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  1. Since it appears surviving spouse has cashed the check and doesn't care about the withholdings, then why not? In that case, it's probably not worth filing a 1041 to deduct the $600 exemption, additional tax prep fees and income distribution back to surviving spouse. I would be tempted to report other income at net, as that is all she received. Curious how that would work. CP 2000 to deceased and letter to explain it was reported by surviving spouse?
  2. That was my question. No, I was not implying that she kept any legal ownership. The quitclaim would transfer legal ownership, but it is possible she retained a beneficial interest until death. In that case the house would pass through her estate.
  3. A beneficiary has equitable ownership. An equitable owner who makes the payment is entitled to deduct mortgage interest, so why not?
  4. If mom held a beneficial interest then there is a incomplete gift per case law. If that is the case then house is considered part of mom's estate and step up basis kicks in. I read into this that house was sold after mom's death, was that the case?
  5. Looks like a gift from the parents since they inherited the condo.
  6. Might have case there. But why fight over it when she expected zero payment to begin with?
  7. I had that thought, but where would you draw the line? Although she might have set up to due this on a volunteer basis, once she accepted the $$,$$$, it became a payment for her services. The excess over reasonable was a big fat bonus.
  8. Yes. The presumption of former employee rule would not apply here, since she is not performing the duties for the former employer.
  9. Possible life estate due to beneficial interest? Did mom live in house "rent free" until death? Did she pay property taxes, pay for upkeep? Those are factors tax court looks at in determining if the residence is included in the decedent's estate. Living rent free is a big one.
  10. Does she know that will count as unqualified use if she eventually uses it has her personal residence and later claims section 121 exclusion?
  11. I am not sure that is quite right. There are two separate tax year rules here. First is the greater than 1/2 year residency test specifically for a taxpayer without a child under 32(c)(1)(A)(ii). Secondly is the full year test for all taxpayers under 32(e) which you mentioned. I have been under the impression that 32(e) does not apply to 32(c)(1)(A)(ii). That appears to be the position taken by the IRS. The wording of question 4 of step 4 of the EIC question worksheet refers to the entire calendar year.
  12. I have never heard of a situation like this addressed before. I can't think of a case to compare it to. I thought about that, but at first was thinking more along the line of a "nonprofessional" fiduciary or PR. However, there is a difference here since the former employee was paid for her professional skills, whereas a PR can do very little for big $$$. I can see factors against SE including: 1. she did not expect to get paid, therefore no profit motive. 2. it was a one time sporadic activity. 3. she did not make any billings, track her hours or other
  13. That sounds right but I can't say for sure how it works in NJ. For an Oregon citizen living abroad and qualifying for the Earned Income Exclusion, his Oregon based investments are not taxed by Oregon.
  14. There is no entry for fmv, just show distribution at BV.
  15. The distribution is reported on K-1 at book value, basis to the partnership immediately before the distribution. IRS suggest, but does not require FMV on K-1.
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