly consistent from pay to pay, the accrual probably doesn't materially change that expense or the overall reporting anyway. If that is the case, I would book accruals and reversals only for final year-end reporting.

Here's section 1.168(i)-4 that covers change in use and describes the method in your client's circumstance. The change is assumed to be on the first day of the tax year, and you will use the adjusted depreciable basis. The page at Cornell Law that I linked to has additional clickable links for definitions if you need them and describes the proper reporting when the new MACRS method has a shorter life than before, or a longer one.

Yes. Husband and wife can each give $15K to each party, and if the recipient is married, then it is possible for a married couple to give another married couple up to $60K in one year without any return required. Two separate checks from husband and two more from wife per recipient couple. As another alternative if the client doesn't want to involve the recipients' spouses for those whose total gifts will exceed $30K, the donor and wife could each gift $15K this year and the remaining $5K in 2020 if all the parties are willing to wait a few more months.

I believe it is standard in all 50 states that only CPAs can issue audit and review financial statements, and in general, non-CPAs are limited to only compilations or products that don't rise to the level of a financial statement. Edsel needs to check his home state of TN's regulations, and KY's if he is physically conducting business there.

I wonder if it's because I left a link in General Chat when I moved that post to the Drake subforum. Would you mark the Drake forum as "read" to see if that stops the message from appearing and let me know? Thanks.

You quoted me in error. I am not the one waiting to hear from the IRS, and the original poster has not visited this site in 2 1/2 years. I googled her name and she is listed as a tax preparer with a "consumer alert" flag saying that the information is out of date with the notation that this person may no longer be practicing or might not have renewed her PTIN.

You may be able to find his DOD by Googling for "his name & obituary".

See pub 502 for more information. Medical expenses paid to foreign providers are deductible for those expenditures that meet the same criteria used to determine deductible medical expenses paid to U.S. providers, and these must be legal, not cosmetic, etc. Make sure that the expenditures meet the general definition of medical treatment for the diagnosis, treatment, cure, prevention, mitigation and provided by a medical professional. I'd question whether this is legal and treatment being administered by a medical professional since this is out of country, and other countries have different regulations over medical personnel. Is this treatment not available in the US, or is it available but the patient is travelling to see an expert in this particular disease?

Evan is correct, it is 4980D. You should also read IRS Notices 2013-54 and 2015-17 that explains why the reimbursement is problematic. This was commonplace to allow tax-free reimbursements prior to passage of ACA, but once that law went into effect these reimbursements were themselves deemed to be group plans that may have been reimbursing premiums for health insurance that didn't meet all of the requirements of the ACA, and that is the reasoning for the penalty of up to $100 per employee per day. The tax-free aspect also went away with the ACA, and these reimbursements would have to be included in compensation subject to payroll taxes. Your client is probably not handling that properly either. Here are two articles that explain the problems of the old HRAs and talk about the newer QSEHRAs: This one from NOLO legal encyclopedia in layman's terms that may help you. And this one that also talks about QSEHRA's and has links to the two IRS notices also. You'll have to use the second link above for the IRS notices or google those and look for the the ones that direct you to IRS.gov. They are coming up as pdf files on my tablet so I can't easily link to them here.

Yes, this is correct that it can be deductible on Schedule E. The default is that this borrowing would be considered "home equity debt" but may be uncoupled from that definition by "electing" to use the interest tracing rules. That election is made by reporting it on Schedule E. I would strongly advise to NOT comingle the loan proceeds with other personal funds so to have a clear and unambiguous trail of use. Reference is §1.163-10T(o)

It looks great. I do agree with Abby Normal about the size of the picture though. One odd thing that I ran into was that my AV blocked the links shown at the right side of the main page for "More Information" and all of the items under "Helpful Links" with a popup message that a certificate in the certificate chain was expired, but those same pages were perfectly accessible when I used the drop down menu under "Resources" in the heading area.