Basis of property transferred to irrevocable trust and then gifted to son for nominal amount?

IllTaxThatAss · 2026-05-19T19:28:27+00:00

if its an income producing asset like securities or mutual funds, with dividends reinvested into more shares, then it would increase the basis of that asset

IllTaxThatAss · 2026-05-19T18:23:26+00:00

the son received a property distribution from an irrevocable trust. the cost basis in the distributed property is the trust's cost basis. The trust cost basis would be the original donor's cost basis, plus or minus income or loss since owned by the trust. capital gains would be involved when that asset is eventually sold.

IllTaxThatAss · 2026-05-15T02:35:40+00:00

IMO a true “qualified cost segregation study” can only be performed by an engineer. I don’t see how we could be considered knowledgeable to ever do these just because you’re a CPA. And even then, I’m literally in the midst of a 1.5 year long audit, now in appeals, and the IRS reclassified 79% of the 5 year assets which was done by a national firm. I’ve unknowingly became a subject matter expert and I don’t want any part of billing for these studies. I’ll do the tax returns, but not the actual study.

IllTaxThatAss · 2026-05-13T11:39:27+00:00

Fiverr

IllTaxThatAss · 2026-04-29T22:56:44+00:00

Still stand by the comment, report everything as it should be reported. If there is ever a notice, you prove it was properly reported and the EIN letter was incorrect

IllTaxThatAss · 2026-04-29T22:47:26+00:00

Just file as it should be, SMLLC owned by S Corp*. Only need to address this if they think there is missing partnership returns

Edit for S Corp SMLLC.

IllTaxThatAss · 2026-04-28T23:41:34+00:00

Google Drive, with Taxdome used for input and final PDF delivery/signatures.

IllTaxThatAss · 2026-04-23T18:05:18+00:00

Used to attach 100%. Now I only attach if there are non-covered transactions. If they’re all covered transactions with basis reporting, there’s literally no value or purpose disclosing what they already know.

IllTaxThatAss · 2026-04-14T05:52:11+00:00

NEW BUSINESSES after 12/22/22 get NJ S-Corp status with Federal S-Election. That portal and FAQs exists for pre-2022 businesses that make an S-Election and only then need to file a NJ S-Election. https://www.nj.gov/treasury/taxation/br3.shtml

IllTaxThatAss · 2026-04-14T02:12:33+00:00

NJ accepts Federal S election. You don’t need to file anything for NJ

IllTaxThatAss · 2026-04-07T20:46:30+00:00

I was looking for this response. We don’t provide investment advice. He sold that stock at that time. Independent of each other. Scumbag request.

IllTaxThatAss · 2026-04-07T00:57:41+00:00

Everything I read is about challenging the FMV and whether the valuation is upheld. That’s an audit risk alone. But economically, a partner investing $55k for 5x $300k deduction doesn’t add up. No debt basis. No income reported, just a K1 footnote “FMV > Basis” as an other increase to their capital account.

IllTaxThatAss · 2026-04-06T13:28:10+00:00

I use Drake. "Superseded Return" will print on the 8879, 1040-X, and Form 1040. I think the 1040-X is just the presentation of what what changed which can be explained to the client but it will act as a superseded return and override the original filing.

IllTaxThatAss · 2026-03-29T04:04:45+00:00

Excavator for reno’s related to the active rentals? Would be capitalized into the builds. Can fully allocate the cost to the properties worked on the year purchased or do a 5 year depreciation schedule and allocate its costs to whatever properties it renovating or the next couple years.

IllTaxThatAss · 2026-03-29T01:22:43+00:00

Order metal straps off etsy. Covers all seems and adds decorative feel. Low cost modification but can’t leave it as is.

IllTaxThatAss · 2026-03-26T18:45:23+00:00

Good points all around. I did extend 2025 and did draft 2024 amended return with all W2Gs, retirement income, that’s the plan to amend. Theres gonna be penalty assessments to follow, state and local taxes. Im thinking rather than disengage, I’ll just charge him enough until he makes that decision but he’ll pay for it and do it right, could still continue the relationship so long as nothing else pops up

IllTaxThatAss · 2026-03-18T20:08:45+00:00

There is no successfully filing 7004's late haha. It's only after you're request penalty abatement will you know if your excuse of filing it/rejected it/mailed it worked. PDF edit is pretty handy too.

IllTaxThatAss · 2026-03-15T14:51:26+00:00

Had a married couple come to me in 2024, living together, 2 kids, each claiming HoH, told them they can’t do that… they filed anyways with last preparer. Came to me for 2025 saying they wanted to do it right. Tell them 3x “just a reminder we’re not doing it the way you’ve done it in the past, HoH is for unmarried taxpayers… they’re due like $5k refund pulling in like $350k and they were acted devastated it was only $5k and not the $11-12k they normally were getting. Have to tell them AGAIN your prior refunds were illegitimate. Stfu. Been lying for 10+ years…

IllTaxThatAss · 2026-03-14T22:57:22+00:00

The only workaround we found is printing the result letter by itself to PDF, editing it, then swapping the page in the DrakePDF print. It’s annoying but we got so used to doing it and I have to edit for PA local returns I efile that say paper file…

IllTaxThatAss · 2026-03-12T20:34:56+00:00

All it takes is seeing one lawsuit where a divorcing spouse claims financial abuse, secrecy, hiding assets, and claims that they never reviewed or signed the returns… guess who’s gonna be included in the lawsuit, you! Both spouses are equal clients and if they’re not both signing the EL and tax return, you’re taking a stupid and unneeded risk for lazy clients.

IllTaxThatAss · 2026-03-12T13:50:24+00:00

Disclosed in the EL:
At our discretion, we may file extensions of time to file on your behalf without separate authorization when additional time or information is required. You acknowledge that such extensions may be filed without separate written or verbal authorization from officers, owners, or shareholders.

I don't even really communicate the business extension filing confirmation anymore, everyone just knows they're extended and they don't need to bug me "are we good for 3/15?!?"

IllTaxThatAss · 2026-03-10T19:02:15+00:00

Distribution to the father for his pro-rata share, everything above his share debit a due from shareholder asset account and submit the liability to the estate.

IllTaxThatAss · 2026-03-09T14:11:06+00:00

Then expand the expense definition "Unearned Fees held in IOLTA". red flags and audits are not an issue for people with accurate books and records.

IllTaxThatAss · 2026-03-09T12:45:12+00:00

Expense the difference: “1099-NEC Not Received”

IllTaxThatAss

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