DANRVAN

Or if not available, look into transcripts.

The way I see it, you are looking at maximum taxable income of about $2,000 which should be taxed at the beneficiary level. You mentioned 10,000 of property sold. As Bulldog mentioned it is safe to say that will be offset by stepped up basis. Report it on Schedule D of the 1041 and call it an unknow asset of decedent. As I understand your post, that leaves $2,000 of potential income to report on the 1041. That will go on K-1 if reported on final 1041 or distributed within 65 days of estate year end. The result should be in $200 - $400 of federal income tax to beni’s,+ whatever your state might tax. If these are the only items reported on 1041, they will offset by any legal and accounting fees….etc; in full proportion. So before you spend to much time digging into this, you should consider the cost vs benefit to the estate and discuss that with them.

Out of curiosity, I did a search on that site and found thread titled "2020 SOLAR CREDIT" In post #7 reference was made to Section 25D(e)(8) with opinion that credit was allowed when hook up in following year. In post #8, #7 was question, but changed his mind and agreed in post #10. In post #12 reference was given to PLR 201809003 in support of disallowing the credit in 1st year. In post #13 it was pointed out that fact pattern and issue addressed in PLR 201809003 was not same as OP in the thread. In post #14 a reference was made from "Office of ENERGY EFFICIENCY & RENEWABLE ENERGY" website Q and A in support of disallowing the credit until hooked up. So my question is, what authority does the Office of Energy Efficiency have when it comes to interpreting the tax code?

I think key here is to point out to them the difference in terminology between section 48 and 25D; placed in service vs installation completed. I would also point out that neither the IRS or case law has defined the term "installation" beyond common definition in this instance. In other words, I am comfortable with it if they are; and a reasonable position has been taken. Therefore I will not deny them the credit.

And I would add to that "absent any case law".

But that does not tell us anything. What authoritative cites did they refer to? Section 25D(e)(8) (A) states : In general Except as provided in subparagraph (B), an expenditure with respect to an item shall be treated as made when the original installation of the item is completed.” That is in contrast to section 48 for a commercial energy credit which specifically states the property must be placed in service. While there might be some uncertainty as to the definition of “installation”, obviously there is a lower standard for claiming a residential credit vs a commercial credit where the term “placed in service” is used. Without researching the legislative history, it appears congress intended to give individuals a greater incentive to go solar by setting a lower standard. In fact, section 25D drops the bar a notch further for the residential credit in stating an “expenditure” is made when installation is completed; meaning the credit is allowed if the installation is completed in year one while payment is made in year two. In regards to the term “installation”, let’s say you put a new engine in a semi-truck and the work was completed by December 31,2022. However, the truck was not licensed and permitted until January of the next year. Depreciation on the engine cannot begin until placed in service in 2023. Now what if tax code said depreciation could begin when “installation is completed”, would you tell client no depreciation until ready and available for service? Or would you start depreciation in year engine was physically installed instead of waiting until the next year when permits were obtained? Getting back to OP, I would have this discussion (and document it) with client and let them decide if they met the definition of “installation”.

Since the employee was under the threshold for FICA/mc, that sounds like the right thing to do,. Then for that employee's W-2, report zero for fica/mc wages, but report the gross in box 1. ATX should then allow you to file with household employee box checked.

I have not seen any authoritative cite to confirm that. Reg 1.104-1 (c) states: “Section 104(a)(2) also excludes damages not in excess of the amount paid for medical care (described in section 213(d)(1)(A) or (B)) for emotional distress”. As referred to, sect 213 allows a deduction for medical expenses paid by the taxpayer for his family. Where does it say affected members of his family must be included in the suit?

Be sure to get a POA and ask for a hold on his account when the notices start coming in.

I would refer that question to a financial advisor.

For a balance due of $27 I would not sweat it.

It would take a Private Letter Ruling to grant an extension of time for the rollover; and to show reasonable cause for a uniformed decision. I think they might have a case. I researched and filed a PLR several years ago and found a lot of favorable cases where mental capacity was compromised. My case was a surviving spouse who inherited husband’s funds, she was granted an extension of time to make the rollover from the date of the ruling.

Stop the check, otherwise it might be awhile before gets his $4,300 back.

Maybe I jumped in to soon. Damages specifically for medical expenses related to emotional distress should be excluded.

Are you saying the amounts related to medical expenses resulting from emotion distress are excluded from the taxable settlement? That doesn't sound right to me. I believe the Emotional Distress must result from physical injury or physical sickness to meet the exclusion, not the other way around. Sounds like in this case emotional distress was caused by mental harassment from employer. If instead, the client got physically sick form chemicals used on the job, and the sickness led to emotional distress, the amount related to emotional distress would be excluded.

I have a retired couple that had one installed with the promise of tax credits, but will never receive the benefit because of their low amount of taxable income.

The tax code does not define the term “installation”. In fact, the credit is specifically allowed by the code for “expenditures” made during the tax year. Section 25D(e)(8) states that an expenditure is made when the “installation” of an item is completed. It does not state that the asset must be place in service, (as is the case for depreciation), only installed. However, in the case of the “business energy credit” under section 48, the credit is specifically allowed as a percentage of the basis of “property place in service” during the year. So in the case of your client I do not see and issue in taking the credit.

Is the Church paid to put on the funeral? Or compensated for paying pastor and other employees? From what I have seen, it is customary for the funeral home to pay for the pastor, musicians etc. as part of the cost of providing the funeral.

How come your Church is paying instead of the funeral home? I have a funeral home client and take care of books for my Parish, have never seen it done that way.

Boot reduces basis, recognized gain increases basis.

Since the assets were held in trust at death of deceased beneficiary, there is no step up in basis upon his death. The beneficiary’s do not have any current legal ownership or rights of the trust assets; they are only entitled to distributions. Beneficiaries do have not basis in a trust; so there cannot be a step up on their death. Even if the house had been distributed out of the trust to beneficiaries, there would not be second step up as governed by the Uniformity of Basis Rule. There is a difference. The shares of stock represent legal ownership, the holder has a right to transfer. Beneficiary of a trust cannot transfer interest.

LLCs cannot be shareholders of S Corps, but S Corps can be members of an LLC. If the best structure for each entity is a Sub S, then each should have own ein, payroll..etc...keep them independent of each other!

There is not enough information to make any suggestions here. Reference is made that two parties are involved in each business, but a Schedule C is filed for each. How are each of the parties involved in regards to capital investment, asset ownership, time involved and compensation? There are concerns if husband is involved in business which also rents property owned by him. Was the property solely his to begin with? Was there a bonified business purpose if wife transferred any ownership to him? What are the long term plans and succession goals for each of these business? How interrelated are the businesses and how much profit from each. I would refer any legal concerns to their attorney.

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