DANRVAN

And we get an extra 9% from state for a big night out on the town.

For that amount, I would request an appraisal for a number of reasons. Just curious if the EOV was done by XXXX Business Services who came up with the goodwill in your other thread concerning this case? The business service showed a complete lack of competence by assigning goodwill in that case, so the CPA for the estate should have reservations about accepting any valuations from XXXX . Unlike goodwill which requires an appraised value under one of three prescribed methods, there is no regulatory requirement that the fmv of the equipment be determined by a certified appraiser. However, the CPA needs to take a reasonable position that the assets have been properly valued. It is a matter of professional judgment whether an EOV or appraisal is appropriate. An EOV is merely an estimate where as an appraisal includes documentation as to what similar assets are actually selling for. The executor or PR has a fiduciary responsibility to to account for the assets of the estate. For an estate of that sized the cost of an appraisal is well justified.

That is correct. I find hard to believe that a competent appraiser would find any goodwill in this case where continuing success of the business was dependent on the deceased sole proprietor. I would ask to see an accounting of the business and the estate, including a date of death value and current value of the assets. Also ask how long before the estate is expected to close. If your client then has major concerns you would advise her to see an attorney. Other than that, she waits to see what flows from the estate until it closes.

The business is valued at the fmv on date of death, that is what a unrelated buyer would pay for it. There are two types of goodwill, personal and business. The personal goodwill was tied to the sole owner, so it is gone. There could be some value to the customer list, and as mentioned key employees; if under an employment contract and non-compete agreement. But in this case the foreman left and two remaining employees ended up doing odd jobs. So I am curious how business goodwill was valued. Since the valuation was made at the estate level which you were not involved in, then it is probably not a concern for you how it was valued. I just question the competency of the appraiser, but a moot point for you. If the estate was liable for inheritance taxes that would be a concern. Before you can move forward, you need to know what the current structure of the business is and what exactly your client has ownership in.

In that situation, case law would say that goodwill was personal vs business and died with the owner, unless there were some key employees under contract and noncompete agreement. Suppose it could have come from long term construction contracts, if they were rock solid; not likely. A partnership or corporation with ownership going to heirs? The appraisal included date of death goodwill on a sole proprietor's construction business? Out of curiosity, I would ask for a copy of it to see what method was used to make the business valuation. That does not sound right, have you talked to the accountant and asked why a second restructure is needed? At this point what does your client have ownership in? Shares in a worthless partnership or corporation created by the estate? Ownership in equipment? Stolen from the estate?

That article covers a different topic. It addresses issues with allocating existing goodwill to newly admitted partners in profit sharing. Appears the discussion is purely from an accounting standpoint.

The key here is proper allocation of the contributed goodwill. If that has been done then gain will properly flow from from the basis of partnership capital accounts upon sale/liquidation of the partnership, or sale of the contributed asset. There is no special tax rule for contributed goodwill, it is treated like any other 704(c) property which the amortization or depreciation is allocated to the partners under reg 1.704-3(b) in respect to a Built in Gain. The allocation is made to prevent disparity between the book and tax capital accounts of the non-contributing partner as well as to prevent shifting of tax attributes among partners. Basically, the contributing partner recognizes the built in gain over the remaining life of the asset through a reduction in the amount of amortization or depreciation allocated to him. Here is a basic example where A and B form a 50/50 partnership. A contributes goodwill with fmv of 10,000 and basis of 5,000 = BIG of 5,000. B contributes 10,000 in cash. The built in gain is reflected in the difference of A's book capital account of 10,000 and tax capital account of 5,000; while B has a 10,000 balance in both book and tax capital accounts. Now assume the contributed asset has 10 years remaining life. Therefore the book amortization is 1,000 and tax amortization is 500 for the partnership. The book amortization is allocated 50/50; therefore each partner receives 500 in book depreciation. However, under the reg, the tax amortization is allocated first to the non-contributing partner B in an amount equal to his book amortization of 500. Therefore in this case, B is allocated the entire 500 of tax amortization and A receives zero. Now look at the effect on A's capital accounts. His book capital account has been reduced from 10,000 to 9,500 by amortization while his tax account remains at 5,000 since he was not allocated any amortization for tax purposes. So now the amount of BIG reflected in the difference between A's book and tax capital account has been reduced to $4,500. If you fast forward the calculations to 5 years his BIG will be reduced in half to 2,500 and at the end of the ten year life of the asset, he will have recognized 100% of the BIG through his reduced allocation of amortization. While that was a simple example it can get a lot more complicated and additional rules kick in. For example there might be not be enough income to cover partner B's amortization; or there might not be enough tax amortization to cover B's book depreciation. Those situations are covered in the reg. Now in answer to your question, when the partnership is sold, any remaining BIG will be recognized by the contributing partner as a difference in book/tax capital accounts; provided amortization or depreciation has been properly allocated. If not you have "BIG" PROBLEMS to resolve. That is the correct answer!

