Ranger

Wells generally do not qualify for section 179. But off the top of my head, there might be an exception for a well used to water livestock.

"You can also file as an ERO" What form do you use for that?

Can someone clarify the steps needed to e-file form 941? First of all it looks like form 8655 needs to be filed and I am listed as Reporting Agent. Does the IRS send out a notice that authority has been granted? Once authority is granted, it looks like a PIN is obtained by filing 940/941 EF. Is that it? Thanks.

Can anybody verify when the tax period for a Credit Shelter Trust begins? It appears to begin on the date of funding vs. date of death. In this situation, there is leased farm property and investments. So for the 14 months between DOD and funding of the CST, the income would be reported on 1041 for the estate? In regards to depreciation, would the estate claim on 1041 until funding of the CST? Then the CST would pick up where the estate left off? PS Thanks Jainen for your response to me previous post.

My questions concern a credit shelter trust. Husband died in June of 2011. 706 was recently filed and the CST was funded. Assets included investments and farm property which is leased out. Now surviving spouse owns 1\2 of assets and the other half goes to the CST. From what I have been told, all the income from the investments and farm will go straight to the wife. If so, then form 1041 will not be filed for the CST? My second question is in regards to depreciation of the farm property which is now jointly owned between the surviving spouse and CST. Can the wife take the CST’s share of the depreciation directly on her return since she has life tenancy in the property? Thanks for any thoughts you might have or references where I can research this more.

Thank you for your response Michael. It is a revocable trust, so there is incident of ownership and would be included in the estate. I believe it would be treated like a any other jointly held property and one half would be included in the estate of the first spouse to die.

My question concerns a life insurance policy held jointly by husband and wife (family trust) where the surviving spouse is the beneficiary. If husband dies first, would half the proceeds go to his estate?

Thank you for your responses.

Client sent me an accountant copy created with 2009 QB’s. My 2011 QB Accountant version says it can’t be opened and client must send me a regular back up copy and they will have to manually adjust it when I send it back to them. Is this something new by QBs to make everyone buy the current addition? I don’t recall this problem in the past.

Barrel racing can be an expensive "activity". $3,200 probably does not begin to cover the expense. Although this opinion should not be cited for authority; T.C. Summary Opinion 2005-97 is a good example of the position the IRS is likely to take in a similar situation.

Thank you for your response. I will take it.

Self employed trucker is on the road 5 to 10 days at a time. His previous tax preparer deducted the full M&IE allowed for transportation industry. However, since he spends most nights in his truck, I don’t believe he qualifies for the $5 “incident” portion of the per diem as defined by the IRS. I am curious if anyone else agrees. Incidental expenses.<a name="d0e985"> The term “incidental expenses” means: · Fees and tips given to porters, baggage carriers, bellhops, hotel maids, stewards or stewardesses and others on ships, and hotel servants in foreign countries, · Transportation between places of lodging or business and places where meals are taken, if suitable meals can be obtained at the temporary duty site, and · Mailing costs associated with filing travel vouchers and payment of employer-sponsored charge card billings. Incidental expenses do not include expenses for laundry, cleaning and pressing of clothing, lodging taxes, or the costs of telegrams or telephone .

What was the payment for? Did he actually deed over the mineral rights?

Yes, form 8825 is the one to use for cash or crop shares. For partnerships there is no form 4835 to report crops shares. Not knowing the circumstances, I would question whether it is truly a partnership that needs to be reported on 1065.

It was a grantor, living, revocable trust up to the time of his death. After his death, the trustee’s were authorized to handle the assets as they saw fit. A portion of the property was transferred to the oldest son. Under normal circumstances, basis would be FMV on DOD, $300,000. The twist here is that the son also assumed the mortgage on the property, $100,000. A closing statement was drawn up for that amount. I believe the basis should be $300,000. If the transfer had been made from a living person, it would have been considered part sale and part gift. I am not aware of any special rules that apply to a trust.

Client’s father left farmland in a trust. Client and two siblings are trustee’s. Trust transferred land to client that was valued at $300,000 on date of death. Client also assumed a mortgage of $100,000 on the property. I believe the basis in the property to the client is $300,000. Can anyone prove me right or wrong? Thanks.

I am looking for verification on the treatment of a house rented below fmv to family members (daughter and husband). The house was rented to them for the whole year. The worksheet and software both disallow insurance and property taxes but allows depreciation. Does that sound correct? Can disallowed property tax be deducted on Schedule A? Thanks for any comments you might have.

How do you link the home office worksheet to page 2 of schedule E?

Thanks Jainen for digging up my dead and forgotten post! Your reference was helpful as this return has been on hold for further research and additional information.

Client converted $15,000 to Roth (new account) in 2010. So $7,500 will be reported in 2011 and 2012. After conversion, a distribution of $5,000 was taken from the new Roth account. So in 2010 $5,000 will be taxable with 10% penalty. For 2011 and 2012, $7,500 will be included on Form 8606 with a basis reduction of $2,500 for net taxable of $5,000. Does that make sense? Thanks for any comments you might have.

found it.

Can anyone verify if Oregon is connected with federal in regards to the conversion of traditional to roth IRA (½ reported for 2011 and ½ 2012)?

KC, can you point out the section you referred to? Page six of pub 946 say “property placed in service and disposed in the same year.” It makes no distinction between real and personal property. Pub 946, page six: “Even if the requirements explained in the preceding discussions are met, you cannot depreciate the following property. Property placed in service and disposed of in the same year….”

As I understand it, the house was placed in service and taken out of service in the same the year. So the program correctly disallowed depreciation.

For an asset placed and taken out of service in the same year, I believe the depreciation equals zero.