Burke

OP sounds as though he is reporting K-1 income information to another country? If so, use Form 1116 on US return, IMO.

IRS recent update now says dates are 7/15 first quarter, 7/15 second quarter, 9/15 and 1/15/21.

I make it a firm rule that I do not even touch any new trust returns, UNLESS I have a copy of the trust document. Without it, you have no idea how to deal with the items that need to go on the trust return, including who the beneficiaries are. Her former bank who was handling the return and investments would surely have this. Have her get it.

In my above post, I mentioned separate entrance requirements for my community. In actuality, that is a Real Estate Board requirement which applies to all licensed brokers in the state. I am not familiar with state regulatory requirements for financial advisors but they may have them too. Same may go for attorneys.

Another thing he needs to check on, especially if he constructs a separate building, is how his local city/county treats a business in a residential neighborhood. They may have restrictions, prohibitions (especially if it is a place where clients come), boundaries & setback regulations, rules on signage, type of construction requirements to conform to neighborhood zoning, or separate taxes which need to be paid. He will need a building permit, etc. and may need to get a waiver from the local authorities. Everything is added to basis when construction is done, so may come into play on depreciation schedule. An office-in-home is just that. An office IN the home. I know in my community for a real estate broker, for instance, any home office MUST have a separate entrance for clients.

I have an issue with the penalty calculation on VA. Taxpayer underpaid during 2019 and it is calculating penalty correctly. However, when I go to create efile, I get a red warning that this form has to be attached as a pdf file due to "one or more exceptions is being claimed." NO exceptions are being claimed, but it is populating on page 1 and part 2 with last year's tax liability. Is that the problem? I tried removing it from page 1, but it still shows on page 2 under First Exception, and when I tried to remove it from Page 2 (had to override), the message still appears. This exception does not qualify as last year's liability is more than this year's. If I delete the form from the return, the penalty goes away entirely. I don't remember having to ever attach this form as a pdf file before, even earlier in this year's tax season. Is it new?

I am filing all extensions with no money as they have until 7/15/20 to pay and I usually don't have the paperwork to figure out what they may owe. The extension covers the 3 months to avoid the late filing penalty. At least one client is waiting to fund IRA until 7/1/20.

Well, somebody knows something. How do they know about breaking the lease and repaying the lessor? They know who the lessor is. Who is sending you an email and how do they know what the income/expenses are? I wouldn't do it if details of expenses were not furnished. If any "improvement" was made to the land, it needs to be depreciated. Somebody knows what it was because they paid for it. If "they" (whoever they are) stop paying the rent, believe me they will be contacted by the lessor who probably will produce a copy of the lease. They know who the management company is. They get a check, so they know the name of the issuer and the bank account it is drawn on. You would be surprised how much you can find out about these things on the internet. A copy of the will should be filed in the court of the county in which the original owner died, no matter how long ago. If it was a testamentary trust, that info about location of the farm is in it. And ownership of the farm would be recorded at the county for real estate tax purposes. Somebody is paying them. Somebody is paying to do the tax return. Who? I don't buy the theory that "nobody knows anything." This is the sort of stuff I would love to get into and it looks like everybody now has the time to do it. It doesn't seem like you have enough information to sign off on this and I would certainly convey that to whoever the current trustee is.

THANK YOU, ABBY! I had no idea you had to check that in Global Settings. I thought the check-off on the Election form in the return would do it. Makes sense now that I think about it. Obviously, this has never come up before and I have been an ATX user for many, many years. It worked just fine. What you don't know will kill you. & DANRVAN. (Although this is not farm/ranch property). Good to know, however.

Research of IRS capitalization rules tells me a fence is considered a land improvement. This category is depreciated over 15 years. However, when I input it on the Fixed Assets schedule it is "bonusing" the entire amount in 2019, even though I have checked the Election to NOT use Bonus Depreciation on 15-yr property. Do you know why this is happening? I don't want to expense it this year!

Never mind. I figured it out. I was putting the EIN in the Service Provider/Acct No. box instead of FEIN above it! So used to it being there on a 1099R, I guess. How stupid. I discovered this when I read another post on this Forum about single-clicking on the error. I had been double-clicking and it was taking me to an unrelated worksheet!

