Talking with TaxSpeaker: Video 53
1. The taxpayer owned a rental. The tax payer transferred ownership of the rental to her children. The children assumed the mortgage on the rental property. My question is does this constitute a sale of property. The rental property was the collateral held against the mortgage. I did research the case in Estate of Levine v Commissioner, 634 F2nd 12. The reason this is so important is that if a sale is recognized this would increase taxable income and the taxpayer bought insurance on the exchange. This would cause the taxpayer to pay back almost all of the subsidized premium:< What do you think?
2. Son owns an active trade or business farm operation. He cash rents farm land from his family’s LLC. He is a 25% member of the LLC (other 75% are parents and siblings). Does the family land rent LLC qualify for QBI as self-rental from active trade or business via the son?
3. Is the QBI “election” on rental property one that is lost in the future if not made this year?
4. I have a client with a rental treated as a vacation home with personal use >14 days. There is a carryover of unallowed expenses. The question is whether or not those would disappear on the taxable disposition of the rental or could be used to offset the gain on the sale of the property. Sec.280A(c)(5)(A) mentions “gross income derived from such use for the taxable year”. Pub 527 lists only “enter rents received” for determining the amount of expenses that can be currently deducted. Let me know how you recommend proceeding.
5. Following the death of a taxpayer who prepared his own joint returns the spouse engaged me to prepare delinquent 2016 and 2017 returns. A Schedule E was part of the return and the late taxpayer never took deprecation. I took depreciation on the 2016 and 2017 returns and considered filing a 3115 but didn’t because the returns were not timely filed. In 2018 the rental property is sold. Adhering to the allowed or allowable concept I’m reflecting depreciation that was never taken. My question, can I file a 3115 with a timely filed 2018 return and deduct the missed depreciation on the 2018 return?
6. Client file MFS each year as he earns $40K as a resident, and she is a doctor already, earning #330K. So his student loan payments are $3000 a month less using MFS data. Filing MFJ saves him $22K in taxes. Is it ethical to suggest to him to file 2018 MFS, then after submitting the return to the lender, amending for MFJ?
7. I received a k-1 this 800k in guaranteed payments and 5k in QBI. The partner in this partnership is a Sub-s Corp. If the sub-s is a qualifying business, it has (450k) in QBI which screws up the spouse's QBI. Is there anything to prevent this?
8. Can a deceased taxpayer defer crop insurance that he received prior to his date of death if it would have been in his normal practice to not sell the grain until the following year?
9. If you have a K-1 with QBI information on it - can that K-1 still be subject to NIIT or do you think the QBI information takes that income out of the NIIT calculation
10. I was listening to the tax speaker video today and Bob mentioned that Schedule L on the K-1s needed to be marked as the tax basis, otherwise we would need to file an attachment to show the tax basis. I have two returns that were filed with the GAAP box checked, but I did not know/remember about the attachment. How would he recommend that I send that attachment after the fact? Do I need to file an amended return?
11. When preparing an 1120S, do I always need to put the Sec. 199A income, wages, and unadjusted basis on every K-1? I am confused on what and when these need to be reported.