DANRVAN

To be correct you should override to show 1/2 year for 1065 and 1/2 year on schedule E. Yes. IRS is not tracking it! Partners basis is the basis of assets contributed. As of date of contribution to partnership.

You probably won't find a black and white answer in the code, but there appears to be a justification for claiming structural components. If you were to build a separate structure with the sole purpose of accommodating the panels I think you would have a strong case. But if the structure served another significant purpose; then I believe it becomes a question of how much (if any) of the cost could be allocated to the installation of the panels. 25D (d)(2) "(2)Qualified solar electric property expenditure. The term “qualified solar electric property expenditure” means an expenditure for property which uses solar energy to generate electricity for use in a dwelling unit located in the United States and used as a residence by the taxpayer. 25D (e)(2)Solar panels. No expenditure relating to a solar panel or other property installed as a roof (or portion thereof) shall fail to be treated as property described in paragraph (1) or (2) of subsection (d) solely because it constitutes a structural component of the structure on which it is installed.

I would take a look at it both ways. It looks like using the installment election your client would recognize about $2,000+ capital gain in 2022; and $18,000- in year 2029; vs recognizing gain of $20,000 in 2022. How would the extra $18,000 effect 2022 income taxes? Any capital losses or $0 percent capital gain bracket to consider?

Limited partners are given limited voting rights. They are limited to voting on certain issues, but not on the day to day operations of the company. That should be spelled out in the partnership agreement.

For sure, hauling tools and materials.

Sounds like your client might be a ahead to use actual mileage in that case. Are the vans left overnight at place of business, then driven to and from job sites? Maybe taken home at night for security purposes? Are there any maintenance records etc. showing odometer readings from beginning of year to end of year? Just some thoughts. Helpful or not, good luck!

Too late to do anything at this point unless the Corp wishes to recognize gain on the distribution of the installment note to the shareholder. The distribution of the installment note to the shareholder is a taxable event to the S-Corp; unless they meet the exception under sect 453(h)(1). In order to meet the 453(h)(1) exception, the corp. must adopt a plan of liquidation before the installment sale is closed. Then there is a 12 month time period to compete the liquidation.

Sounds to me like they are now conducting all their business activity in state #2 and should re-register there.

From what I am following in this post, a disallowed passive loss carryforward loss was dropped in 2016. The property connected to the loss might be sold and free up suspended losses. Even though 2016 is closed for refunds or assessments; It my understanding that the closed years can be amended to bring a carryover forward to an open year.

Looks like she should meet the three HHH test: -unmarried on 12/31 -paid over 1/2 cost of keeping up a home -and had a qualifying person live with her for more than1/2 of the year.

As long as total expenses exceeded the reimbursement, the only amount taxable should be the 2021 tax benefit which was reimbursed in 2022. Also you mentioned the taxpayer was deceased, so sounds like IRD possibly reported by his estate on form 1041.

I think you are missing part of the equation. What was the actual amount of LTC expense reported on 2021 schedule A?

Frist you need to go back to 2021 and compute total itemized deductions less standard deduction. The 2021 tax benefit would not be greater than that amount.

On second thought, I need to retract that statement regarding taxable income and crawl into my hole for the night. Negative taxable income in the prior year would reduce the tax benefit from the deduction in the prior year. So I believe the amount recognized would be the lower of the first three items stated above; reduced by negative taxable income.

And that amount would be the lower of: -the actual deduction taken for LTC -total medical deductions below the floor -total itemized deductions less the standard deduction -taxable income

The wages he receives as a shareholder/employee do not count as gross income from farming and therefore do not count towards the special estimated tax payment rules of section 6654(i) for farmers. Even if he met the estimated tax exception for farmers, he would have to either make his estimated payment by January 15th; or file and pay by March 1st.

It appears the amount of expense claimed as a deduction in 2021 and reimbursed in 2022 needs to be claimed as income.

I don't see why not. Looks like line 1 should be negative 2,870, Then lines 2,5, and 8 should = 2,000. As those numbers should appear on the 2021 worksheet.

Most likely he has purchased capital stock in a section 521 coop. Would be treated as an investment in any case.

Hope that works out for you.

If average is $50,000 or less for 2023, 2024 and 2025 you would not need to file. Instead of practicing for a return that may or may not be filed, why not spend time instead with a 990 CPE course? I would also keep in mind the practice returns will likely become public information posted for viewing on the IRS EO lookup website.

That is one of the reason I keep most depreciation schedules on a separate program (EasyACCT) so I am not relying on ATX for permanent records.

As an extra incentive, you can inform them that if they fail to designate a "PR", the IRS can appoint one for them under reg 301.6223-1. The PR does not have to be a partner.

If you haven’t already done so, you need to inform your clients of the BBA audit rule implications. Then let them decide whether to make the election or not. Partnerships with trust as partners cannot make the election, but an election can be made if the partner is an estate of a deceased partner. I prepared a generic letter that included the following: For partnerships that elect out of the BBA audit rules, any IRS audits will be conducted at the individual partner level. Any resulting assessments will also be made at the individual partner level. If a partnership makes a valid election out, the applicable statute of limitation for assessment of tax will be determined at the partner level and is further determined separately for each partner. If the election out is not made, the applicable statute of limitation for assessment of tax is instead determined at the partnership level.

It might depend on his future intentions. Does he plan on renting out the property? Does he have any other business that will use the buildings?