DANRVAN

6 hours ago, cbslee said:

The local bank had a much more detailed application asking questions about how many employees had been laid off due to the coronavirus.

How many employees would be reinstated, on what date and the payroll cost of reinstating those employees etc.

From what I have read layoffs and rehiring are not a condition for loan approval, but would help with certification of economic uncertainty.

Link to the best info on PPP I have seen;

https://www.sba.gov/sites/default/files/2020-04/PPP--IFRN FINAL_0.pdf

I have had similar cases where an expense related to a capital sale occurs in the following year.

I treat it as a capital loss in the following year and call it something like "Expense of Timber sale  in 2015".

Actually, I think that could be more appropriate than amending the prior year for a cash basis taxpayer, since the expense was paid in the current year.

Those are my thoughts, not saying it is completely correct.

5 hours ago, Lion EA said:

I have all the work I could want. But, I'm not doing all the work at my usual speed.

I hope to have the energy to do what you are doing when I get that stage of life!

1 hour ago, North Idaho Rich said:

when will they stop looking for 2019 returns and calculate off the 2018 returns.

My guess is that it will be a one time search.  If no 2019 on record then go to 2018 and issue ASAP per section 6428(f)(3)(A)

18 hours ago, Marie said:

.  Now son has sold the machinery.  Father is gifting farm machinery to son. 

But wait, wasn't it his to begin with? 

If I am following this correctly,  how can  son receive a gift of property he already owns?

How can dad establish a basis in property he never owned?

On son's side of this,  I believe a 3115 is in order.

20 minutes ago, DANRVAN said:

They are not going to wait for a 2019 return. 

So if you have not filed for 2019 or 2018, nor have you received a 2019 SSA  RRB 1099 on the date determination,  I am not sure if you will get a payment later if you file before Dec 31 2020, or if you have to wait until you file for 2020.  It's past my bedtime.

19 minutes ago, DANRVAN said:

As I read section 6428(f)(3)(A), the payments are to be issued ASAP; if your 2019 return has not been filed at the time the payment is calculated, then your payment will be based on your 2018 return.

In other words, the advanced payment is a one time event.  They are not going to wait for a 2019 return.  

Per section 6428(f)(3)(5)(A) if a 2019 return has not been filed they will look back to 2018.

And  6428(f)(3)(5)(B) says if a 2018 return has not been filed  then  "the Secretary may" use information from your 2019 SSA or RRB 1099 to make the determination. 

11 hours ago, North Idaho Rich said:

Have they actually announced the date when 2019 returns won't be reviewed for the stimulus figures?

I don't believe there is any review process of 2019 returns.  

As I read section 6428(f)(3)(A), the payments are to be issued ASAP; if your 2019 return has not been filed at the time the payment is calculated, then your payment will be based on your 2018 return.

2 hours ago, Catherine said:

look for a jurisdiction with a quick cheap divorce for next year.

I think the code is firm; in order to file single she would need to be legally separated  under a decree of divorce or separate maintenance.

It will depend on how the return of the down payment and cancellation of the contract are accounted for.

I don't believe reg 1.1038-1 will apply (whether recognized as installment sale or not)  since the transaction did not involve a repossession or default.

At a glance, it  appears the seller bought back the property and basis would be the consideration he paid for it  

Sale price (consideration) would then be the $15,000 returned plus the outstanding principal on the note.

If consideration given was less than fmv then maybe gifting involved.

Did the attorney draw up any papers in regards to the transfer back to seller?

I am also thinking there should be a closing report if title is going going back to client?

Hope this helps.

24 minutes ago, DANRVAN said:

This is from stimulus Q and A from various websites:

The official IRS site has not yet posted the info on non-repayment that was quoted from press releases.  https://www.irs.gov/coronavirus

So I am not making any promises to clients yet, but will continue to monitor updates.  I expect Checkpoint will have an analysis on it soon. 

Also looking for client returns with income over $150,000 in 2018 but less in 2019. 

They might need to  file 2019 ASAP to avoid disqualification from 2018.

22 minutes ago, jklcpa said:

so won't they have some payback if the income on that return exceeds the upper limit?

This is from stimulus Q and A from various websites:

What if my income is higher in 2020? You do not have to pay the government back. Technically a person’s 2020 income is what qualifies them for the payment. Since no one knows their total 2020 income yet, the government is using tax returns from 2019 and 2018 to figure out who qualifies for a check. If you get a payment and then your 2020 income is higher and thus merits a reduced payment or no payment, the money does not have to be paid back.

I have added a line to my tax preparation and planning check list to maximize stimulus check when possible.

