Ranger

Any thoughts?

Client invested in Las Vega condo rentals in 2008 on advice of son. Client quit making payments after management company fell apart and rent dried up. Cost 280,000, put down 90,000 and borrowed 190,000. Basis is about 270,000 after depreciation. Per 1099-A: amount owed = 187,000, fmv =137,00 and box 5 is checked yes. Am I correct that client has ordinary gain of $50,000 (unless insolvency can be proved) and no loss is allowed?

It is my understanding that rejected returns must be resubmitted my Oct 20, is that correct?

Thanks for the reply Meribeth. I thought the "step in the shoe's" method was right but could not find a reference. (Do you have one?)

Client inherited an installment sale contract for a rental house. I can not find any information on how to report this. Do you go back to the original date of sale or date of death for basis? Another question. This was a do it yourself contract: $60,000 sale price, no down payment, $500 month for 10 years, no mention of interest. I am not sure how the imputed interest calculation works. Assuming an interest rate at 6% I ran an amortization schedue and came up with a beginning principal balance of about $45,000. So the sale price should be adusted to that amount? Thanks for any comments you might have.

My wife is looking for a multi function printer combatible with Windows 7. Is anyone familar with the Brother MFC 9840cdw or any other multi function printer that works with Windows 7. Thanks for any advise you might have. Dan

The farm is in the trust and the only source of income for the trust. The trust states that the income will be divided evenly among the brothers after deducting all cost of managing the property. All of the expenses related to the farm (which is rented out) will go on form 4835. I dont see where the upkeep or utilities for the house can be deducted on form 1041. I believe the upkeep of the house is deductible in arriving at the amount to distribute to the brothers. My real concern is the utilities paid by trust for the house which one of the brothers lives in rent free. Could that be considered cost of managing the property or would it be considered distribution in kind. As I mentioned, all the real property will pass to him in five years. Thanks for you reply jasdlm.

Client is a beneficiary to a trust left by his grandmother. There is a small farm with a house that he lives in rent free. The farm is rented out. Client shares net income with his brothers per trust document and he will receive exclusive ownership 5 years after date of death. My concern involves household expenses including utilities and minor repairs paid by the trust. (Client is also the trustee and handles the trust checking account.) I understand that these expenses are not deductible on form 1041. But for instance, would the utilities paid by the trust for the house lived in by beneficiary be considered a distribution? Thank you for any comments you might have.