
Tal10
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My client is not using a property management company. He is doing all of the work himself. I have literally hundreds of receipts to prove that. So, I don't doubt that every trip there in 2024 was solely to work on the property. And yes, $1,000 a month seemed low to me as well. Purchase price of the condo (in Florida) was just over $300K. Condo doesn't allow short-term rental. It must be more than 30 days.
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Thanks for the replies. The client has two other rental properties that generate decent income, so they can take full advantage of the bonus depreciation. And I wouldn't doubt if the client knew about this loophole, and I also wouldn't doubt that the property will never be rented again. Very hard for me to claim a rental property with $2,000 of income and $60,000 in expenses. But I feel I have to claim all of these deductions or I wouldn't be doing my job. Grrr. As for letting the client go, it's really not an option.
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All expenses you referenced should be reported as part of inventory on Sch C. Your client is operating a business, so things like business insurance, cell phone, internet, office supplies, tools, etc may be deductible, even when no income is generated for the year. I would also include business mileage within the inventory.
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Conflicted! Client purchased a condo in January 2024. He made multiple trips to the condo in 2024 for the sole purpose of making improvements and repairs, and furnishing the condo. The renovations were completed, and my client rented out the property for 2 months in 2024. His intention when he bought the condo was to rent it out 3 months of the year, and have it available for personal use the other 9 months. It's my understanding that days spent at the condo solely for the purposes of making repairs and renovations are not considered personal use days. So, technically there are 0 personal use days, and 61 rental days. Client spent $75,000 on furnishings in 2024, and it just does not feel right that he should be eligible for bonus depreciation on such. As a taxpayer, I don't think it's right that I have to foot the bill for what is mostly for his personal benefit, and I'm sure the IRS doesn't like this either. But if these are truly the facts, does he get these deductions? Since it is not listed property, there would be no recapture requirements in 2025 either.
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Never mind! Found a good article on it here: https://www.taxnotes.com/research/federal/irs-guidance/revenue-rulings/rev-rul-79-124/ddl6
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Taxpayers (husband and wife) are from Wisconsin. Husband is a partner in a real estate partnership, which was acquired during their marriage. Husband's wife dies. Can partnership make a 754 election to step up husband's basis?
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Hello. I have a client who is a real estate professional. He only deals in residential rental properties. He has been subject to 163(j) since inception. He did not make an RPTB (Real Property Trade or Business) election from 2018-2021, as he gained more benefit from the depreciation deductions than he would have from the interest deductions. This changed in 2022, however, with the more restrictive limitations in place. So, an RPTB election was made for 2022. But now there are several million in disallowed business interest expense carryforwards, and I cannot, for the life of me, find information on how I should be completing Form 8990. Has anyone run into this, and if so, what resources did you use to muddle through this form?
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Are gambling winnings subject to the 3.8% Net Investment Income Tax? My software says yes, logic says no, but the tax code says...? Some sources seem to indicate lottery and gambling winnings are not subject to the NIIT, while all other sources are silent in this regard. Thanks in advance!
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Hello. Well lots of clients claiming the ERC. Since this is a federal wage credit, and the reduction to the wage deduction is not required for Wisconsin, how does this affect Schedule 5M? Of course ordinary income is reduced on line 2, but is there also supposed to be a corresponding increase to the Other Adjustments account? If not, doesn't this pose a big problem with the potential for distributions in excess of the Wisconsin stock basis? I'm running myself in circles.
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Thanks for your reply! I didn't think the government would be so generous. I will read through the reg. I've never come across such a scenario.
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Hi all. I have a client who passed away in February 2021. He was a 50% member of a partnership that owns rental real estate. His interest in the partnership after he passed went to his 2 kids. Just before he passed a property was sold by the partnership resulting in a $500,000 net section 1231 loss. I'm working on the 2021 partnership returns. If I'm using weighted averages for transfer of interests, do his kids really get the benefit of this loss? Or is there some regulation out there preventing this? Thanks for any input!
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Thanks for the response! That's the direction I was leaning. Trust income is relatively small since assets were liquidated to cash in a relatively short order, so I'm going to simplify life and avoid the K-1's altogether!
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I don't know why I can't find an answer to this. Revocable trust. Grantor dies. Trust is now irrevocable. Trust document requires trust assets to be liquidated to cash and distributed to beneficiaries, $10K to a, $10k to b, $20K to c, $50k to charity, and the balance to z. No stipulation on how to divide trust income, so I will not be passing the income to the beneficiaries on a K-1, but rather have the trust pay the tax. For assets sold by the trust (stock) what do I use as the date acquired, and do I force long term reporting? Thanks!
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I was hoping someone could push me in the right direction. I have a client who has an s corporation and is headquartered in Wisconsin. My client is also a resident of Wisconsin. In 2021 he opened a division in Ohio. Should I be filing the IT 4708 or the IT 1140? Is it possible to use separate accounting with one or the other? I normally only work with businesses solely inside of Wisconsin. Any help would be appreciated!
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So what is to stop small businesses from laying off employees now that the covered period has been extended to 24 weeks?