DANRVAN

I see two prongs to your question: legal and tax. Whether she has to send it back is probably a legal question (though for an minor amount) that I would not likely advise on. However, if your search came up with an answer I would pass that on to the client. Regardless, if the proceeds are not returned, then I would include them in the estate.

If her travel was done while carrying out her duties of executor, then I see no reason why she would not be reimbursed by the estate, and expense deducted on form 1041. I don't see an issue if she is also a beneficiary, otherwise she is donating toward the benefit of other heirs. The expense is allowable under 20.2053-3(d)(3) which overlaps with Sect 20.2053-1(b) as referred to by Sara.

Depends on the the purchase price vs fmv of assets purchased. For example, if the purchase price was $640,000 and fmv of equipment, trucks, etc was $200,000 then Goodwill was properly valued $440,000.

"DON'T DRINK THE WATER!"

I question that. I am not aware of any authority for an agent to grant a filing extension? How well do you know this client? You mentioned a transcript, new client?

Hopefully by advising your client you need this information dad will cooperate.

And he should know better than posting past his bedtime....thanks for the correction!

A 645 election would have to be made by filing form 8855 by the due date of the first return. To qualify for the election, the trust would have to been revocable up to DOD. Also, the election would end no later than 2 years after her death. So in order to file an accurate amended tax return, you will need to use a year end of 12/31, unless the election was previously made. Actually you will need to file an amended return showing zero income or expenses for 7/11/20 - 7/10/21 (the dates on the original return). Then file an original return for the correct period ending on 12/31/20. When the late filing notice comes, refer to the original return with the incorrect periods when requesting penalty abatement. (I dealt with a similar HR BLOCK correction a few years ago) Seems like it should be matter of posting deposits and disb. from bank statements, including anything you have personally paid. With the family issues you mentioned, sounds like you should consider turning over accounting and tax prep to a third party to work with the attorney.

Is this a trust or an estate? Trust would have a calendar year end unless a section 645 election has been made. The first tax year of an estate must end no later than the month end preceding D.O.D. So in this case the first year end must end no later than 08/31/21. I am not sure what you are asking. But as Lion pointed out, you use cash basis unless accrual was elected on the original return.

For a trust that was not making required distributions? Without knowing the details, sounds like a potential breach of fiduciary duty. Beneficiaries paying tax on money not received? For a simple trust, earnings can be distributed within a reasonable period after the end of the year. Reg 1.651(a) uses the example of paying out 4th quarter earnings within 15 days of the year end.

I am not aware of any tax advantage of holding the investments an S-Corp., but there is extra accounting cost as you know. Now they are stuck with it, unless they wish to deal with gain from distribution under section 311(b); or nondeductible losses if basis of investments are greater than fmv.

And along that same line, it is not common practice to itemize every single piece of personal property owned by the decedent on form 706; 10 pairs of socks @ $5, 6 blue jeans @ $10...........etc.

I agree with you Sara, those items are immaterial, and right or wrong I have never itemized them out on form 709.

Wow, that sounds brutal! But I it will depend on facts and circumstances. If the child is a minor dependent, then I believe most of those gifts could be considered support: clothing, recreation, transportation...if reasonable.

Sounds like a theft loss since scammers took possession of his funds through a forced sale. Capital loss does not sound right since it did not result from a change in market value.

Schedule G on page two should show where the tax came from. 5 year carryback was allowed by CARES in 2019. sounds right if 2021 is the final year

It is not clear to me how this scam works. Did the "traders" remain anonymous and pulled his money out with out a trace of where it went to?

A Schedule C reported on from 1041. It is not clear what the situation is. Need more detail. Are you referring to the business above?

However, as explained in RR 2009-9. Ponzi scheme type of losses are still deductible since they are not subject to the disallowance of sec 165(h)(5)(A) for the years 2018-2025. Personal theft losses which are disallowed fall under sect 165(c)(3). Since Ponzi losses result from a profit motive transaction (other than from a trade or business) they fall under sect 165(C)(2) and are not subject to the limitations of sect 165(h) so they are still deductible as an itemized deduction. You should also be aware of the safe harbor under Rev Proc 2009-20.

It is a gray area and depends on facts and circumstances. If the client went through a broker it would help his case. Take a look at RR 2009-9.

Not if you are going to comply with the tax code. See section 162(a)(3), Exactly.

Bare land is not deductible. Interest and property taxes are deductible.

A log which list every job in chronological order. It starts fresh on January 1 and has columns for date in, client name, extension if applicable, date out, amount billed, check box for paid, and a check box for efiled. I am a one man show so the responsibility is all mine.

Because children had a remainder interest in the property. I don't have time to search for the tables right now.

They get a share of mom's basis as I stated above. Mom received a stepped up basis when dad died. So children receive a portion of mom's basis which was stepped up on dad's date of death. Why would you go back to cost basis if mom had 100% step up?