DANRVAN

I question that. The tax attributes of deceased spouse do not carry over to surviving spouse. For example capital losses and NOL attributable to deceased spouse can not be claimed by surviving spouse after the final joint return for year of death has been filed. If business or rental property is solely owned by deceased spouse, then surviving spouse gets a full step up in basis. Furthermore, at the time of transfer, the property has zero adjustments for tax attributes, it does not retain it's character for recapture. If surviving spouse elects to file a joint return, then the only income and expenses reported by deceased spouse would be those incurred up to his date of death. Therefore the sale of the property after DOD is 100% attributable to surviving spouse (under the scenario above) and offset by her basis which does not retain the recapture attributed to the holding period of her husband.

Take care Bonnie and hope you get to feeling better soon.

retracted my post for further review.

Looks like you have a 1/2 step up basis to start with. Sounds like a prior tax preparer was involved, can you contact them for any additional information they might have? As cbslee mentioned, the county should have information on the original purchase price and likely a valuation of the land vs structures.

Judy thank you for all the time and effort you put into moderating this forum and keeping us in line!

I hope and pray a speedy recovery for both of you.

To determine basis of timber you need to know: -estimated age of timber sold -volume sold -growth rate for the species -price per mfb date of acquisition. You then work backwards to determine the volume and mill price at date of acquisition. There lies the basis of the timber sold which you subtract from the land basis. Another CPA I know uses the "Look Up" method. That is where you look up at the ceiling and pull out a number. That is evident from some of his work I have followed. A timber cruise or appraisal will estimate the value of the standing timber at a given time; but it won't tell you the basis of the timber that was loaded on a truck and hauled to the mill. A timber consultant or forester involved in the sale can be a great resource. Also need to consider the cost vs potential tax benefit.

Clearly meets the rules for penalty waiver and three year reporting.

For a self-employed person there are two routes available by sec 2202 and Notice 2020-50 as reflected by the instructions to 8915-E. First if your business was closed or your hours were reduced due to covid. That does not appear to be your case. Secondly if your self employment income was reduced. Your gross income was not reduced, but did the extra cleaning cost reduce your SE income and caused you to experience adverse financial consequences?

There was no extension by either CCA-21 or ARPA-21.

Yes for your wife if she was laid off or had reduced hours due to pandemic. Yes you experienced adverse financial consequences as a result of closing or reducing hours of a business that you own or operate due to covid; and there is no set dollar amount in sec 2202 or Notice 2020-50 that I can see. But in the case of the original post there is a narrow gate to pass through since he was laid of before the pandemic hit, and does not meet any of the criteria of sec 2202 or Notice 2020-50 in his inability to find a new job.

Agree, a lot of crazy and unfair stuff, but I don't get to decide tax benefits based on that.

You might have a case that you lost some self-employment income, which is a factor stated in sect. 2202, but can you consider $60 an adverse financial consequence?

I wouldn't either, but after exhausting any possible tax benefit allowable by the law I would have so say sorry you don't qualify.

The IRS has not posted any "regulations". The authority comes from the Cares Act and the IRS notice referred to above. The penalty exception and "three year rule" are allowed in specific cases only. Unfortunately, there is no exception for an individual laid off prior to the pandemic and who could not find new employment because jobs were not available. However, he could qualify if was unable to work because of quarantine, unable to find child care, a job offer rescinded or start date for a job delayed due to COVID-19. If you have read a source that says differently please post it here.

Bingo!

A discretionary trust can give the trustee complete authority to decide who gets distributions and how much. Also whether to pay out of income or corpus. What does the 50% refer to?

but none of those reasons meet the criteria of Section 2202(a)(4)(A)(ii) of the CARES Act or notice Notice 2020-50 in determining that the taxpayer was unbale to find employment due to pandemic.

Click on the "Distributable Income" tab on the bottom of 1041 input. The middle column is for deductions, you enter it on the line for "ordinary loss."

Sorry, I misunderstood your post. Was he unable to work or find work due to quarantine? Did he have a job offer rescinded or start date for a job delayed due to COVID-19?

Suggest you review Section 2202(a)(4)(A)(ii) of the CARES Act or notice Notice 2020-50.

If those expenses are related to the rental use only then I see no reason to allocate to personal use. BTW, welcome to the community here jb005.

That was repealed awhile back, AJCA 2004 I think. Currently you can expense $10,000 per year, balance is amortized 84 months. Pub 225 should tell you what you need to know, different rules for trust etc. I don't have the code section handy.

Right, it is a federal tax credit that can affect the federal tax subtraction along with AOC and PTC. See Oregon pub 17 for details.

For Oregon you do need to input it in order to calculate the potential adjustment of the state deduction for federal tax.