DANRVAN

OP is not clear to me, is she talking about recharacterizing a contribution or converting an account? There is a difference .

That is correct, the conversion is irrevocable per TCJA.

House Ways and Means Committee has proposed putting a padlock on the back door.

Also applies to Schedule C and 1065 filers who have reduced their tax liabilities over the years with the magical section 179 deduction.

K-1 goes to deceased partner. If he died during the year then more than one K-1 is issued since the partnership tax year for the deceased ends on DOD.

That has also been my experience with Oregon Employment Dept., but auditor was happy to have it done by correspondence (email) vs 4 hour round trip to my home office.

The general rule is never let an auditor and client meet, especially for a form you prepared. How about requesting a correspondence audit?

But there are potential pitfalls that would not occur if a front door roth contribution was made. For a taxpayer with existing traditional IRAs, the recharacterization can become a significant taxable event due to the pro-rata rule. Also need to keep in mind the 5 year rule.

That would be a corporate liquidation where the shareholder exchanges his stock for remaining assets. So your client would have a capital gain equal to $20,000 less basis in stock per section 331(a). Technically, form 966 should be filed and 1099-div showing the $20,000 liquidating cash distribution in the specific box. Final paper work also needs to be filed with the state.

Looks like your are engaged in Client Advisory Services (CAS) at level II or level III. CAS is recognized as a specialized area of practice by the AICAP. It would be a violation of ethics for me to perform that level of CAS without proper training or experience. At a minimum, would need work with client for a year or two at level one before advancing to the next level and give out that kind of advice.

I think it would be hard to justify $0 rent as fmv from brother. How much time did he actually spend overseeing the project? I would probably draw the line on Jan 2021 for placed in service. Can she prove they were ordinary and necessary per sect 162 as well as percent used for the rental? So no rental write off due to PAL limitation.

The allowable loss is 45,000 - 30,000 = 15,000. Section 469 does not change the amount of step up in basis.

So is there going to be a closing statement showing who was the actual seller/owner of the property sold? If mom is compensated for fmv of her property, then the net tax result would be the same, although son would be the actual seller of the property mom deeded to him.

Attorney for sure, given the dollar amount involved she needs legal advice which we as CPA's cannot give out. Although a moot point now, why was that necessary? Was an attorney involved? The estate may or may not have any ownership depending on whether B held Joint Tenancy or Tenancy in Common, that is where legal advice is needed.

Actually the gift is only included in the estate if the decedent retained an interest in the asset or revocable power per section 2035.

If fmv of mom's property was greater than 170k, then partial sale and partial gift.

How much of that was for mom's property?

It is a part sale / part gift. See § 1.1015-4 for details.

per reg 1.911-3(a) Earned income is from sources within a foreign country if it is attributable to services performed by an individual in a foreign country or countries. The place of receipt of earned income is immaterial in determining whether earned income is attributable to services performed in a foreign country or countries.

That does not sound correct if the income was earned outside of the USA. The code or regs should clarify.

Judy I don't believe that applies in this case since the IRS reg's take a front loading approach to a partial gift/sale transaction (basis is first applied to the sale) versus the apportionment method. In this case, since the basis in hands of transferee is less than transferor, then carry over of character rules should not apply. I am sure that is spelled out and buried in the 1250 regs but don't have time now to look it up. If on the other hand the IRS had adopted the apportionment method, the basis would be split between the sale and gift. The gift portion would then retain the transferor's character.

A phone call won't work for a 990. You have to make a written request and show some reasonable cause such as change in directors. If the organization is run by volunteers that helps your case; as well as pointing out the financial impact of the penalty on the limited resources that would otherwise be used for charitable purposes. You also need to outline the measures that will be taken to prevent future late filings. It is a slow process.

Yes it is possible. They can be used to make a "back door" Roth contribution when income is a limiting Roth factor.

You are correct, a gift tax return is required. However, parents probably will not owe any gift tax.

Son will need to keep track of depreciation allowed or allowable by parents for any 1245 or 1250 gains.