DANRVAN

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.

Peace on Earth and Good Will to all Ye on this forum!

There is a donate button on top of the ATX community screen.

He is partly right. 80% of stock must be acquired for a tax free transfer of property, but there is no requirement to hold 80% of the corporate value. I didn't not catch that on my first reply.

But how can you seriously ask if taking out a loan is going to increase taxable income? As Lion explained it has no effect on profit and loss. Accounting 101.

I am curious as to where you saw that phrase.

My intent is not to criticize, but it appears you are not willing to educate yourself before you jump into a specialized area of tax practice. It is obvious you are unaware of some important issues that you would learn in a basic course, so what else are you missing or going to overlook in this engagement? Sometimes being the best you can be means you tell your client you are not experienced in a particular area and refer them to someone who is.

That got to bugging me. For control purposed of section 351, there is reference to section 368(c) which basically defines control as possessing 80% of all classes of stock. That might apply to certain corporate reorganizations, but not to a a 351 transfer that I am aware of.

Estate tax preparation 101. Actually that should read 12 months or less for the initial return. And you are preparing the 1041 with out basic knowledge. To be straight forward, that is an ethical violation.

Lately it has been great. I call after 6 pm Pacific time and they have picked right up in the last two weeks.

I had a similar experience with a C-Corp. which cashed the check and wrote a makeup check for the estimated payment. As expected an IRS letter come with an estimated tax penalty. I made a call to the TP hotline and was able to waive the estimated tax penalty due to the circumstances.

Not that I know of. It is a standard procedure to prevent a cp 2000 while preparing an accurate tax return. Sounds like he receiving a crop share so the payments would go on 4835.

That means that in order for section 351 to apply, 80% of the stock and 80% of the value of the corporation must be held by the controlling group immediately after the transfer occurs. Otherwise the transfer of property is considered a disposal under section 1001.