DANRVAN

9 hours ago, BulldogTom said:

an expense account for the fuels and insurance costs and an offsetting expense account called reimbursed costs from customer to zero out the amounts.

But there was not any reimbursement or expense.  The arrangement and facts, right or wrong, appears that mom pays for fuel and insurance.

On 7/4/2023 at 9:50 AM, Christian said:

imagine what the Service will make of a truck driver with no fuel or expense deductions on his return.

But those are the facts and I would report it that way.  So what if you report $xx,xxx in fuel expenses paid by mom, how will you substantiate for IRS auditor regardless of the gross up of revenue?  It does not change the bottom line.

I agree with others that there is room for future improvement, but I would stick with the facts for reporting.

Is anyone aware of a form to claim a refund for deceased Idaho resident?  I have not found anything on ATX or Idaho Tax Com.
 

On 6/27/2023 at 8:31 AM, Abby Normal said:

Tax wise, It's not a big deal if there was one K1 for one spouse or two K1s split 50/50. The 1040 tax will be the same and there are no SE issues.

This more of a divorce settlement issue. Who gets the corporation? This will be part of the overall property split (you get the corp, I get the house, etc.).

and determine whether it was marital property or separate property of either spouse.

On 6/27/2023 at 6:54 AM, schirallicpa said:

 

The W wants her share - which she contends that without documentation, ownership is 50/50.

If a court agrees - then what do I do with years of tax returns with him as 100% owner.  

For previous years probably nothing.  Just go forward with correct ownership and reporting.

On 6/28/2023 at 9:58 AM, cbslee said:

How about determining stockholders basis?

In a transfer due to divorce the adjusted basis is also transferred.  Covered under section 1041.

12 hours ago, cbslee said:

Did I pass or fail

Top of the class .

13 hours ago, schirallicpa said:

I believe the C Corp will be ineligible for installment reporting if the corp is on an accrual basis.

That was the rule 20+ years ago.  It was repealed and struck from section 453.

13 hours ago, schirallicpa said:

Does the corp have to stay open to continue to collect the payments?  Can the payment agreement be transferred?  Or does this trigger another event somehow......? 

In order for shareholder to receive installment treatment, the corp must adopt a plan of complete liquidation.  The sale of the assets and distribution of the installment agreement to the shareholder (in exchange for his/her stock) must occur within 12 months from the date the plan of liquidation is adopted.  See sec 453 for details.

At this point I think you will need cooperation from XH since the return has been filed and by default the estimate goes to him.

Anything in the divorce agreement in regards to tax estimate?

On 6/13/2023 at 1:11 PM, schirallicpa said:

Client's previous tax preparer depreciated rental real estate over 16 years.

How in the world did they come up with 16 years??!!

23 hours ago, schirallicpa said:

how do I elect over 4 years.

The default is 4 years for a "positive" adjustment.  There is an election to report it all in one year if not over $50,000.

11 hours ago, mircpa said:

retro 8832 for it to be treated as corporation or amend tax return to sole proprietor (Sch C) or partnership

The deciding factor might be whether they paid shareholder wages.

The tax consequences of distributing assets upon liquidation will be different for corp. vs partnership.

Penalty does not apply to distributions taken on or after the date taxpayer turns 59 1/2.   See section 72(t)(1)

14 hours ago, DANRVAN said:

issue 1099 NEC to contractor for his work

On second thought, most likely not a trade or business so no 1099 issued.

47 minutes ago, Pacun said:

The tricky part is if the contractor didn't do any improvements but rather only repairs.

It will either be an expense to sell or addition to basis, but the net will be the same since the property was held for investment.

Report the gross as income and the amount withheld as expense.

For the amount withheld, issue 1099 NEC to contractor for his work.

14 hours ago, Lion EA said:

H's ending capital/basis/etc. is now zero on the last day? And W's is now the combo?

Everything is zero, the entity no longer exist for tax purposes.

For tax purposes, the LLC designation is irrelevant.

The business is changing from a partnership to a sole proprietor and  will need a new EIN.

Since the partnership has been dissolved for tax purposes, the assets (and liabilities) are considered transferred to the partners in a liquidating distribution.

22 hours ago, Lion EA said:

Lawyer has him sign over his 50% partnership interest to W

I wonder if lawyer understands that partnership ceased to exist the instant H transfers to W.

I think it would be simpler to show the transfer of assets form H to W after distribution; rather than transfer of partnership interest immediately before dissolution.  However, the net basis to W would be the same either way.

3 hours ago, Sara EA said:

5-year comment was meant to apply to concession stands. 

correct

11 hours ago, BLACK BART said:

first post starts out with possible 39 years

And most likely is 39 year property unless it can be proven otherwise per reg 1.856-10 (d):

(2) Inherently permanent structure -

(i) In general. The term inherently permanent structure means any permanently affixed building or other permanently affixed structure. Affixation may be to land or to another inherently permanent structure and may be by weight alone. If the affixation is reasonably expected to last indefinitely based on all the facts and circumstances, the affixation is considered permanent. 

40 minutes ago, JohnH said:

on the roller with the edge facing the wrong way…

I was actually able to negotiate that one in my favor.   Now if I could just get the seat to put itself down......

After 20 years of marriage I have come to realize that I am still a HIT;.............. Husband In Training...........

3 minutes ago, Christian said:

and see no way I can deduct the current 2022 passive loss from his new rental from the capital gain produced by the sale of his older rental in 2022.

Did you check the boxes mentioned in the above post?  It should then flow to 8582.

7 minutes ago, DANRVAN said:

On 4747 input did you specify the sale related to property A?

 

On the Schedule E input sheet for A did you check the box that it was a complete disposition of a passive activity?

6 hours ago, Christian said:

He set up a house he inherited from his mother last year and posted a loss from that

So you have two rental properties on Schedule E, one that was sold (A) and the other with a disallowed loss (B).

On 4747 input did you specify the sale related to property A?

On the Schedule E input sheet for A did you check the box that it was a complete disposition of a passive activity?

Those steps should net the loss on B against the gain of A. 

37 minutes ago, Christian said:

depreciation to his income for 2022 taxing it at his regular tax rate

That is correct.  The unrecaptured section 1250 is a capital gain which can be offset by capital losses,  but taxed at a maximum ordinary rate of 25%.

On 4/17/2023 at 5:59 AM, mcb39 said:

never been questioned by the IRS since I have known them.

But that doesn't really mean anything.

On 4/17/2023 at 5:59 AM, mcb39 said:

came to me with the Carryover loss already established and I don't know the particulars of the story

Personally,  I would want some general verification (documented) before I put a $200,000 carryforward on a tax return; it could come back to bite you if disallowed. 

Catherine mentioned the possibility of a 33% drop in the market value, but it is also likely the previous preparer did not know the difference between an allowable loss and a partial gift.

It should not be very difficult to document a significant drop in market value given the date of inheritance vs date of sale.