DANRVAN

That works, filed a couple today. But note that the submission ID does not change to 2022 until you create the new efile.

Meant to say over number of days used for any purpose.

But that is the reality of cash basis accounting. And since December 31 has come and gone, it is too late to plan around it.

That doesn't matter in the case of of a rental which is also used for personal purposes. The ratio for determining the deductible expenses is number of days rented over total number of days used (for any purpose) during the year. So there is no allocation of expenses per sect 280A(e)(1). The ratio is zero over the number of personal use days = zero.

That would be the case if it were not also used as a second residence / vacation home. In this case, I believe the expenses are allocated based on the total days used. For 2021 there were zero rental days, therefore zero expenses. For 2022 the days used in Jan and Feb will be allocated as rental days in determining the amount of deductible expenses for 2022.

That is a good point Sara, but I have yet to run across a situation where 481a depreciation adjustment did not net a tax benefit. If the adjustment increases a PAL, which passes through to to the son, his basis would be increased by $9,090.

correct

So a 2032(a) election is out of the question. If this is the initial return have you considered using accrual accounting, short tax year...etc.

TP does not recognize any taxable income on transfer unless son assumes liabilities. In that case you have a partial sale / gift. Also no depreciation recapture, son assumes the basis and tax attributes of parents. But you need to file form 3115 on parents return to pickup the omitted depreciation as a 481a adjustment.

That is true. Assume you had capital gains after stepped up basis.

I thought you were referring to "Numerous Family Townhouses" as NFTs So in your example, say t/p buys a duplex, lives in one and rents other, then converts personal to separate rental. Then a few years later converts both to a single family unit. In that situation, for depreciation purposes you would have three separate assets: the original 1/2 rental, the one half converted from personal, and the remodel/conversion to a single family unit. Each would have a separate depreciable life beginning on the date when placed in service. If the single unit dwelling is later sold, the basis would be the combination of the three less respective accumulated depreciation.

Not that I know of. I have not followed NTFs real close, but do know the tax consequences depends on facts and circumstances. For example a creator is taxed at ordinary rates and also SE tax if in the trade or business. On the other hand an investor treats it as a capital asset that might be considered a collectible. Also, since NTFs are often bought an sold with crypto-currency there is another potential layer of gain or loss on the transaction.

Sleeping under same roof every night is not a requirement. What counts is where the child or parent resided, or would have resided during a temporary absence. See section 152(c)(4)(B) and reg 1.152-4(d)(3) for clarification.

Oregon Public Broadcasting; I like their news coverage, stories and documentaries, but so much the classic music. I should also make a donation.

Agree with Gail, can you put a value on it?

Unfortunately, it sounds like he did not seek tax advice until after the fact; and the incentive money he received has all been spent?

I don't see an argument for basis reduction. He did not incur a forfeiture or reduction in capital as in the case of an easement or involuntary conversion. Therefore it looks like taxable income. The amount he will spend on making the conversion will add to his basis; in a separate transaction.

And in this case it would go to the father per section 152(c)(4)(B).

Just curious, is this a real or hypothetical situation? Since the grantor did not retain the right to revoke, alter...etc, without consent, then it would not be included in his estate or receive a stepped up in basis.

I see that as a question for a financial advisor, which I am not.

I see an ethical issue with you withholding knowledge of the tax code from your client that would be to his advantage. I believe there is a professional standard to advise your clients on the best options available to them under the code. If you have an ethical problem in filing a return with a legitimate deduction or credit, you should decline the engagement. So how did you answer question 9(c) of form 8867 in this situation in carrying out your obligation of due diligence?

That would be the case if both parents tried to claim the child per the tie breaker rules, Sect 152(c)(4)(ii)

By nature of the beast, a revocable trust become irrevocable upon the death of the grantor and therefore included in his estate. The trust and the grantor are basically the same entity. Therefore in your case, son inherited property from mom and receives stepped up basis. Upon his death the trust becomes irrevocable and goes to his estate. His estate also receives stepped up basis. Look up the definition and operation of revocable trust.

For starters take some continuing ed courses. Then when you feel confident and competent try a simple one. Hopefully you will have an experienced peer to review it for you.

What was the relationship between the 1st person to die and the 2nd one five years later?