DANRVAN

I have a similar situation. Partnership makes distribution to trust; trust makes distribution to individual. Trust deducts tax prep and income distribution deduction. Very simple. Trust also follows 65 day rule since partnership makes distribution right at year end.

The second question, are there any computations on the tax return affected by tax exempt interest such as SS income or MAGI?

Just curious, are the two teenagers from a previous marriage so wife did not get 100%? Under that scenario in Oregon, wife would get 50% and teens 25% each.

You referred to the first amount from line 8, can you be more specific as to where the last four amounts came from?

Could be an issue of marital vs nonmarital property depending on where the funding of the property came from. There are cases where 100% ownership turned out to be 50% ownership; and 1/2 step up bass instead of full step up in basis. Estate attorney should have sorted it out.

You can put it directly on line 1b without explaining.

If you are working on the individuals 1040, just let it flow from the K-1 to SE, then enter on line 1b of form SE, which is specifically designated for the CRP subtraction; same as you would if it came from Schedule F of 1040. The 1065 preparer should show as other information the amount of SE income from CRP, especially if going to non-client.

If the spouse living apart had gross income of $5 or more then he or she would need to file. It appears to me that 1.161-1 states that Gross Income does not include non-taxable social security income, So if spouse in OP has non-taxable social security as only source of income, then the extra deduction should be allowed as I see it.

Yeah a real cliffhanger! I wish somebody who has "read the book" will tell us how it's going to end.

Then it goes on to say " If (a) or (b) applies, see the instructions for lines 6a and 6b to figure the taxable part of social security benefits you must include in gross income." From there lines 6a and 6b will determine the amount of SS included in gross income. I interpret that to say the non-taxable amount of Social Security is not included in gross income. That appears to agree with the definition of gross income per § 1.61-1 per my last post.

Hold on until you read 1.161-1. § 1.61-1 Gross income. (a) General definition. Gross income means all income from whatever source derived, unless excluded by law. That seems to say the excluded amount of SS is not included in gross income!!

I think that is actually referring to the non -taxable portion of Social Security income.

Your state probably does not care either. I had a similar situation with an Oregon client that went from partnership to sole proprietor and kept the same business name. They track the business by identification number not the name.

per 151(b) "if a joint return is not made by the taxpayer and his spouse, and if the spouse, for the calendar year in which the taxable year of the taxpayer begins, has no gross income and is not the dependent of another taxpayer" sec 61 (a)....."gross income means all income from whatever source derived" I believe SS is gross income as defined by section 61(a). So it looks to me like a no go.

What is your source for claiming this deduction?

Most likely the trust will need to file a separate tax return if the income is $600 or more. That will depend on the type of trust and distributions from the trust to the individual. Depending on facts and circumstances, the trust might claim an income distribution deduction and prepare a K-1 for the individual.

I think that depends on how he registers with the state, IRS does not care.

Unfortunately since the business has become a new entity, it cannot use the ein of the former partnership.

I agree with Pacun. That does not sound right or possible. So your are saying ATX is showing a standard deduction of 15,750 on line 12? If so, I believe you should uncheck the box to make it 14,350 as that is the amount that should be allowed.

Does anybody here use a voice over text software that you would recommend? My mouth is way faster than my fingers when it comes to typing. I am looking for something that is downloaded; not web based. Thank you for any ideas you might have.

If federal form 706 has not or will not be filed, you should not have any limitation to claiming them on form 1041 for the estate. Are you filing a "1041" at the state level? Oregon basically follows the federal code for estates; so you cannot claim the same deductions on both OR-706 and OR-41. Off the top of my head, I can not thing of any deduction that would be allowed on both federal forms 706 and 1041; no double dipping!

From what I understand, that rule applies if the property was not previously used in a trade or business. Per reg 1.167(g)-1 In the case of property which has not been used in the trade or business or held for the production of income and which is thereafter converted to such use, the fair market value on the date of such conversion, if less than the adjusted basis of the property at that time, is the basis for computing depreciation.

I don’t think there is any authoritative answer to your question, but I believe you should pick up where you left off in the past; including cost and accumulated depreciation. That way you will have a record of accumulated depreciation if the property is sold in the future. By using the remaining depreciation life, your client will receive a larger deduction per year than if you start over with 27.5 years. As for as the improvements go, I would list them separately and begin depreciation on the date the house was put back in service as a rental.

Cherry for me please, alamode!!!

See section 121(d)(5) for details.