DANRVAN

No, only the heirs of the final deceased partner. Nothing changed for the rest.

and it can now only be filed directly from IRS website.

The wording is not clear, but after reading it again it appears you are correct Judy.

Why would partners who were not a part of the estate of deceased partner get a a step up in basis? Seems to me you do not understand the difference between inside and outside basis and why section 743(b) is used to equalize. What makes it out of proportion to reality?

Depends. Did company pay with cash or making payments? If it has only been two years I would consider amending to properly account for during that time period. Those two statements do not line up.

Sounds like there was a possibility this was separate instead of marital property for husband's estate, with full step up in basis.

Maybe they need to take a look at the big picture here. Are they better of pouring money into the pit, or generating cash by selling the property and paying taxes?

From what I understand you to say, they would sell the other property, take cash and invest in existing property. Not a tax free exchange.

I agree. Go forward with correct numbers for 2022.

So they have not yet filed for 2022? That might change my answer from above. But have the partners been taking draws or GPs instead of salaries?

If they have been filing as a partnership, then I believe the answer is no. On the other hand, if they had been filing 1120-S and had "reasonable cause" for failure to file a timely election then they should be good. Your research should turn up a rev. proc. with details.

But there was not any reimbursement or expense. The arrangement and facts, right or wrong, appears that mom pays for fuel and insurance. But those are the facts and I would report it that way. So what if you report $xx,xxx in fuel expenses paid by mom, how will you substantiate for IRS auditor regardless of the gross up of revenue? It does not change the bottom line. I agree with others that there is room for future improvement, but I would stick with the facts for reporting.

Is anyone aware of a form to claim a refund for deceased Idaho resident? I have not found anything on ATX or Idaho Tax Com.

and determine whether it was marital property or separate property of either spouse.

For previous years probably nothing. Just go forward with correct ownership and reporting.

In a transfer due to divorce the adjusted basis is also transferred. Covered under section 1041.

Top of the class .

That was the rule 20+ years ago. It was repealed and struck from section 453. In order for shareholder to receive installment treatment, the corp must adopt a plan of complete liquidation. The sale of the assets and distribution of the installment agreement to the shareholder (in exchange for his/her stock) must occur within 12 months from the date the plan of liquidation is adopted. See sec 453 for details.

At this point I think you will need cooperation from XH since the return has been filed and by default the estimate goes to him. Anything in the divorce agreement in regards to tax estimate?

How in the world did they come up with 16 years??!!

The default is 4 years for a "positive" adjustment. There is an election to report it all in one year if not over $50,000.

The deciding factor might be whether they paid shareholder wages. The tax consequences of distributing assets upon liquidation will be different for corp. vs partnership.

Penalty does not apply to distributions taken on or after the date taxpayer turns 59 1/2. See section 72(t)(1)

On second thought, most likely not a trade or business so no 1099 issued.

It will either be an expense to sell or addition to basis, but the net will be the same since the property was held for investment.