Max W

In the SF area we are getting 65-70% land evaluations.

AZ conforms to federal depreciation, but not Bonus Dep.

It looks to me that he is essentially selling good will - his client list. Thirty years in business, would lead me to think that most of the equipment is old and of little or no value and the buyer would want to modernize. This could be a sticking point as your client would want something for it.

A "Select Few", huh? What the heck does that mean? All the IRS has done is to sow confusion and waste a lot of peoples time. If it was for beta testing,they should have said so and then take down the box inviting you to Renew. By leaving the box up on the web page, one has to assume that the PTIN can be renewed.

Ran into the same problem. The Tax Pro web page has a box on the right inviting you to reregister your PTIN. Could it be that the programmer setting this up just forgot to complete it, took a vacation, died, or was abducted by the Russians to gain info for hacking the IRS website??

See section 8 https://www.law.cornell.edu/cfr/text/26/1.197-2 Amortize under Sec 197.

Puerto Rico residents file a 1040-SS, in English, or 1040-PR, in Spanish only to report SE taxes. There is no US income tax. However, Puerto Rico has its own form and the taxes are comparatively higher than US states, due to the fact that little US revenue goes to PR. A prepare has to be certified by Hacienda (Treasury) to prepare PR taxes. BTW, the same 1040-SS is used in the various territories, as well.

Abby, thanks for picking that up. Apparently my browser cut off the "15 years"

From the IRS cost segregation example, it is Sec 1250 property - 27.5yrs. Site Work Site work includes curbing, paving, general site improvements, fencing, landscaping, roads, sewers, sidewalks, site drainage and all other site improvements not directly related to the building. For sanitary sewers, see Site Utilities. 1250 00.3 Land Improvements – https://www.irs.gov/businesses/field-directive-on-the-planning-and-examination-of-cost-segregation-issues-in-the-retail-industry

I agree with Sara. There could be something nefarious going on. I had an EIC case several years ago. The IRS requested school records, a letter from the landlord and utility bills. The client was perfectly legitimate,but being latino his last name and those of his wife and kids were different. The Spanish system confuses most people in this country, as there are two last names, the first being the last name of the father, and the second the last name of the mother. Here the father's name is considered the middle name. I guess it confused the IRS, but that's not hard to do.

Proposition 13 which capped property taxes in CA, was enacted in 1978, 40 years ago. So, if the client's property was acquired 30 years ago, it probably won't have Prop 13 protection.

That's an interesting loophole. When bonds mature, the interest is considered constructive receipt, so yes, the tax is due in the year of maturity, whether the bonds are cashed in or not.

That is the best argument for not filing IRS closed years. I'll bet that the state kept their check, though.

The interest is reported in the year they are cashed. Client will receive a 1099-INT. Interest is non-taxable to the state.

The first thing that needs to be done is to find out if the IRS will reopen the case and, if so, what would be required for that. Can it be appealed? The only thing I can see that could be done re the address, is to get the grandmother to sign a notarized letter, which should state, that she has authorized the TP to use her address, since 20XX for receiving confidential mail and packages. If it gets any more complicated than that, I would refer the client to TPAS, otherwise you could get sucked into a long, time wasting nightmare. Writing letters to the IRS without substantiating documents is a a waste of time.

There is no correspondence from the IRS and there may never be . Assuming that the returns that generated the K-1's are actually filed, it could take several months before they are processed. Then the K-1's would appear on your record for each year. You could check your clients files periodically to see if the K-1's show up. It could be, if ever, that the IRS checks your 2012 file. By then, 2012 would have passed the look back period of 6 years. The IRS rarely accepts amended returns, with additional income, for closed years, unless large amounts are involved, or there is fraud, or criminal activity. cbslee correctly points out your obligations. Your client can play the waiting game, or have the amended returns prepared, three of which could be rejected. 2012 appears to be the year with the most potential for additional penalties for underreporting, so the client would face a 20% underreporting penalty, if audited. Lay it all out to the client and if the returns are amended, get up front payment with a no-refund engagement letter.

There is no filing requirement in CA if the income is less thsn $17K single; $34K MFJ. It goes up $5K for each one over 65. This applies to Res. & NR.

That is a great help. There is one other detail that I just uncovered. The decedent left debts that were paid out of the rental income. Are those payments rental expenses (SchE), or 1041 expenses; or are they even deductible? Thanks to you and Sara for all of your help.

So, for example ; property basis = $1M; imrovements $200K; depreciation $100K. Basis to LLC would be $1.1M?

Sara, thanks for your help. Should the estate return have to show disposition of the rental property on form 4797? And what about the deprecation accrued during the two years?

An estate created about 2 years ago recently transferred rental property to an LLC. At the time, the appraisal was $1M. In the two years, property in that area has appreciated 15%. Are we looking at LTCG of $150?

Well, maybe ATX has improved. I used for about 8 years up to 2013 and several rejections every year which the Check Return function did not pick up.

Another advantage to using Drake. If you don't get a confirmation, you can call CS and get a response right away. With Drake, these things never happen. The only rejections are Id thefts, SSN issues.

A client asked me questions about EE bonds purchased many years ago. She wanted to know if they could be donated to her church and how much interest had accrued. Well, EE´s can not be transferred and to get the answer to the interest question, I found it here - https://www.savingsbonds.com According to them, banks do not necessarily compute the accrued interest properly and the website provides a calculator. There is a free period and after that, $5.95/yr. Buy 2 yrs and get the 3rd free. With all the other information they provide on savings bonds, it seems like a real bargain.

Steve, see Q24 here - https://www.irs.gov/credits-deductions/individuals/education-credits-questions-and-answers