Sara EA

AI is wrong on the joint ownership part. This from Pub 551. Just above this quote there is an example for surviving tenants that shows the same math I used above. You can all stop worrying about whether assets were held as tenants in common or w/ right of survivorship. I give AI a C. Qualified Joint Interest Include one-half of the value of a qualified joint interest in the decedent's gross estate. It doesn't matter how much each spouse contributed to the purchase price. Also, it doesn't matter which spouse dies first. A qualified joint interest is any interest in property held by married individuals as either of the following. Tenants by the entirety. Joint tenants with right of survivorship if the married couple are the only joint tenants. Basis. As the surviving spouse, your basis in property you owned with your spouse as a qualified joint interest is the cost of your half of the property with certain adjustments. Decrease the cost by any deductions allowed to you for depreciation and depletion. Increase the reduced cost by your basis in the half you inherited.

To avoid any future hassles, I'd file using the current date and surviving spouse. (You'll need a new 8879, but you can go ahead a file before you get it--you're covered.) Who knows what the IRS systems will do with this situation, and you don't want to cause the widow any more grief than she already has. You can efile the federal return, but check with your state.

Agree that (a) is correct. I've had cases where a rental property was jointly owned. When one spouse died, that half gets stepped-up value and starts depreciation anew. The surviving spouse gets half the original basis and accumulated depreciation (because the other half belonged to the deceased). You have to get rid of the old asset and start two new ones. Using the numbers in the OP, the wife would have a basis of $500k + $200k - $175k.

I've sent lots of clients to the local SSA office to get copies of their 1099s. In the cases discussed here, however, the clients are not able to go and there don't appear to be court-appointed fiduciaries who could get info from SSA or an IRS transcript. In that case, I'd take their last actual SSA1099, look up the increases and Medicare amounts for each year, and just file the return with the estimated numbers. If they're off, the IRS will send a correction if it changes the tax. They will also send a correction if withholding was off, so don't worry about it.

When all else fails, I have looked up the lowest price a fund or stock ever traded for in its history. The taxpayer can't have purchased it for less than that amount.

How many times have every one of us corrected prior year returns that were self-filed? Sometimes people bring them to us after they get an IRS notice. Other times they come to us because of some unusual item in the current tax year but we notice an error when we review their prior year. Often the errors are in the taxpayer's favor. I once had clients who took money out of a retirement plan year after year and paid taxes and early-withdrawal penalties. They had a child in college. I amended three years of returns and got them back enough so they didn't have to make another withdrawal for tuition that year. Doubt these folks will use IRS's free program in the future.

Catherine is right about the failure to file penalty. Once they miss the extension deadline, it goes all the way back to April, so your clients are already facing six month's worth. They must file ASAP and apply for CNC when they get the first notice. At some point likely all of us have waived our fee for a client in distress. Know your client, though. Some might be embarrassed by accepting "charity."

Some government pensions (including teachers) have annual COLA adjustments. Some also reimburse Medicare costs. I don't think I've seen a private pension plan that does either.

Both spouses have to file 709s when gifts are split. There really is no reason to split gifts anymore because the lifetime gift/estate tax exemptions are so high. It just creates extra paperwork. Form 709 cannot be efiled.

You did exactly right. Depreciation recapture applies to pre-MACRS property.

I once caught a divorcing couple making out in my office. Never say never....

You have one spouse accusing the other of unreported income. You don't know if this is based on fact or supposition or which one is being less than truthful. Tell them to each find a new preparer because the IRS would consider it a conflict of interest if you prepared both their returns. No need for further explanation. Invite them to come back as clients when the divorce is fianalized.

The story was just published by the NY Times, so it's for real. I won't post the link because you have to be a subscriber to read it. The leaker was a gov't contractor. The article explained that the IRS was so careful not to leak Trump's returns that they actually constructed a safe to keep the paper copies. Apparently contractors are not always adequately trained, which is the weak link. Why are contractors handling our tax data?

What kind of meal has a value of $150? I could see it with the political fundraisers that charge $1k+ per person, but $400 seems excessive unless there was an open bar and aged steaks.

Kathy, of course there's nothing wrong with educating yourself, but I draw the line at sharing my certainly incomplete knowledge with someone who will use it for a life-changing decision. People should get solid advice from SSA (the folks there are really good in my experience) or work with a financial advisor--NOT their tax preparer. Over my career I have had several people question me about the tax implications of getting married. Really? I would think that people decide to marry because of love, commitment, to make a relationship permanent. Money might enter into a decision to do a prenup, but to get married? Talk to a marriage counselor, not your tax preparer.

I consider SS out of my bailiwick. Sure, I'll advise clients on how benefits will affect their tax situation, but that's where I draw the line. When to collect, on whose record, etc. are complex and I don't want to be responsible for giving advice that may end up not being in the client's best interest. Same goes when clients ask us legal or investment questions. Go ask an expert in those fields. Of course they ask us because they don't think they'll have to pay us extra. We had a client who called with a legal predicament and when we recommended he go to his lawyer, he admitted that the lawyer charges too much. Stay in your lane.

Anyone remember how the IRS functioned during the last shutdown? We have several audit submissions awaiting IRS reply. Will these deadlines be extended? The return extension deadline is approaching. Will Oct 15 returns be processed? Final question: Is it time to donate to this site again?

A woman I knew who was the bookkeeper for a nonprofit said she fell in love with bookkeeping in high school. When they'd pass out those practice packets with journals, checkbook registers, and fake bills for the cash, she'd take it home and complete it all in one night. Another woman was a scientist at a cosmetics company until she discovered Quickbooks. It was love at first sight. She abandoned her science degree, and now does bookkeeping for many small businesses. Some people are just born to compute, just like some are born to make music or race fast cars. Have people changed so much that fewer are being born to compute, or is the political/education system telling them that only STEM degrees count? Not everyone has that aptitude, ya think? Good thing, or who would make the music?

TexTaxToo, antiques, artwork, and rare coins and stamps are examples of items that may not be in good condition but may be very valuable. Cleaning old coins to make them look better reduces their value, and antique furniture that looks its age is the reason it's worth money. I remember tables at a Yale hangout where a century of students had carved various messages, names, etc. On sight, they were hardly in good condition, but I bet they'd sell for tens of thousands each. Also think about some famous paintings that have been stolen and stored in not ideal conditions. They're not in great shape when recovered but are still worth millions. Please give us a cite that says clothing/furniture over $500 must be appraised. Did the law change?

Over $500 requires Form 8283. Over $5,000 requires an appraisal. The $5k applies to like-kind items, so if you donate clothes all year long and the total FMV is over $5k you have to get the whole lot appraised. Same with furniture.

If FMV is over $5k, the client needs an appraisal. Is that what you meant by "approval"?

I just got a "secure message" from Detroit. No explanation, just click the link.

Perhaps the gambling winnings increased his income enough that his investment income became subject to NIIT. Take a close look at the math on the 8960.

For IRS purposes, his tax home is TX because that's where he spends his time. A quick glance at WI law says if you are domiciled in WI, you are a resident no matter where your tax home is. Since he intends to return to WI, that's his domicile. Even if he decides he'll stay in TX, he'll still owe tax on the rental income in WI (as a nonresident).

I use a small community bank, and even there all I have to do is click on the check number and up pops images of the front and back of the check. Have your clients tried that?