BulldogTom

Why? What am I missing. The gain on the property sold is all related to depreciation taken which was deducted against ordinary income, therefore must be recaptured and taxed at ordinary rates? Is there another rule I am forgetting at the moment? Tom Longview, TX

Like @kathyc2 said above, you elect out by reporting all the gain on the 4797 on a timely filed return (including extensions). Out of curiosity, what are the numbers on your 6252 lines 5 thru 14? I think it should go like this: Line 5 - 150K Line 6 - 0 Line 7 - 150K Line 8 - 200K Line 9 - 80K Line 10 - 120K Line 11 - 0 Line 12 - 30K Line 13 - 150K Line 14 - 0 The form says if Line 14 is Zero, don't complete the rest. That is because all the gain is "absorbed" by the 4797 amount reported on Line 12. Tom Longview, TX

@jasdlmYour depreciation recapture is greater than your gain, and all depreciation recapture is required to be recognized in the year of sale, even if you are doing an installment sale. So I think you should have $30K net gain reported on the return. I think you should elect to report all gain in the current year since it is going to come out that way anyways. Double check me, this is off the top of my head and I don't have time right now to look it up to be sure. Tom Longview, TX

I have no idea, but probably because the IRS told them to program it that way.... Tom Longview, TX

Yes she gets step up. If the stock was held only in his name, she gets full step up, if held jointly only half step up. Inherited property is automatically long term. When you enter inherited as the transaction type, ATX will fill in long term for you. Tom Longview, TX

@JJStephens I never, ever want to live in Ohio! Tom Longview, TX

I thought about that too, but VA is NOT a CP state. There may be some nuance to this, but I still think if she ended up with the cash, she is going to have to pay the bill, and like @cbslee said it will either be her personally or his estate that is on the hook for it. Tom Longview, TX

I don't think that strategy will work if she ended up with the funds at the end of the probate. I can't remember specifically now, but I thought I read a case similar to this one where the spouse could not be relieved of the tax burden because she had the benefit of the funds in the marriage unit. Kinda like substance over form doctrine. Tom Longview, TX

Poof. New owner, new basis. Start from scratch. You will have some depreciation if it is continued as a rental. Tom Longview, TX

You mean like on this board? Just kidding.... This is a social media platform and we do give each other free advice. Our advice just happens to be good advice most of the time. Tom Longview, TX

New clients this year. Trying to get them done by the deadline. Just got this email from them, this is the first line: Hi Tom, Sara and I stayed up until 3 am this morning and found quite a few miscategorized transactions in QBO. Which is great because we have new numbers for you. Great for who? Tom Longview, TX

We recommend Genius Scan (free) app. Only because that is the only app I know that is free that I have actually used. It is OK. Did I mention it is free? I still get jpeg files and it sucks. Tom Longview, TX

Any "reasonable" split between land and building will work. I don't think you can "ignore the whole thing". Why are you taking on new clients? I thought you were moving to retirement? Tom Longview, TX

I already have a portal associated with my website. Do I have to get their portal to use their e-sign? Tom Longview, TX

The Basis is the value of the Home on the Date of Death. If the client did not get an appraisal and the sale happened very close to the Date of Death (like within 90 days - my suggestion, not IRS rule) you probably can get away with the sale price as the DOD valuation. If the sale is further out than 90 days, you should have an appraisal done for DOD valuation. Tom Longview, TX

Sorry, I should have been more clear. In ATX it is on the State Information Worksheet at the very bottom. I am not sure of all the counties that are not included, but Orange county is one of them (just looked it up today for a client).

I am trying to "shame" my CA clients who ask me if they get the extension by asking them "Were you affected?". If they say yes then it is not an issue, if they say no I ask them why they need the extra time? But the quick answer to your question is YES, anyone who resides or owns a business in those counties will get an automatic extension of time to file and pay their 2022 taxes. There is a checkbox on the main form that you can click that says Disaster. Then you can fill in the words CA Winter Storms for the description. The IRS will check the county and you should be good to go. Tom Longview, TX

How is the verification process? Is it like ID.me? Where you have to upload your drivers license and other proof of identity? Has anyone used the Esignature feature in ATX? Seems like that would be the easiest for me, but does it work well? Tom Longview, TX

My clients have become dummies (or they have gotten rid of all their computers, printers and scanners - 'cuz like a phone can do everything now days!). It seems this year that the process of printing out, signing and sending back the 8879s has become too much for some of my clients who only have a phone for everything now. Some of them can't comprehend an email that says "print, sign and scan back to the portal your engagement letter and forms 8879". I am so frustrated with some of these clients...they seem to think I am the problem, even though they have been sending me their docs through the portal for a couple years now. Maybe I am and maybe I should think about getting out of the hand-holding business (aka tax prep). If I capitulate and add e-sign for forms, what is it going to cost me, who should I buy it from and how complicated is it for my clients to use. Tom Longview, TX

Just to follow up and clear my thinking, the Cares Act only changed the carryback rules (suspended them for 2 years) and did not change the 80% rule for 2018 and forward NOLs? Tom Longview, TX

Wine or Whine? Tom Longview, TX

So the 2015, 2016 and 2017 NOLs are fully deductible until exhausted just like the old rules? The 2018, 2019 and 2021 NOLs have the new 80% of income limitations on them? And if the corp uses the 2017 and 2018 NOLs in the same year, the example above is how to allocate the NOLs to the income? In my current situation, the 2015 NOL will cover the entire profit for the year so I can take income to $0 for 2022. I think this is clear as mud. Please correct me if I am wrong. Thanks Tom Longview, TX

Corp Taxpayer has NOL's from 2015-2019 that have not been used up as well as a 2021 NOL. The 80% rule does not apply to any of the earlier NOLs, correct? Only the 2021 NOL is limited to 80% of income. It has been a long Month. Seems like April 1 everyone decided it was time to get their taxes done. I have been going non-stop since then. Thanks Tom Longview, TX

I don't think so. As long as he is a resident of NYS and he files a CA NR return, the tax return product is delivered is his home state. At least that is how I read it now. CA could be lurking on this board trying to find new revenue sources. Tom Longview, TX

It appears the prior preparer and you have a different number for the parent's taxable income. I think the kid should be paying at 15% since his mom was in the 22% bracket (assuming she was HOH) and that would make the Cap Gains taxed at 15%. I am pretty sure that is how that works. Tom Longview, TX