Thom

The couple moved out of state. Even though they were receiving the first year's rent up front they hired a management firm because they wanted someone to check on the property periodically and to manage maintenance/repairs if anything was needed. The rent must have passed through the management firm because that is who issued the 1099. I'm trying to come up with a correct way to handle this that won't lead to an IRS letter but I'm not coming up with one.

I understand what you're saying about the store. But in theory the store would be ongoing and have more sales the next year. This is their only rental. I guess I'm having a hard time imagining a 2013 Schedule E with 0 rent income and nearly 20,000 in rent returned. But that would represent what actually occurred.

I have a couple who moved in Jan 2012 and had a contract to sell their previous house. Buyers couldn't obtain loan and decided to rent until they were able. Buyers prepaid all of 2012 rent in Jan 2012. In the fall of 2012, they prepaid all of 2013 rent. After filing their 2012 return, buyers were able to obtain mortgage and the house was closed in Feb 2013 with all of the remaining year's rent returned to buyer at that time. The couple received a 1099 for 2012 showing all of the rent for both years. I am wondering how to show this refunded rent on the return. Can I take it off of 2012 Sch. E even though it wasn't returned until 2013?

I have a client with about $18K in startup costs and meets the 2010 requirements to expense $10000 and amortize rest. I am not certain how to do this in ATX. I have tried inputting the costs in asset entry but cannot figure out how to make it take the 10000 credit. I rarely do corp returns anymore so this is the first time I've encountered this problem. Any advice from those who have dealt with this would be appreciated.

Thanks for your reply. After taking a break from this, I kind of cleared my head and came to some of the same conclusions. Even though his terminology was that he "contributed" the houses to the IRA (that didn't make sense to me either, but didn't know what laws were out there in the 80s) but I'm with you that the IRA must have purchased them. Like you said, it seems like I'm still going to have to get him to go through old returns though to see if he had any basis in the funds used for purchase. I'm sure he was good with the other qualifications as the bank trust dept managed the property. Thanks a bunch for your help.

I've never known how the houses got in an IRA. I didn't get my CPA license until '94 so I'm a little blurry about laws prior to that. I do know that he had a CPA firm & trust dept of a bank set it up for him. But it's in my lap now & I'm trying to figure out how to handle it.

I have a client who contributed two rental houses to an IRA in late 80s. They were distributed back to him in 09 and he received a 1099 for appraised value of property at time of dist. It seems to me that the taxable amount of the dist will be the 1099 amount less whatever his basis was when he contributed it. I assume also that his basis would be lowered if he took the $2000 deduction when he put it in the IRA (I think that was the allowed max amount back then). I’m just wondering if I’m on the right track with my thinking before I have him digging through 20 year old records to find old basis of houses & whether he took a deduction when it was contributed to IRA. Am I going about this correctly? Thanks for any help.