Credit is calculating AOTC just fine and appears on Form 8863 and 1040. However, when I go Check Return it has an error (red) because this info is missing on Question 4, Page 2 of Form 8863. I cannot override. EIN is showing just fine on the Input worksheet for this schedule. Why is it not carrying over to Page 2? Anyone else have this problem? Had this same issue on an amended return for 2019 with LLC, so I just wrote the EIN on the form since it had to be mailed anyway.

OP does not disclose whether other assets are in this trust which are income producing, so any rental loss not used to offset other income stays inside the trust and may produce an NOL carryover. What was the purpose here? If the rental is the only thing in the trust, why didn't they do an LLC?

You and Lion are correct. Mother got 1/2 step up on basis at Father's death in 2011. OP says Mother qualifies for 121; but daughter will have long-term capital gain for her share.

Life insurance DEATH PROCEEDS are not taxable to an estate on Form 1041 (which calculates income tax) except for certain interest earned from date of death to the date benefits are paid. A form 1099-INT will be issued for that. As others have said, it is an entry on Form 706 but we probably don't have any clients now which exceed the threshold. (In the olden days, yes, it came into play when the threshold was $650K.) Perhaps Max was thinking about the proceeds of a policy which is CASH SURRENDERED, and it exceeded basis. For that situation, a 1099-R would be issued for the taxable income portion and it would be reported on Line 8, Other Income. This might be a situation that could occur in certain trusts where the trustee cashed in the policy. You have to differentiate between the two types of payouts.

On Page 2 of 8863, the EIN of educational institution is not populating even though it is entered on the form input screen.

I would love to know HOW to post anything on the official forum. Used to be able to send an email under Contact Us. No more.

I got that too on a 663 Election. I just had the fiduciary sign it (note there is no line for it to be done on the election documents) and kept it with my files. I have done many of the 663 and 645 elections in prior years, and never had anyone sign them. If they signed the 8879, it should encompass all information on the return and any schedules/statements.

Is there a link to this yet?

I absolutely hate 8283's. Same old information over and over again. Clothing & HH Goods. I note a previous post from JohnH saying he set up master forms for these, but he uses Drake. ATX has input worksheets. Do any of you use a master form for these? Or combine receipts to the same donee institution into one entry? I usually do and just type in "XX trips." I recently got a return done by a CPA and he input every single receipt separately which meant 4 individual 8283 schedules.

Please see my post above. I did not type it in the correct place. Haven't been on this forum in quite a while and stuff has changed. jklcpa note - I fixed it by moving the reply to outside of the quote box.

I just did some checking. There IS such a thing as a disclaimed interest in a trust. But it can get tricky. Note that a disclaimed interest in an estate is treated as though the beneficiary predeceased the deceased. Therefore, the executor follows the terms of the will as to where the assets go as a result which is why I said "contingent" beneficiaries. Also, disclaimers must be in writing, delivered to the executor/trustee, and cannot specify what to do with the money. The other beneficiaries do not have anything to say in the matter. Again, these things are covered by state law and that needs to be reviewed.

You elect a fiscal year for an estate when the first return is filed. So that means your deceased client's estate tax year ends June 30, 2018. You can file the return anytime after that up to the 15th of the 4th month following, or October 15, 2018. IF you want a further extension, you must do so prior to October 15. Then you get MORE time to file. Many people file for an extension using the calendar year; especially if they do not yet know whether to elect a fiscal year or not. And that is okay too. Filing an extension does NOT select a fiscal year, and you are not committed to a calendar year by doing so. Only filing the return does that.

I think you handled it correctly. Sometimes people try to pull shenanigans to shift income to another party to avoid taxes, increase government benefits, avoid losing Medicaid, etc. etc. It's illegal. It is treated as though he got it, then gifted it to another person. He could have reduced the gift by the tax he had to pay, which was his prerogative. There is such a thing as a disclaimer, but it applies to estates. In that case it goes to the contingent beneficiaries. I never heard of it applying to trusts. You need to research state law on this to see if it is available in your state.