DANRVAN

I think you just have to override it directly on Schedule D.

Looks like there should be $30,000 received as boot. Realized gain of $60,000, $200,000 - 140,000 Recognized gain of $30,000 = cash or boot Deferred gain of $30,000 realized gain less recognized gain Basis of new rental $140,000, fmv of new less deferred gain, also basis of old in this case I prefer to run the numbers outside of the program first, then input into 8824 and make sure it comes out right.

And some taxpayers have the impression that it is permanently deferred! 1031's are great for estate planning with step up in basis. They are also useful when real estate is sold in a high income year. Currently have a client who exchanged for multiple properties and now selling off one at a time over course of several years while in retirement. JKL EDIT TO CLARIFY - Quote above attributed to me was actually posted by Max W.

At the direction of Governor Kate Brown, the Oregon Department of Revenue today announced an extension for Oregon tax filing and payment deadlines for personal income taxes and some other taxes closely following the IRS extension declaration. This move is a result of the governor’s priority to keep Oregonians safe and healthy, while also providing relief and consistency for Oregon taxpayers affected by the federal and state COVID-19 emergency. Under the authority of ORS 305.157, the director of the Department of Revenue has ordered an automatic extension of the 2019 tax year filing and payment due dates for certain affected taxpayers as indicated below.

I thought Oregon was tied to IRS for filing and payment dates? So if Oregon does not connect we will need to prepare federal returns in order to properly file for Oregon. Although my practice has not been affected by COVID 19, I would take advantage of the filing delay.

Max, I know enough about foreign income taxes to stay clear away from it. I have seen articles related to your situation in the AICPA Tax Advisor, try googling a search on it.

That sounds right to me. It can be either paid out, or permanently set aside for future distribution.

I am not sure what you are asking Max. Are you saying the distribution is greater than the basis?

LATEST FORM AICPA: We are calling on the Department of the Treasury to immediately give taxpayers an extension of the April 15th filing deadline — and we need your help. Please email Treasury Secretary Steven Mnuchin today at [email protected]. To save you time, you can copy and paste this draft email: Dear Sec. Mnuchin: Treasury must act immediately by extending the April 15th filing deadline to July 15th. Unfortunately, the important payment relief that was announced Tuesday and formalized in today’s notice does not apply to the filing of tax returns and does not reflect the real-world difficulties tax practitioners and their clients are facing. Cities across the country are having to shut businesses down because of the coronavirus pandemic, and it is impossible for every taxpayer and their tax adviser to prepare returns in this environment. Nearly 60% of all taxpayers turn to a tax practitioner to prepare and file their tax returns, and individual and business tax filing deadlines are fast approaching. We need immediate action. We understand that these are uncertain and challenging times for the Treasury Department, and the CPA profession wants to help the system function well. To do that, we need payment and filing relief together. Thank you for your work to guide the country through these difficult days. You may also want to copy your Congressional delegation on your email. You can find your U.S. Senators’ and Representatives’ contact information at GovTrack.com. Thank you for adding your voice to this important call for tax relief clarity.

The relief gives taxpayers 90 extra days to pay their tax, but they must apply for a an extension of time to file after April 15th.

Practitioner Priority Service Hotline?

Since Oregon is tied to the IRS in regards to filing and payment dates, I think we will hear soon that ODR will follow.

That is a whole different situation based on facts and circumstances.

They are not really that different. The client posted it one way and we know it should be some thing different in accordance to tax law. And if they chose to call it a distribution instead of a wage per rev rul 74-44 and case law, I will not sign it and perpetuate their choice for noncompliance.

Tom I believe it goes beyond that. We have a responsibility to prepare a complete and accurate tax return. If a client posted a $40,000 piece of equipment as supplies would you report it as such? Or a $5,000 family vacation as business travel? Rev rul 74-44 and case law clearly indicate we must consider whether a reasonable salary has been recognized; regardless of how the client / bookkeeper has posted it.

Case law has been firm in recharacterizing distributions as wages, following rev rul 74-44. I would ask why this client came to you. Is he shopping for a preparer that will do it his way? In the case of Grey, independent contract services paid to the the sole shareholder of S-corp CPA firm were recharacterized as wages subject to payroll taxes. My question is this, can you sign a return and call it accurate knowing that a payment that should be classified as a reasonable salary has been declared a distribution or contract services?

Unfortunately the crisis started in a country where there is no free press and strict government control. https://www.wsj.com/articles/chinese-doctor-who-issued-early-warning-on-virus-dies-11581019816

Off the top of my head, I do not see a problem. Obtain EIN for estate. Fill out 8855 using EIN for estate in part one and for trust in part two. For tax purposes I believe the trust is now part of the estate, so trust assets do not need to be transferred to estate.

Are you saying the attorney obtained an EIN for the trust or for the estate?

Sorry my misunderstanding, the IRS can close the account related to the EIN but cannot cancel the EIN. Have you filled out form 8855?

The question I have Sara is whether the position of the agency reflects the application of tax law. I am not familiar with title 19 process, but isn't there a five year look back period? (not that makes any difference in tax reporting) There is no question in my mind how the gain/basis would be treated if the sale occurred after mother's death; or if one sibling sold future interest to another while mother was living in the house. But it raises a question when house is sold while mother is alive and goes into assisted living. There could be a case for calling it either a completed gift or claiming a sale of remainder interest. If so, then I would look at the most favorable position for the client that can be supported.

Tracy Lee, How do your numbers turn out on form 8962 by following the instructions? How does column A compare to B?

That does not sound right, at least in the case of my client couple. The amounts reported on their individual 1095 A's are the same. Column B appears to be the SLCSP for each individual, not for the couple combined. In fact, to input according to the instructions, column B is less than Column A (as combined). Therefore they are liable for a repayment instead of a credit since B is about 1/2 of A. The difference is about $4,000 to the client. In looking at 1095-A's for other clients, B is higher than A for them when a single 1095 A is issued to a couple. I checked to see what the SLCSP should be according to https://www.healthcare.gov/tax-tool/#/premium-tax-credit. The amount I came up with for the couple is slightly higher than 2x the amount reported on the 1095 A for each spouse. So in this case, it appears either the "destructions" are wrong, or the amount reported in column B of the 1095 A the for each spouse is wrong.

Thank you for pointing that out, I am about to work on a return with that situation.

Max, as I understand your post the attorney has obtained an EIN for the estate but you wish to make the 645 election for the trust to become the estate, but if you do that the estate will end up with two EIN's. The IRS has a process for canceling EIN's that are not needed, so you could cancel the EIN obtained by the attorney. Try a search for "cancelling EIN".