Christian

I sent it off today. Thanks for your input.

A daughter has been handling her parents affairs for many years and has a power of attorney for both of them. Her mother died in February of this year dying intestate. Since the daughter has a power of attorney for her father can she sign as surviving spouse for the couple's refund or will I need to attach a 1310 showing her as the administrator of her mother's estate ?

A client of mine passed on last year. His son is his executor and called requesting me to file an extension for his father as he lacked some needed documents. I efiled it and with some surprise received a rejection the Service advising that his Social Security number is blocked his account indicating he is deceased. Having never filed an extension for a deceased individual I guess this is all I can do. The estate will receive a refund so I doubt it will matter.

As it happens the mother bought the property some 25 years ago and only the Lord knows what she paid as she is now deceased. So I will need to come up with some reasonable valuation and that will be the daughter's basis. There was no gift tax done. Folks in this neck of the woods do this all the time and when property is sold they have no clue what it was worth. I have not done one of these in a long time and ,of cuss, I have INADVERTENTLY misplaced my notes from the last time around. The $33,600 value was the county value for property tax in 2012 and not a professional appraisal as I was led to believe. So I will go with the value I can establish her mother paid for the land 25 years back. What do y'all think?

A daughter was given a lot which had an appraised value of $33,600 in 2012 by her mother who had inherited it from her husband some years before. She sold the lot for $16,000 in 2017. I am thinking the daughter has no basis (her basis is zero) in the lot and she owes capital gains tax on the sale. However, she may be able to claim the lot's value when inherited by her mother and that is my question. Any input will be appreciated.

I appreciate all of your responses. The parent's have wills willing all property to the other. I have pretty much talked him out of his idea explaining that if the purchased lands are deeded in both names his mother's half interest would be valued at 1/2 the purchase price at that time and he could incur significant taxes. I have not run this by my own attorney but I am confident this would be the case. In my own family we had one of these split valuation deals that proved to be a real mess.

Fortunately for them they have long term care insurance and adequate assets to take care of that issue. There is really no need for the farm to be sold but heirs get itchy ideas. The son is for lack of a better word a "pantywaist" and now is not employed so you get the idea. Folks work their entire lives to achieve and build something. Next generation comes along and thar she goes.

An older couple for whom I have worked for years is now in their 80's and both in assisted living. Their son who lives out of state has power of attorney and comes back often to look after things. The couple both had jobs while married and now get pensions from that work. They have a farm some of which the husband inherited and other sections which were bought during their long marriage. He is now in really bad condition and sadly likely will pass on not to far off. His son had asked me about the best way to sell the farm and I advised it should be held until after both parents were gone to use the increased value and avoid tax. As with no few prospective heirs he is having other thoughts and wonders if his mother could sell it instead. She will inherit it but my concern is the value of those parts purchased after their marriage. Would not the land purchased be one half hers already and be valued at it's costs when purchased years ago thus setting up a split basis for tax purposes? If he elects to do this I am going to advise him to settle this point with his attorney but I am wondering if any of you Virginia folks have encountered this and what you might think of it.

I vote with Pacun . Gail's remark brought back a memory in which a very conservative older client argued with the state over an $8.00 penalty for some six months.

Lifetime Learning Pacun. I was on the phone with a guy from a Liberty tax office. My days of multitasking are about done sorry to say.

Oops. That message is applicable to the Liberty credit only.

On computing the American Opportunity Credit for a client a message in bright red states the taxpayer is ineligible for the credit because her agi exceeds $66,000. On the other hand the full $2,500 credit is computed on the 8863. Is this an ATX software error? My reading indicates the agi limit is $90,00 for 2017 for a taxpayer filing head of household.

Do you need to fill out the ATX bank info sheet along with the Form 8888? I am also concerned that since their accounts are in their individual name if a refund amount issued to them as a married couple will not be rejected by one of these two banks. Does anyone have any experience along this line ?

I should have known the IRS had a form for this. I fill out Form 8888 right?

As noted in an earlier post I need to divide a refund between husband and wife on the federal return. I just checked the bank information sheet provided by ATX but see no line for indicating which amount goes to which bank. The husband will receive a lesser amount in order for the wife to get her half of the Virginia refund. Can anyone provide any info on this or will the IRS ONLY spilt the refund in half?

Your idea occurred to me after I sent my post. I'll simply increase her federal refund by 1/2 of the expected Virginia refund reducing his federal by that amount. Who wants to bet me he will balk?

A couple has separated and the husband would like to file jointly for 2017. His wife will do so if the expected refunds can be sent to his and her separate bank accounts. I can do this with the federal refund but I don't know if Virginia allows this. The local commissioner is clueless on this point and the department's help line is constantly busy. Do any of my fellow tax folks in Virginia have an answer for this one? I have never encountered this ever before.

A lesson on Southern grammar. In a room of 100 folks Y'all may very well mean a part of the 100 whereas All Y'all denotes the entire bunch.

I feel sure it will require a new form which will CLARIFY the matter.

Well after the assistance of one of our members I was able to prevent the client from paying any AMT. Some day when I have a clearer head I will try to understand the mechanics of this alternative tax system. Perhaps I can find a class at my local community college that will clarify the workings of this tax. Clearly I will require the assistance of some college person to make it clear.

For my part I will shed no tears for it's demise.

Yes the ATX form is not populating yet. I'll likely have to compute it myself.

I was of the opinion a large increase in capital gains over prior years would trigger the additional tax but do not understand the reference to a credit for succeeding years. If he pays some 8 thousand dollars in AMT for 2017 does this create a credit of some type for next year in which his gains will likely be much less. Looks like I've got to do some research as I have not had this one up until now as no other of my folks ever encounter this.

Most of those I serve have no need to be concerned about the AMT. One client of mine has income which fluctuates based on received capital gains from a host of mutual funds he holds and pays his taxes by estimate. We do a workup this time of year to adjust his final payment to reflect this. To date he has never had to pay the AMT. He had large payments from his holdings in 2017 much more than 2016. It looks as if he may have to pay a chunk in this tax even though he uses NONE of that long list of deductions in the rules. For those of you who deal with this particular tax routinely my question is this. Will a large increase in capital gains from one year to the next trigger this tax in and of itself?

Good Lord. I thought my nephew had a son problem.