First case, married couple with no dependents will have AGI over $200,000 in 2019 due to land sale .

Their 2018 AGI was less than $150,000.

So as I read the stimulus check qualifications, checks will be issued in about 3 weeks based on 2019 tax return; or if not yet filed, then based on 2018.

For this couple, then it appears they will come out $2,400 ahead if they wait for the payment based on 2018 before they file their 2019 return.

On 3/25/2020 at 3:19 PM, jasdlm said:

input worksheet for 2018 to 2019 on the 1041.

I think you just have to override it directly on Schedule D.

On 3/25/2020 at 6:06 PM, Bart said:

$200,000. Basis $140,000. Only purchased a new Rental for $170,000. Original Purchase price of Property sold $150,000

Looks like there should be $30,000 received as boot.  

Realized gain of $60,000,   $200,000 - 140,000

Recognized gain of $30,000  = cash or boot

Deferred gain of $30,000    realized gain less recognized gain

Basis of new rental $140,000,   fmv of new less deferred gain, also basis of old in this case

I prefer to run the numbers outside of the program first, then input into 8824 and make sure it comes out right. 

6 hours ago, jklcpa said:

The tax is only deferred and tax rates may be much higher when the new property is eventually sold.

And some taxpayers have the impression that it is permanently deferred!

1031's are great for estate planning with step up in basis.

They are also useful when real estate is sold in a high income year.  Currently have a client who exchanged for multiple properties and now selling off one at a time over course of several years while in retirement.

JKL EDIT TO CLARIFY - Quote above attributed to me was actually posted by Max W. 

At the direction of Governor Kate Brown, the Oregon Department of Revenue today announced an extension for Oregon tax filing and payment deadlines for personal income taxes and some other taxes closely following the IRS extension declaration. This move is a result of the governor’s priority to keep Oregonians safe and healthy, while also providing relief and consistency for Oregon taxpayers affected by the federal and state COVID-19 emergency.

Under the authority of ORS 305.157, the director of the Department of Revenue has ordered an automatic extension of the 2019 tax year filing and payment due dates for certain affected taxpayers as indicated below.

On 3/23/2020 at 8:22 PM, cbslee said:

Oregon still deciding whether to allow coronavirus grace period for state taxes

I thought Oregon was tied to IRS for filing and payment dates?

So if Oregon does not connect we will need to prepare federal returns in order to properly file for Oregon.

Although my practice has not been affected by COVID 19, I would take advantage of the filing delay.

Max, I know enough about foreign income taxes to stay clear away from it. 

I have seen articles related to your situation in the AICPA Tax Advisor, try googling a search on it.

4 hours ago, TaxmannEA said:

does the entire thing go out as a charitable deduction on the 1041 ? 

That sounds right to me.  It can be either paid out, or permanently set aside for future distribution.

On 3/20/2020 at 5:51 PM, Max W said:

However, distribution (Box 16d) is greater than the gains. 

I am not sure what you are asking Max.  Are you saying the distribution is greater than the basis?  

LATEST FORM AICPA:

We are calling on the Department of the Treasury to immediately give taxpayers an extension of the April 15th filing deadline — and we need your help.

Please email Treasury Secretary Steven Mnuchin today at [email protected]. To save you time, you can copy and paste this draft email:
 

Dear Sec. Mnuchin:

Treasury must act immediately by extending the April 15th filing deadline to July 15th.

Unfortunately, the important payment relief that was announced Tuesday and formalized in today’s notice does not apply to the filing of tax returns and does not reflect the real-world difficulties tax practitioners and their clients are facing.

Cities across the country are having to shut businesses down because of the coronavirus pandemic, and it is impossible for every taxpayer and their tax adviser to prepare returns in this environment.

Nearly 60% of all taxpayers turn to a tax practitioner to prepare and file their tax returns, and individual and business tax filing deadlines are fast approaching. We need immediate action.

We understand that these are uncertain and challenging times for the Treasury Department, and the CPA profession wants to help the system function well. To do that, we need payment and filing relief together.

Thank you for your work to guide the country through these difficult days.

You may also want to copy your Congressional delegation on your email. You can find your U.S. Senators’ and Representatives’ contact information at GovTrack.com.

Thank you for adding your voice to this important call for tax relief clarity.

1 hour ago, mcb39 said:

So, how does this affect the payment of April and June extension payments?

The relief gives taxpayers 90 extra days to pay their tax,  but they must apply for a an extension of time  to file after April 15th.

7 hours ago, Margaret CPA in OH said:

hopefully contact a live agent to

Practitioner Priority Service Hotline?