DANRVAN

and farm tractors last way longer than 7 years, over the road trucks way longer than 3 years.......

I use asset class 00.3 Land Improvements with a 15 year life. Class 00.3 includes non-municipal sewers. A septic tank is part of a sewage system that includes pipes to the tank and pipes from the tank to the perforated pipes in the drainfield. I have not seen an authoritative cite to challenge this position. The fact that a modern cement tank will last longer than 15 years is a mute point for tax depreciation purposes (they will for sure last longer than older metal tanks that were prone to rusting out).

versus Tax Code. I have never been a follower of The Tax Book. Although I tried it out once.

The code is fairly clear on this. A corporation is in existence if it retains a bank account and is in the winding down process regardless of state law, therefore a return is required. The final distributions are reportable transactions. Per 1.6012-2 (1) "shall make a return of income regardless of whether it has taxable income or regardless of the amount of its gross income." (2) "A corporation in existence during any portion of a taxable year is required to make a return. If a corporation was not in existence throughout an annual accounting period (either calendar year or fiscal year), the corporation is required to make a return for that fractional part of a year during which it was in existence. A corporation is not in existence after it ceases business and dissolves, retaining no assets, whether or not under State law it may thereafter be treated as continuing as a corporation for certain limited purposes connected with winding up its affairs"

When if doubt file it.

That is correct. A corporation is required to file a return as long as it is in existence, whether it has any income, expenses or not.

Recently had a similar situation. https://www.irs.gov/individuals/request-deceased-persons-information#transcript

I have never had to to that, but try duplicating the return and switch wife to primary taxpayer. Then change husbands SS# to something like 111-11-1111 so the duplicate return cannot be filed by mistake. Use the duplicate strictly for printing the estimates.

How can there be a recorded sale if they did not receive any consideration? They received nothing for their shares? Am I missing something here?

The toys most likely did not increase in value "over time". Therefore basis of gifts would be equal or greater than sell price. Taxpayer is entitled to making a reasonable estimate. Unless the toys were collector items, I would accept a reasonable estimate of basis = sell price and call it good.

That means you will have more time to share your knowledge with us here!

Per IRS (also supported by case law): Topic no. 414, Rental income and expenses Security deposits – Don't include a security deposit in your income if you may be required to return it to the tenant at the end of the lease. If you keep part or all of the security deposit because the tenant breaks the lease by vacating the property early, include the amount you keep in your income in that year. If you keep part or all of the security deposit because the tenant damaged the property and you must make repairs, include the amount you keep in that year if your practice is to deduct the cost of repairs as expenses. To the extent the security deposit reimburses those expenses, don't include the amount in income if your practice isn't to deduct the cost of repairs as expenses. If a security deposit amount is to be used as the tenant's final month's rent, it is advance rent that you include as income when you receive it, rather than when you apply it to the last month's rent.

And on the other side of the transaction, since amount paid by buyer = seller's basis, then buyer's basis = same, per § 1.1015-4 as partial purchase / partial gift.

Amount realized = amount received. Per 1.1001.1 (e) "Where a transfer of property is in part a sale and in part a gift, the transferor has a gain to the extent that the amount realized by him exceeds his adjusted basis in the property." OP implied that amount received = basis. Substance over form.

I am curious is to how the estate made $200,000 in the first year given that any sale of assets should have been mostly offset by step up basis.

I don't see how $10,000 is going to go very far in reducing $200,000 of income. Although if $10,000 was paid after the transfer to heirs, then it might be considered a distribution in lieu of cash since it was to their personal benefit.

If your are saying the amount realized = basis; then gain = zero. He can't be taxed on consideration he never received.

I don't see where the OP's issue is discussed in that article. It really does not address the claim that any of the loan fees are nondeductible. As I read it, the focus of the article is is on which fees are not considered interest expense subject to the Sec. 163(j) limitation. If in fact the fees in the OP are not deductible, they would become part of the acquisition cost of the property (basis). Without any authoritative cite, I would amortize over the life of the loan.

I am not familiar with this, can you share your source?

I think I follow you now. Show correct beginning balance and actual distributions for the year.

Sounds to me like there will be a liquidating distribution, which needs to be treated as payment in full for the exchange of shareholders stock.

Does the estate have any other income to report? A couple thousand dollars of stock proceeds could easily be offset by attorney and PR fees; above any unknown basis.

My wife!

I'm not completely clear as to what you are asking. If the distribution was taken in 2024 then I would not show it on the 2023 tax return, since there would be both a cash balance and retained earnings balance as of December 31 2023.

This is still not clear. How was the $79,000 accounted for? I think you have stated 19,908 for legal fees; back taxes of 8,398; amount paid to older brother 28,095. Based on that, where did the remaining 22,599 go? Who incurred the legal fees? The county or the brothers? Were there additional taxes that brother paid and was credited for? This is not a typical settlement statement since one party is both a buyer and seller, so you really need to look at the substance of the transaction.