DANRVAN

But what authoritative basis is the IRS going to use to make that disallowance?

But if you know log truck drivers, more than likely not!

Or change the scenario, say client is owner operator of a small delivery van in large metro are and spends an hour (or more) driving x miles from one end of the city to the other to pick up his first delivery. Are you going to say the time and distance he spent in traffic burning fuel was commuting?

But what are the facts and circumstances of the given example? Sounds like a case where taxpayer drives to work location A, spends some time working there; then goes to location B, spends some time working there and so forth. In the OP, driver spends the day engaged in the business of transporting goods or people. The driver is not going from one work location to the next, driver is performing services with his or her vehicle. How would you handle my log truck driver example?

And it is possible that there is not any case law with similar facts and circumstances. In my opinion, the driver is in the business of transporting people or goods, and mileage to pick them up is an ordinary and necessary business expense as in the example of the truck driver. Also consider the expense of driving back home. What if the last drop off was 20 or 30 miles for home? That is not commuting in my mind.

Exactly, for example, I have a client who has a part time baking business she runs out of her home on a wheat ranch. She also sells organic ground wheat flour. She does not have an area exclusively used for her business. But she does have travel cost from her home to deliver her goods, pick up supplies.... etc. She takes a deduction for the travel although she does on have a home office. But that is different from the OP fact pattern since her home is her principal place of business.

I thought that might be the case. I didn't catch that part. Were the expenses paid out of an estate checking account? If the assets have been transferred to wife and she is paying the expense, then I think a 1041 is not appropriate.

That is why it is on the top of my check list. For Oregon, the deduction for federal tax is reduced by the stimulus. The reduction flows from the checkbox on line 30.

Curious, who is they? Tax year for decedent ends on date of death If spouse takes over she basically picks up where he left off. But in this case the business terminated and wife is holding the equipment as investment so expenses would be added to basis. If the assets transferred directly to wife there might not be a 1041. But even if 1041 is filed, I don't believe the expenses would qualify as admin expense under the hypothetical person rule of sec 67(e). In other words, if the assets were held as an investment and not deducible to an individual, in the same token they are not deductible as an expense of the estate. If the expenses were from the winding down of husband's business then they would be deductible as ordinary.

Did he explain the tax consequences of putting real estate into a C Corp, potential double taxation........? You need bring these issues to your client's attention. Good luck.

You need to report these on line 2 of form 4835 or your client will receive a CP 2000. Box 3 is the gross crop sales to the coop. Most likely you will need to deduct storage....etc cost to reflect his net payment. It might be to his advantage.

I don't have a cut and try answer here, but believe there is confusion over what it means to have a home office and deduct mileage. With a home office established as your principal place of business, you are allowed mileage for any business travel away from there. The key here is that your home is your place of business. However, I don't believe there is any written authority that says you must have a home office in order to deduct mileage form your home. Consider the case of an log truck driver owner/operator who leaves his home at 4 am to go pickup his first load of logs in the woods 30 miles away. I would not consider that commuting and prorate his depreciation, diesel...etc. Those are ordinary and necessary business expenses that start at the first turn of the key in the morning. While I do not have any authoritative cites to back this up, in reality, the principal place of business for the log truck and full time "uber/whatever" driver is behind their respective steering wheels; and while there are differences between the two cases there are certainly similar fact patterns. I do not have any uber driver type of clients but would dig in deeper if I did.

What is a temp rental? Are you reporting from 4797? Are you using ATX? You might have to make a manual entry on the distributable income tab. Curious as to why in today's market the rental is selling at a loss?

It is entered as a reduction of wages. For example on Schedule C, open the input sheet for Line 26 wages, enter ERC on 2(g) and it make the reduction. not sure what you are referring to. no, it is treated as non taxable income

and if they are representing at the shareholder level there would be a deemed distribution to the shareholders.

That sounds right, under the origin of claim doctrine those legal expenses would be capitalized.

Can you give an example of what you are talking about?

After you delete the EF info page and 8879, reopen the return and add them back the ID will show 2021. But after you create the efile it changes to 2022.

That works, filed a couple today. But note that the submission ID does not change to 2022 until you create the new efile.

Meant to say over number of days used for any purpose.

But that is the reality of cash basis accounting. And since December 31 has come and gone, it is too late to plan around it.

That doesn't matter in the case of of a rental which is also used for personal purposes. The ratio for determining the deductible expenses is number of days rented over total number of days used (for any purpose) during the year. So there is no allocation of expenses per sect 280A(e)(1). The ratio is zero over the number of personal use days = zero.

That would be the case if it were not also used as a second residence / vacation home. In this case, I believe the expenses are allocated based on the total days used. For 2021 there were zero rental days, therefore zero expenses. For 2022 the days used in Jan and Feb will be allocated as rental days in determining the amount of deductible expenses for 2022.

That is a good point Sara, but I have yet to run across a situation where 481a depreciation adjustment did not net a tax benefit. If the adjustment increases a PAL, which passes through to to the son, his basis would be increased by $9,090.

correct