DANRVAN

So a 2032(a) election is out of the question. If this is the initial return have you considered using accrual accounting, short tax year...etc.

TP does not recognize any taxable income on transfer unless son assumes liabilities. In that case you have a partial sale / gift. Also no depreciation recapture, son assumes the basis and tax attributes of parents. But you need to file form 3115 on parents return to pickup the omitted depreciation as a 481a adjustment.

That is true. Assume you had capital gains after stepped up basis.

I thought you were referring to "Numerous Family Townhouses" as NFTs So in your example, say t/p buys a duplex, lives in one and rents other, then converts personal to separate rental. Then a few years later converts both to a single family unit. In that situation, for depreciation purposes you would have three separate assets: the original 1/2 rental, the one half converted from personal, and the remodel/conversion to a single family unit. Each would have a separate depreciable life beginning on the date when placed in service. If the single unit dwelling is later sold, the basis would be the combination of the three less respective accumulated depreciation.

Not that I know of. I have not followed NTFs real close, but do know the tax consequences depends on facts and circumstances. For example a creator is taxed at ordinary rates and also SE tax if in the trade or business. On the other hand an investor treats it as a capital asset that might be considered a collectible. Also, since NTFs are often bought an sold with crypto-currency there is another potential layer of gain or loss on the transaction.

Sleeping under same roof every night is not a requirement. What counts is where the child or parent resided, or would have resided during a temporary absence. See section 152(c)(4)(B) and reg 1.152-4(d)(3) for clarification.

Oregon Public Broadcasting; I like their news coverage, stories and documentaries, but so much the classic music. I should also make a donation.

Agree with Gail, can you put a value on it?

Unfortunately, it sounds like he did not seek tax advice until after the fact; and the incentive money he received has all been spent?

I don't see an argument for basis reduction. He did not incur a forfeiture or reduction in capital as in the case of an easement or involuntary conversion. Therefore it looks like taxable income. The amount he will spend on making the conversion will add to his basis; in a separate transaction.

And in this case it would go to the father per section 152(c)(4)(B).

Just curious, is this a real or hypothetical situation? Since the grantor did not retain the right to revoke, alter...etc, without consent, then it would not be included in his estate or receive a stepped up in basis.

I see that as a question for a financial advisor, which I am not.

I see an ethical issue with you withholding knowledge of the tax code from your client that would be to his advantage. I believe there is a professional standard to advise your clients on the best options available to them under the code. If you have an ethical problem in filing a return with a legitimate deduction or credit, you should decline the engagement. So how did you answer question 9(c) of form 8867 in this situation in carrying out your obligation of due diligence?

That would be the case if both parents tried to claim the child per the tie breaker rules, Sect 152(c)(4)(ii)

By nature of the beast, a revocable trust become irrevocable upon the death of the grantor and therefore included in his estate. The trust and the grantor are basically the same entity. Therefore in your case, son inherited property from mom and receives stepped up basis. Upon his death the trust becomes irrevocable and goes to his estate. His estate also receives stepped up basis. Look up the definition and operation of revocable trust.

For starters take some continuing ed courses. Then when you feel confident and competent try a simple one. Hopefully you will have an experienced peer to review it for you.

What was the relationship between the 1st person to die and the 2nd one five years later?

I believe in that case higher AGI parent can allow lower AGI parent to claim the credit. See example 8 on page 16 of 2020 PUB 501. Going back to OP, "she" will payback advance CTC since she is not claiming the child. He will receive the full CTC. Where is the double dipping? Looks like a breakeven between the two of them.

So you are saying she received the advanced payments in 2021 but will not claim CTC for 2021? In that case won't she have to repay the 1,800, or am I missing something.

The exception was on the chopping block of the original Trump House tax proposal. Also the $1 million capital gain ceiling Biden proposed would have hit Springsteen with $499 million taxed as ordinary income. A never ending saga!

There is a special rule for musical works under sec 1221(b)(3) that allows for an election of capital gains treatment. The election process is spelled out in reg 1.1221-3. The special rule came about from the lobbying efforts of song writers and was wrote into law under TIPRA of 2005. They didn't think it was fair to pay ordinary tax rates while an investor could purchase their works and resale as capital gains. Probably already deducted since writers, artist and photographers are exempt from capitalization under sec 263(h). by capitalized cost, if any.

Best wishes to everyone here in the New Year, I look forward to a fresh start!

That is not correct, the max in that situation is $1,502 for 2021. That requirement has not changed. Only if they are self employed. Wages are also earned income. Optimum level runs way above the >$400 filing requirement for SE income so not sure what your point is. See the 2021 eitc chart for details.

Basically you file F if you are in the business of growing crops or raising livestock. You file 4835 to report income and expenses when your land is leased to a tenant on a % basis. If you lease your farmland on a cash basis you report your income and expense on schedule E. It is possible for a taxpayer to report on a combination of these. I can't see any reason in your example to report on F and subject his earnings to Self Employment Tax.