DANRVAN

Sell a SMLLC? How? What?! Is there a relation between the buyer and seller?

Sounds more like a revocable trust and makes more sense. For sure confirm with the attorney. Are there any depreciable assets that could have been stepped up back in 2002? Possible 481(a) adjustment?

I have not seen any indication that it was.

Are you sure it is an irrevocable trust? Why would they set up an irrevocable trust under those circumstances? Is there a large taxable estate? What happens when wife passes away? Have you read the trust document or checked with attorney? Maybe it is actually a grantor trust that has been treated otherwise? Just doesn't seem right to me.

Sect 736(a) does not make sense for a rental partnership. The partnership should be advised to make a section 734 adjustment under a section 754 election,

Most likely In most cases irrevocable trust are not included in the estate of the decedent as it appears here. Therefore no step up in basis.

Sounds straight forward to me. A major component was replaced.

If you take the position that it is not part of a building system per Reg §1.263(a)-3 (e)(2)(ii)(B)(2), why would you use 20 years instead of 15?

Looks to me like it falls under Sec. 1.263(a)-3(k))(1)(iv) "Returns the unit of property to its ordinarily efficient operating condition if the property has deteriorated to a state of disrepair and is no longer functional for its intended use"

Depends on state law.

I believe it would, unless it falls under the Sec. 1.263(a)-3(h)); lessor of $10,000 or 2% basis safe harbor rule.

If the partnership made the payment to the former partner it is considered a redemption of his interest by the partnership, instead of a buyout of his interest by the remaining partners.

If you are using ATX, go to elections and use the tab for "Dispositions, Disasters...". Then use the first option on top of the page. If you are deferring income from sale of calves due to drought use the 3rd one.

And after considering Reg §1.263(a)-3 (e)(2)(ii)(B)(2) I have to agree. The thought that a septic tank for a single dwelling rental would be classified as a Building System instead of a land improvement never crossed my mind.

and farm tractors last way longer than 7 years, over the road trucks way longer than 3 years.......

I use asset class 00.3 Land Improvements with a 15 year life. Class 00.3 includes non-municipal sewers. A septic tank is part of a sewage system that includes pipes to the tank and pipes from the tank to the perforated pipes in the drainfield. I have not seen an authoritative cite to challenge this position. The fact that a modern cement tank will last longer than 15 years is a mute point for tax depreciation purposes (they will for sure last longer than older metal tanks that were prone to rusting out).

versus Tax Code. I have never been a follower of The Tax Book. Although I tried it out once.

The code is fairly clear on this. A corporation is in existence if it retains a bank account and is in the winding down process regardless of state law, therefore a return is required. The final distributions are reportable transactions. Per 1.6012-2 (1) "shall make a return of income regardless of whether it has taxable income or regardless of the amount of its gross income." (2) "A corporation in existence during any portion of a taxable year is required to make a return. If a corporation was not in existence throughout an annual accounting period (either calendar year or fiscal year), the corporation is required to make a return for that fractional part of a year during which it was in existence. A corporation is not in existence after it ceases business and dissolves, retaining no assets, whether or not under State law it may thereafter be treated as continuing as a corporation for certain limited purposes connected with winding up its affairs"

When if doubt file it.

That is correct. A corporation is required to file a return as long as it is in existence, whether it has any income, expenses or not.

Recently had a similar situation. https://www.irs.gov/individuals/request-deceased-persons-information#transcript

I have never had to to that, but try duplicating the return and switch wife to primary taxpayer. Then change husbands SS# to something like 111-11-1111 so the duplicate return cannot be filed by mistake. Use the duplicate strictly for printing the estimates.

How can there be a recorded sale if they did not receive any consideration? They received nothing for their shares? Am I missing something here?

The toys most likely did not increase in value "over time". Therefore basis of gifts would be equal or greater than sell price. Taxpayer is entitled to making a reasonable estimate. Unless the toys were collector items, I would accept a reasonable estimate of basis = sell price and call it good.

That means you will have more time to share your knowledge with us here!