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DANRVAN

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  1. So it sounds like dad passed away and mom received a stepped up basis (100% if community property state). Then she created life estate and house was sold while she was still alive. So children, including your client, received part of proceeds based on their interest, which should have been allocated per life expectancy tables. Since it was a completed gift, children receive a share of mom's basis. Mom's basis should be prorated in the same manner as the proceeds. So children receive a portion of stepped up basis from death of first parent in this case.
  2. I agree with Lion. You have no idea if this taxpayer would benefit from becoming an S-Corp. Most likely not if business and personal account is intermingled.
  3. Exactly. Winding up the business takes time.
  4. You are correct, I said that backwards; left brain vs right brain. If he had 5 vehicles but one was strictly used as a spare when one of the other four was not in use he could continue to use SM.
  5. Looks to me like they should be deductible, but aren't you past the three year window to amend a 2018 return?
  6. Did you get the transcript?
  7. I have been using ATX for about 20 years and have no reason to switch.
  8. Your software should take care of that Pacon. With ATX you use the fixed asset module to input the actual cost data. Then it allows you to toggle back and forth between actual cost and SM on a year to year basis. Does he use all 6 at the same time? The rule states you cannot use five or more simultaneously. So for example if he had five vehicles, four used all the time but kept one as a spare he would be allowed to continue using actually expense method. Not sure what you mean here.
  9. I am curious if any other assets are held by the LLC. Is there a business activity operated by the LLC?
  10. This is not clear to me. Sounds like there might have been a completed gift if children were on the deed and received proceeds from the sale. Mom received step up basis but is still alive? Do you mean from husband's share?
  11. It appears you are referring to a single member LLC. An LLC has no meaning for tax purposes, it is a creation of state law. So for tax purposes it does not make any difference if the investments are held under the client's LLC .
  12. OP indicates parent is paid rent by insurance company.
  13. Looks like I misunderstood. So what you are proposing is a distribution payable by a note to shareholder #4? I don't believe you can call it a distribution until the shareholder is actually paid cash.
  14. Are you proposing a loan to shareholder # 4 and call it a distribution? A loan to SH #4 would need to be repaid, so I don't see how it could be classified as a distribution.
  15. Then the entity has a second class of stock and not eligible for S Corp status.
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