DANRVAN

You use the ratios from the tables based on the parents age on the date of each transaction. Use the ratios from the table based on parents age on date of gift to allocate the parent's basis between parents and children. Use the ratios from the table based on parents age on date of sale to allocate sale price between parents and children. Subtract the children's basis as determined above to calculate gain. For form 709, you use the ratio's from the table based on parents age on date of gift to determine value of gift. Also, since the proceeds were divided up without using the ratio's from the tables. there was most likely gifting from or to the parents due to Assignment of Income rule.

Sounds like you have a good grasp of the 754 adjustment which is intended to give the partner the benefit of the stepped up basis of the assets. So in the year the assets are sold by the partnership, the adjustment will include increase in depreciation and decrease in gain. 754 adjustment can also effect SE income.

Yes.

There can be advantages and disadvantages of either a shareholder loan or contribution of capital by the S corp shareholder. As pointed out the capital contributions will increase basis and distributions will decrease basis rather than triggering income, absence positive AAA or AE & P. On the other hand, if debt basis has been depleted, repayment of the debt can result in taxable income. The key is to inform (and document) the shareholder of the possible impact of either injecting capital or loaning money to the corporation; keeping in mind the consequences if the company goes under. In that situation, the stockholder might be better off holding 1244 stock resulting in an ordinary loss.

On second thought, it would be treated as a sale of partnership interest and termination of the partnership.

Not sure what you mean by only a partner sale?

In this case it sounds like the property and mortgage were held by the individuals instead of the partnership. Otherwise I agree, it would then be treated as a 736(b) payment.

Not abandoned since they transferred title. How much debt was relieved? Would probably report on 4797 with debt relieved as consideration.

Best tax treatment might be abandonment of property or of partnership interest depending on facts and circumstances. Unfortunately they did not get tax advice before they signed the $1 deal, although that is not the final determining factor. That $1 might have been the most they could get out of the deal so maybe no gifting here. As Lion pointed out, was there any relief of liabilities?

I have reported like that without receiving a cp 2000, maybe just by luck. I would deal with it when it comes after tax season instead of spending time and billing client on it now

Looks like you might have some gifting going on.

So if partner had outside basis 754 adjustment should reduce gain. Also should reclassify a portion of it as capital gain from ordinary gain.

Bio fuel industry is giving the big push on this.

It is the 3rd box on the election statement, it refers to reg 1.454.....

Under the uniform of basis rules, you will teat the property the same whether from a trust or estate. Your client's basis is the adjusted basis on the final depreciation schedule for the 1041. In regards to you first question, I don't see the point in claiming depreciation for a 2 week period if allowable or not.

Box 11 is correct.

Released yesterday, Mar 1 filing date extended to April 15th. https://www.irs.gov/pub/irs-drop/n-19-17.pdf

Not the issue here!

754 adjustment should not be reported on 4562 for 1065. Offhand, I don't see how or why that would have been done. I do not put 754 on a 4562 at all, it is only reported on K-1 13-w. It is a partner item only. I keep a separate depreciation schedule for 754 and input manually on K-1. Since you are using ATX for depreciation, you might have to set up a dummy file for 754 and input manually to K-1.

Case closed.

And now with TCJA, when corporation goes belly up, they are no longer able to write off as misc itemized deductions as corporate employee per case law.

I think you will need to set up a separate depreciation schedule and input manually. I use ATX , but for most clients, I use the depreciation module of Easy-ACCT so it makes it easier to keep a separate schedule for 754.

Are you saying that during the probate period there was income from the rental which passed to your client through the estate? You will need to a copy of the estate deprecation schedule to follow the uniformity of basis rules.

Your client paid taxes on that money which was profits? from the rental? In regards to your first question, was the rental available for rent..advertised..

My question is whether you can support the position that will yield the greatest tax benefit. Are there other water sources on the remaining acres? If it had been successful, would the pond added a proportionate benefit to the remaining acres? Also look at the other side of it. If he had sold the remaining acres and kept the 6, is there a reasonable position to allocate a portion of the cost to the basis of those acres? The only fact given was that a portion of land was sold that had a direct cost of development and demolition upon it.