DANRVAN

You need documentation that legal ownership was transferred to the charity.

I would not file it in that situation for a number of reasons.

I was sceptical, but case laws says that is correct; a transfer of an appreciated asset is not an assignment of income. HAROLD N. SHELDON, 62 TC 96, 04/25/1974 "An operating farmer who donates crops to a charity before he recognizes income from them is not required to include the value of the crops in his income.2 The farmer has merely assigned to the charity a property asset which has appreciated in value. Neither the harvesting nor the donative transfer of the product of his capital and services is a taxable event. See Campbell v. Prothro, 209 F.2d 331 (C.A. 5, 1954); Stuart A. Rogers, 38 T.C. 785 (1962); and White v. Brodrick, 104 F.Supp. 213 (D.Kan. 1952), appeal dismissed per curiam 198 F.2d 751 (C.A. 10, 1952); cf. Tatum v. Commissioner, 400 F.2d 242, 246-247 (C.A. 5, 1968), affirming"

File it when received and request an abatement of penalty if needed.

I see a potential issue with assignment of income. It will probably depend on the facts and circumstances.

I have not seen any reference in Sec 1.170A-1 that allows a charitable contribution as a reduction of gross income vs reporting on Schedule A. In fact 1.170A-1 refers back to sec 170 which states "A charitable contribution shall be allowable as a deduction only if verified under regulations prescribed by the Secretary." Off the top of my head, I am only aware of one case where a charitable contribution is allowed as a reduction of income which is a Qualified Charitable Distribution, other than a special rule for C Corps. While Sec 1.170A-1 does give an example of grain to a charity, it does not imply that the donated grain was omitted from income vs reported on Schedule A.

Does not sound like a partnership to me. Not enough information to tell what it is. Sounds like legal advice is needed. Regardless of the determination letter, I am curious of how the entity will meet the public support test going forward. Otherwise 990-N is not allowed and 990-PF needs to be filed even if receipts are less than $50,000.

I have not filed the form in that situation, but that is just my opinion.

I have not seen an authoritative cite that either allows it or disallows it, including https://www.calt.iastate.edu/blogpost/gifting-commodities-instead-cash-often-reduces-taxes posted above. While the article does refer to some regs in regards to the the related expenses of the donated crops, it does not cite any authority relating to "rules for gifting a raised commodity directly to the charity" which it describes in the article.

Just use your own business email address, nobody cares.

Yeah, most trust cannot be S corp shareholders, past my bedtime. But how long will the trust hold the stock? Before death or after death of GP and GM? Maybe another way to meet their objective?

Even without a written agreement, there is an implied life estate held by case law.

I would not subject it to SE tax if 'E'R refused to correct the W-2. The payment was more of a taxable benefit rather than wages, even though ss should have been withheld.

I am familiar, but not experienced with a process called an inversion. I believe it works somewhat as follows and is considered an F type reorg: Basically a new corp Y is formed by shareholders of existing corp X. Shareholders transfer their shares to Y in exchange for their shares in X. X then makes an election to be a qualified sub chapter S subsidiary, and therefore X becomes disregarded for tax purposes. Y forms Z, a wholly-owned LLC. which is initially disregarded for tax purposes. Then X is merged into Z, with Z as the survivor of the merger. The key here is that both X and Z are disregarded when the conversion takes place. I would not attempt this without experienced legal guidance. Why can't they meet their objective by transferring existing stock to the trust and M?

Really not enough information here. Need more detail on why " tp didn't like the neighbor hood as it was turning into", and why that compelled them to sell the house. While it might not have to be as extreme as weekly drive by shootings, I imagine there would have to be some unforeseen and unresolvable factor that led to a hardship or an uncomfortable living environment. Rather than just a general distaste for the the way others were living in the neighborhood.

To be honest, I question why you are asking this question, as I find it hard to believe any CPA would "endorse" this idea. If not your client why are you even asking? Basic research will tell you the payment by new employer is included as wages and not deductible to employee in any case.

I had good results working with ATX on connecting to "Authenticator.cc browser extension in Chrome". They have a prompt dedicated for that purpose, the wait time was not long and spent working with a headset on.

I believe the starting point for line 15 is the actual amount of cash received at closing instead of the sale price less amount invested, otherwise gain is recognized on closing cost etc.. The $5,000 of exchange fee reduces the amount of boot on line 15.

Exchange fee is a reduction on line 15. Appliances are not actually like kind property so they should go on lines 12 and 13. No basis for the original land? Maybe it was never allocated and was depreciated as building cost.

Line 16 blank???!!! FMV of like kind property received is a critical part of the computation. The FMV of the replacement property. As I see it, I would not be comfortable with anything provided by prior preparer. Did client happened to mention why the change in preparer?

I am retracting my previous post(s) after giving it some more thought. In my example the deferred gain would be $80,000, recognized gain $10,000 and basis in the new property $10,000. So it appears that in order to have zero basis in the new property the taxpayer would to have zero basis in the old property as Judy mentioned.

After I got the Authenticator.cc browser extension in Chrome pinned, I called ATX support to walk me through the process of connecting to ATX. Now it only takes three mouse clicks and I am in.

Basis of property received is zero whenever FMV of property received is equal to or less then deferred gain. Or look at this way; basis in new equals basis in old less recognized gain. So in my example $10,000 less $10,000 = zero basis.

Also, if there is deferred gain attributed to unrecaptured 1250, you should keep track of it for a potential 25% max capital gain rate if the property is sold.

It is possible that the deferred gain was equal to the replacement property, and therefore zero basis. For example the fmv of property given up could have been $100,000 with a fully depreciated building (zero basis) and land with $10,000 basis = tentative gain of $90,000. If client received in exchange cash of $10,000 and property with FMV of $90,000, then deferred gain = $90,000 and basis in new = zero. The 8824 form year of sale will tell you what the basis should be. The zero basis should be listed in your asset detail and carried forward. I would put a description that indicates it was 1031 exchange property. Also I would scrutinize the 8824 to make sure the exchange was properly accounted for by prior tax preparer.