Catherine

Client told me attorney said she'd never seen it before in over 20 years of estate work in CA - but that she checked, and it was indeed legal. She was horrified, too.

Never have, never will. Cost to clients is totally outrageous.

They come back online in early January for some business returns first. As long as you define "early" as "first half" meaning up to the 15th.

Beware of new rules in California! Client of mine was executrix for a relative who lived in CA. Got the estate settled, sold the property, had all the payoff amounts from mortgage, final tax from town/county, estate closure letter. Distributed proceeds to heirs. Almost two years later, county came back saying they had adjusted the RE tax, here's a bill for well over $10k, pay up. Attorney in CA said she'd never seen such a thing in 30+ years, but researched it and it was legit. Very luckily for the executrix, most of the heirs gave her money towards that bill, but she was still out of her pocket for about a third of it. Doesn't specifically deal with your sale-of-home issue, but the executor should at least be warned of this possibility.

As always in this business, facts & circumstances. Why did you fire him? Is that still the case? Why isn't the new preparer doing the work? If you do this, and he decides he likes you better, is he welcome back for good (if not, tell him up front)? Up to you, but definitely get paid - and make sure the check clears - before you do anything. And don't let him pay via PayPal, as he can go back to them after you're done and claim he didn't get what he paid for. They almost always decide for the payer, and you're out the money plus a Pp fee. Happened to a colleague of mine; I took the Pp link down from my site the next day.

In my experience, as long as the tax is correct, the IRS is too doggone busy right now to chase minor paperwork errors.

Oh, dear. My sympathies to the family, and to you on the far larger mess you now have. Perhaps the lawyers will earn some of their pay and figure out the legal ownership questions.

This forum is far more useful to me than some of my professional subscriptions; I log the expense there. It's listed as a "Donation" here, but in my mind it's 1005 subscription. If I (we) don't pay, it goes poof. It's far too valuable to let that happen, as long as Eric is willing to keep it up for us!

I'd probably pick consultant, because it's the knowledge being tapped, rather than a patient being seen. YMMV, I could make a case the other way as well. However, since both are SE income, in the long run it doesn't matter. FWIW, I have had plenty of psychologist/therapist tax clients whose 1099s from insurance companies have, in the same year, run the gamut between medical, consulting, and "other" income. We put it all on their Sch C, since that's where it all belongs. Never a question.

From the original post, the son paid for materials & supplies with that $20k. That is a completely valid claim against the property & there should be no issue with him being reimbursed at close. If for materials, he could put a lien on the property. I had a case (that I got after the house sale dust settled) of a surviving spouse who was not part owner of the house - it was 100% owned by the spouse who died - who paid all the house costs until the legal paperwork was settled to the point of the house being salable. Mortgage, maintenance, repairs, even replacement of a furnace that died. Added up to nearly $100K over some years (spouse died in the early days of C19 [from cancer] and the courts were shut down for months, so it was a long haul to settle this). Survivor got a big chunk paid directly as reimbursement. Executor then split the proceeds among the heirs (of which SS was one of 3, the other 2 being children of a prior marriage). As for basis, I think a lawyer's opinion on the implied life estate is needed before any other determinations can be made. No life estate = basis is FMV when adult daughter died. If there is legal basis to claim life estate, basis = basis on date of transfer, plus daughter's improvements. Ah, these juicy convoluted weird situations people get themselves into.

Date of this page is Dec 2022. https://www.tax.ny.gov/pit/file/return_assembly_mail.htm This seems to be from 2017, but includes private delivery service addresses. https://www.tax.ny.gov/pdf/publications/general/pub55.pdf

I find all caps harder to read in general, and use mixed-case on tax returns. On those rare occasions all-caps is needed, I get the same issue as Tom, and end up with a lower-case letter for first word in a sentence, names, et cetera - and then have to double-back and fix those. Ugh.

