Jump to content
ATX Community
Sign in to follow this  
WITAXLADY

overthinking 1041? and insurance?

Recommended Posts

You are all so good and still lurking!!1 after tax season! congrats for selling - I will someday  - hubby says anytime but I said I like to spend money too much yet...

So my issue is trucker client died in semi accident last year and estate received lots of $$ for semi/trailer.

He is not going to replace them! Had written off most of the value every year as kept buying trailers, etc so there is very little basis to go against the 5 assets sold and the insurance money - therefore the estate owes!! about 2/3 of what they have collected selling and from insurance..

So 1=- when I do the 4684 - Casualty Form - it is showing all as taxable income due to insurance payments.. I do have to report the insurance as taxable - correct? ** Most important -

and 2 - it "almost" looks like it is also doubling the amount due to Sec 179 recapture - it cannot tax him for more than he initially paid???  or received?

Thank you all!

Darlene

ps - we won another award! on our baa baa cheese!

Share this post


Link to post
Share on other sites

Estate gets stepped up basis at date of death.  That won't help much for the wrecked truck and trailer but should not be much gain on the other assets.

Share this post


Link to post
Share on other sites

So that we have all of the pertinent information to help Darlene get to the correct answer, below is a link to the original post and story from this summer that may help with this discussion and that has more information and some answers already given back then.  @DANRVAN, you had answers in that topic too, and I agree that the insurance should probably be included on the S corp return. 

Darlene, if the insurance proceeds are reported on the S corp books as Dan said, then the casualty gain is part of the S corp, and since it is on sec 179 property in a passthrough, you should take a look at the form 4797 instructions that tell you how to report it. Basically, the details of sec 179 property sales and transactions will end up being a separately stated item on the S corp K-1 with a detailed schedule that is given to the shareholder with the K-1, and all of the details of the transaction and gain are reported on the shareholder(s) return.  But, you have to do the entries in the 1120S corp program so that it flows properly on the K-1 and so that the detail schedule are produced. 

 

Edited by jklcpa
formatting

Share this post


Link to post
Share on other sites
15 minutes ago, jklcpa said:

Below is a link to the original post and story from this summer that may help with this discussion and that has more information and some answers already given back then.  @DANRVAN, you had answers in that topic too, and I agree that the insurance should probably be included on the S corp return. 

If this pertains to the Sub S case then disregard my post above and refer to the previous thread.  

The key is to liquidate the s-cop before the end of the tax year.

 

Share this post


Link to post
Share on other sites

you are so smart! see - I knew you all would come thru =- just what I needed - go back and look! 

nasty gram from him this am!!! 

and then when I said I am not dealing from you today - my mom is having surgery and you cannot even tell me the 2 prices of the semis the deceased bought - how do you expect me to finish this! He wrote back and said what do you need?  - not like i haven't asked 10x and signed a smiley face!!!

  • Like 1

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

×