DANRVAN

Do know if there is a way to confirm that the payments have been made without looking at bank statements or online banking?

I am considering direct debits of estimated tax payments for some older clients. Has anyone here had any issues using direct debits for that purpose? It seems like there has been some discussion here before but my search came up empty. Thank you for any comments you might have!

I take that to mean they are revocable trust and reporting on 1041 is optional.

RR 89-51 involved a similar situation where the use of a vacation home was donated to a charity: "Neither A nor B is entitled to a charitable contribution deduction. The gift of the right to use property is not a deductible contribution"

Why would you want to leave the capital gains in the trust? Normally there is less tax if the capital gains are taxed to the beneficiary instead of paying capital gains rates at the trust level. If the trustee is allowed to include the capital gains in DNI, then trust will take a related income distribution deduction and basically pay tax on the remaining amount.

I question why that would be the best practice considering the extra expense of filing a 1041 and K-1 when there are alternatives. What is the net benefit to the client after the extra reporting cost?

Refer to Reg 1.170A-7 (a) for a transfer of less than entire interest in property.

Why is the the living trust filing a 1041 while the grantors are still alive?

yes There are special rules, but not off the top of my head.

At the top of the worksheet and line 2.

Not for breeding stock, the only option is to defer the gain by replacing them. As WITAXLADY pointed out, breeding stock qualifies for schedule J.

Sell a SMLLC? How? What?! Is there a relation between the buyer and seller?

Sounds more like a revocable trust and makes more sense. For sure confirm with the attorney. Are there any depreciable assets that could have been stepped up back in 2002? Possible 481(a) adjustment?

I have not seen any indication that it was.

Are you sure it is an irrevocable trust? Why would they set up an irrevocable trust under those circumstances? Is there a large taxable estate? What happens when wife passes away? Have you read the trust document or checked with attorney? Maybe it is actually a grantor trust that has been treated otherwise? Just doesn't seem right to me.

Sect 736(a) does not make sense for a rental partnership. The partnership should be advised to make a section 734 adjustment under a section 754 election,

Most likely In most cases irrevocable trust are not included in the estate of the decedent as it appears here. Therefore no step up in basis.

Sounds straight forward to me. A major component was replaced.

If you take the position that it is not part of a building system per Reg §1.263(a)-3 (e)(2)(ii)(B)(2), why would you use 20 years instead of 15?

Looks to me like it falls under Sec. 1.263(a)-3(k))(1)(iv) "Returns the unit of property to its ordinarily efficient operating condition if the property has deteriorated to a state of disrepair and is no longer functional for its intended use"

Depends on state law.

I believe it would, unless it falls under the Sec. 1.263(a)-3(h)); lessor of $10,000 or 2% basis safe harbor rule.

If the partnership made the payment to the former partner it is considered a redemption of his interest by the partnership, instead of a buyout of his interest by the remaining partners.

If you are using ATX, go to elections and use the tab for "Dispositions, Disasters...". Then use the first option on top of the page. If you are deferring income from sale of calves due to drought use the 3rd one.

And after considering Reg §1.263(a)-3 (e)(2)(ii)(B)(2) I have to agree. The thought that a septic tank for a single dwelling rental would be classified as a Building System instead of a land improvement never crossed my mind.