Thank you so much, @jklcpa Judy; I was afraid we were looking at an installment sale with $0 received for several years. It is a family vacation property and I don't think it was ever rented out (but I have no idea - as I said, this isn't even my client, praise God). The terms of the note allows her to call the note for any non-payment - and that the buyers (her brothers) have to pay all her legal costs should she do so. Were I this person, I'd call the note. But not my call. The colleague is someone relatively new to the field, so I may end up hand-holding on this one. I'll send him back to make inquiries about prior rentals and depreciation; I've already sent him off to research basis. Fortunately, his wife has extended family in the same county as the property and they already planned on going for a visit, so he was going to research property records at the county registry the next town or two over. Client's dad died so many years ago there's no hope of those records being online.

Bonnie, @NECPA in NEBRASKA my heart goes out to you and I'll keep you in my prayers. Lurk for as many years as you wish, or disappear in a few weeks, as seems good to you. You can always get sympathy here, and advice for those family returns, and more.

Not my client. Thank God. Theoretical for me, real for someone else. A colleague asked for advice handling an issue. T/p (not a NYS resident) got a letter from NYS demanding a return for a property sale in 2021. Property was sold in 2021 but t/p's brothers failed to pay her share of the proceeds. My original thought was report to NYS that no $ was received in 2021, therefore no return needed for a cash basis taxpayer. We will now ignore the NYS computer-letter non-responses, and go on to the weird parts. Stack-o-stuff brought to me to go over with colleague (with t/p's permission). Property was a family-owned cottage; t/p was bought out by her brothers for a whopping $25K total. They had her take back a mortgage for that amount. First payment was to be late 2022 ( a full year later!), with monthly payments from the 3 brothers for ten years. Legal docs notarized plus an amortization schedule, plus ability to call the note, plus more. But no payments were made until 2024 - and then only by 2 of the 3 brothers. Those 2 caught up in full, with hand-written apologies for having forgotten. Whole thing stinks to high heavens but that's not the issue. How would one report this?! Installment sale, starting in 2021, with zero $ in payments until 2024? Installment or Sch D sale in 2024 as that's when first $ was received? Ancient property records will be needed for basis; 4 siblings inherited this cottage from their dad who died in the early 1970s (all these people are in their 70's or 80's at this point). What do people think is the right way to handle this mess? By the time we'd gone through the docs, my colleague and I were just staring at each other, each wondering what on earth to do with this thing. And that's before we try to deal with the NYS Taxpayer Advocate office!

That is indeed the box. I am in fact waiting for a farmer to tell me if he wants to carry forward only.

I had an estate here in MA that was close to the MA $2M exemption amount, and got this question from one the Executor. Exec is a nervous nelly, so I called MassDOR's estate tax unit and asked directly. Their answer was "If it doesn't exceed the limit, we don't want to see a return." Even if it's nothing, they still have to look it over and process it. But that was a state, not the IRS, that I spoke with.

Only until May. Better than nothing, I guess - but nothing is all that many people have left. If they're even still alive. https://www.irs.gov/newsroom/irs-provides-relief-for-helene-various-deadlines-postponed-to-may-1-2025-part-or-all-of-7-states-qualify

I don't know, off the top of my head, someone who could do this work. However, I helped out such a company many moons ago. Between that work and keeping them going while it was being figured out, it took a good half a year (that case the guy had been skimming for a couple of years, increasingly badly). Your client needs to know it likely won't be a quick fix. I do know someone who *might* be able to help, but can guarantee nothing at this time.

You will probably be able to e-file once all the external paperwork is in place. Attach 1310 to return as a pdf, and also include the court appointment. They will send a check, no direct deposit, so they'll need to have an account for the estate that will accept that check. As Judy said, have it ready to go. You can accept more paperwork from the (former) POA daughter. You just can't tell her anything other than "I got the documents you sent me" until you have the official notice of her being able to act for the estate.

bump for anyone who missed this

I've sent specific notes to a couple of folks, but it may well be there are people not in CA who do a plenty of CA returns. A client of mine who is resident PY in NY and CA would like to talk to other preparers about switching. I'm not sanguine about CA returns any longer, as he's the only client I have left with any CA exposure, so I made the suggestion to him. If you are interested in a new client, let me know and we'll proceed from there.

If the e-file database rejects it, then correct the incorrect check-box and resubmit.

The requirement for MFA means people will turn back to sending us sensitive documents by plaintext, readable in transit, email. Or text messages. I'll be retiring faster.