There is not enough information given. Was an FMV assigned to the goodwill on date of transfer eight years ago greater than basis of contributing partner? If so, was amortization properly allocated per reg 1.704-3(b)? Assume post 1993 transfer. No related parties?

Happy Thanksgiving to all on this forum!

Form 4684 section B since it is property used in a business and does not meet the inventory exception.

If that were the case you would have income for the amount of withholding. Let's say the gross was 2,000 and 200 was withheld for federal (disregard any medicare w/h) leaving 1,800 to deposit in the bank. If 1,800 was returned and 200 left as credit for decedent, then reporting would be income 200 and federal withholding 200.

I am not sure if I am following you on this. If SS was deposited in decedent's bank account and then returned to SSA, then why would estate have a claim on withholding.

ATX shut down transmissions at 7:59 pm eastern time on the 18th.

Mine are showing accepted by federal and state.

There is one more step you need to take. When you are in e-file manager, check the held file, then go to the upper left hand E-FILE tab and click on release marked returns. Then you should find the return in "created returns" section.

You might try support, but call now, they close in five minutes, they walked me through the process and it worked.

I have submitted some in the last couple of hours but not personally sweating it because these were tardy clients. Also checked with ATX and said final transmissions must be made by 7:59 PM eastern time today.

Tips are part of payroll cost as defined by CARES ACT section 1102(a)(1)(I)(aa)(BB).

Why? I have recently filed an amended return where husband filed separate and wife did not file. Husband had a balance due which was mostly offset on amended return by wife's business loss.

T.C. Summary Opinion 2008-11 "Mr. Lease’s costs for daily transportation outside of his metropolitan area where he normally worked are deductible within the meaning of Rev. Rul. 99-7, 1999-1 C.B. 361." This was a case where the taxpayer drove home every night. This position is also supported in Pub 463: "If you have one or more regular work locations away from your home and you commute to a temporary work location in the same trade or business, you can deduct the expenses of the daily round-trip transportation between your home and the temporary location, regardless of distance." and "If you have no regular place of work but ordinarily work in the metropolitan area where you live, you can deduct daily transportation costs between home and a temporary work site outside that metropolitan area."

I was told all transmissions must be final by 5:00pm eastern time.

And there will be no late filing penalties.

It sounds like the appeals officer agrees that your client has allowable travel but is confuses on what is allowed. You might show her that his mileage is allowable per table 1-1 of Pub 463. I would stay away form court cases at this point. That is not totally correct. Neither the IRS or case law recognizes the hiring hall as his regular business location. His regular business location is the general area where he normally works, whether it be 1 mile 5, miles, 10 miles or 50 miles from his residence. It can also be the metro area he lives in.

While that is the timeline for filing for a refund, I am not aware of any cutoff for filing an amended return for whatever other reason the taxpayer has in mind.

Case law back that up.