DANRVAN

Thank you grandmabee and cbslee. I have a limited number of payroll clients, so should not be a problem.

Oregon form WR is not listed at all, available or unavailable! (due Jan 31) Anyone here have contact with ATX in regards to this? Or have an ATX e-mail to inquire about forms?

Meant to say excess deductions on trust termination.

Assume you are referring to EDoTT, excess distributions on trust termination. There are several barriers. At the 1041 level, the property taxes would be limited by SALT whether or not passed to beni's. On the beneficiary side, the deduction was formerly allowed as misc itemized deduction which has been suspended by TCJA. There was an IRS notice in 2018 seeking comments on the effect of TCJA on EDoTT deduction by beni's and possible future regulation (which I have not seen notice of). So as I understand it, there is no deduction on the individual beneficiary's return at this point.

No way. The income and expenses of a child are reported on the child's return, not the parent's. Where did they "hear" this? Coffee shop, barber shop, standing in a check out line at.......??????

Max, I apologize for misunderstanding here. What I thought I heard was a reply that went beyond the question of O.P. and made an assumption that a speculative approach rather than a diligent one was taken.

I don't think Darlene's post had anything to do with speculating, but instead what to do if a 6252 had not previously been prepared. Client asked her how much tax? Since client is asking about a 2020 transaction, I am sure she also realizes she will need to run an estimated 2020 return to give the client a ball park figure.

I would want to see the return prepared in the year of sale and subsequent years. Then, if it was not properly reported in previous years insist on amending before moving forward.

They are saying a nonresident of Kansas does not have to claim the interest on a Kansas tax return. That is also true in Oregon and other states I have dealt with.

It would have to be a marital trust in order to be a bypass trust.

So who actually took the stepped up basis, trust or daughter? What form was income from the property and any related depreciation reported on, 1040 or 1041? That sounds like a decision was made not to include the property in the gross estate in order to avoid inheritance taxes??? If the decedent had beneficial ownership of the property (per 26 cfr 20.2033-1) it should have been included in her estate. Beneficial ownership depends on facts and circumstances. The amount of control is a factor. Was it by choice of the daughter to bequeath the property to grandchild, or was that determined by grandma will?

In Oregon we have a low inheritance tax exclusion so it is not uncommon to prepare an inventory of estate assets; also used in probate.

agree

You might have a case if the jointly owned property was acquired before Jan 1 1977 (re tax reform act of 1976) and you can establish that the property was purchased entirely with funds provided by deceased spouse. There have been several court cases to support that position, including Hahn v Com. The fractional interest rule comes into play after 1976, so jointly owned property acquired after that date would not qualify for 100% step up regardless of which spouse provided the funds.

Clearly not a 100% step up in basis since the property was acquired with joint funds. What is not clear is the ownership at date of sale. Partnership will terminate on date of death, unless his share held by estate until distributed to wife, then maybe 1/2 sale reported by wife and 1/2 to estate. Otherwise report as sold entirely by wife. However it is done, the total gain will end up reported by surviving spouse recognizing 1/2 stepped up basis, so the result should be the same. After termination of partnership, wife will report income on schedule E. Depreciation will have two components: 1/2 original basis and 1/2 step up basis. Assuming a Credit Shelter Trust was not involved.

The answers are: - it depends - it depends - it depends! How was the rental titled on the deed? Who originally acquired it and where did the source of funds come from to acquire it? Was an asset inventory prepared by estate attorney showing joint vs separate ownership?

Peace on Earth and Goodwill to All Ye on this board!

I think you are on the right track David. I have not dealt with ROBS but believe the 401k is considered a trust type of entity.

See Rev. Proc. 2018-40, if client has less than $25 million in gross receipts your cohort is correct.

TCJA changed that for "small business" with tax years beginning after 12/31/17. It is now an auto change for qualified tax payers.

1120 is required for any taxable year whether there are income and expenses or not. That should be spelled out in 1120 instructions.

Compensation for 401k is broadly defined in reg 1.414(s)-1. There is a lot of flexibility and also safe harbor rules. As others have mentioned, you need to read the plan for details.

Sounds like you are on the right track. Surviving spouse has a two part basis in the assets: 1/2 of original basis less accum depr. and 1/2 fmv on date of death. In the case of building #3, it is reported by surviving spouse on the final joint return. Surviving spouse basis will be $174,000 ($9,000 + 165,000) with accum. depreciation of $9,000 + amount allowable on $165,000 from date of death to date of sale.

You might be thinking of losses from sale of "personal use assets" not allowed. However gain is reported. Basis is usually higher than fmv in most cases so there is no gain.