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My parents built a house a few years ago. Their cost basis

My parents built a house a few years ago. Their cost basis was about $2 million. I suspect the house is now worth about $3 to $3.5 million. If they were to pass away, we (the kids) would get the house and under current law, not owe any estate tax since it is under the $5 million threshold (is that the right current threshold?). What happens to the tax basis at the time the property transfers to the kids? Does it get marked up to the current market value at the time we receive it or does it retain it's original value until we sell it?Should we do anything before they pass away to make the transfer of the property tax free? I.e. put it in a trust or put the kids' names on the deed sooner rather than later?

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Lane

JD, MBA, CFP, CRPS

Doctoral Degree

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Small, cash basis S-Corp with one shareholder, who's also an

Small, cash basis S-Corp with one shareholder, who's also an employee. Accountable Reimbursable Expense Plan already in place. Principal place of business is an office-in-home. Haven't taken depreciation on the office since becoming an S-Corp several years ago. Is Form 3115 required for the catch up depreciation since the corp is a cash basis taxpayer? What is the best way to account for (current and future ) depreciation of the home office? Would it be appropriate/correct for the depreciation expense simply be reimbursed to the shareholder-employee just like any other out-of-pocket reimbursable expense, then the SCorp deduct that depreciation expense on the corporate tax return(s) w/out the need to list the (shareholder's) asset on the books and/or the return(s)?Also, the shareholder-employee (personally) owns a vehicle that is used solely for the business. Since the auto is a personally owned, although not personal-use, vehicle, it has not been put on the company books. Would it be appropriate/correct to simply allow the business to pay for auto expenses for as long as it uses the vehicle? Is it necessary/recommended that the S-Corp rent the vehicle while it is using it? What do you recommend as the best income tax treatment for the depreciation/auto/auto expenses?I aimed to be as clear/concise as possible, but please feel free to lmk if you need any further details. Thanks in advance!

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PDtax

Owner

Master's Degree

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I have a question regarding firpta taxes with a real estate

I have a question regarding firpta taxes with a real estate purchase. If the buyer does not live in the property for the 2 year period required who is responsible for paying the 15% tax?

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Lane

JD, MBA, CFP, CRPS

Doctoral Degree

17,686 satisfied customers
My friend sent in his Massachusetts state income tax

My friend sent in his Massachusetts state income tax for 2013 in Massachusetts for the mortgage forgiveness debt relief act and debt cancellation. Massachusetts told him that they don't recognize qualified principal residence indebtedness as the Federal government does. Is this correct and will he need to pay an additional tax? The Federal government had forgiven his debt.JA: The Accountant will know how to help. Is there anything else important you think the Accountant should know?Customer: What steps would he need to take?JA: OK. Got it. I'm sending you to a secure page on JustAnswer so you can place the $5 fully-refundable deposit now. While you're filling out that form, I'll tell the Accountant about your situation and then connect you two.

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emc011075

Tax advisor and Enrolled Agent

Bachelor's Degree

4,192 satisfied customers
Issue is regarding once in a life time sale of home. ,

Customer: ***** *****, Issue is regarding once in a life time sale of home. JA: Thanks. Can you give me any more details about your issue? Customer: I thought there was an amount you could subtract from gains in sale of home once in your lifetime. JA: OK got it. Last thing — Tax Professionals generally expect a deposit of about $32 to help with your type of question (you only pay if satisfied). Now I'm going to take you to a page to place a secure deposit with JustAnswer. Don't worry, this chat is saved. After that, we will finish helping you.

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Lev

Retired

Bachelor's Degree Equivalent

24,192 satisfied customers
I converted a C corp to a sub S corp in 2012 under America

I converted a C corp to a sub S corp in 2012 under America Taxpayer Relief Act of 2012 . Question is if the 5 year extension allows exemption from built in gains after 2016 or is 5year extension only for sub S corp established 2008 and prior?

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Lev

Retired

Bachelor's Degree Equivalent

24,192 satisfied customers
US 2014 taxes: If education credits are extended to 2014, can

US 2014 taxes: If education credits are extended to 2014, can I take credits if my AGI is over $180K?

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taxmanrog

Master's Degree

836 satisfied customers
selling a personal residence allows a exclusion of a gain.

selling a personal residence allows a exclusion of a gain. do you have to buy a new home to exclude the gain?secondly, if you rent a home do you have to depreciate it, or can you just deduct expenses.

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Lev

Retired

Bachelor's Degree Equivalent

24,192 satisfied customers
Hi, Would you be so nice and tell me how could I transfer

Hi, Would you be so nice and tell me how could I transfer a personal property from Spain to an LLC? Or withmy personal name?" Most treaties provide for the exemption of gains from the sale or exchange of personal property. Generally, gains from the sale or exchange of real property located in the United States are taxable", as they mention in the page 47. How should I transfer the property so as to be legal in both countries? Is there any treaty between both countries? Could you tell me the rate of the death tax in Delaware? Which taxes do I have to pay according to the value of the initial contribution? Any death tax realted to the initial and final value of the company? As Ashlea Ebeling mentions in the Forbes magazine in her article "Where not to die in 2013" "Thanks to the fiscal cliff tax deal (the American Taxpayer Relief Act), the federal estate tax exemption of a generous $5 million per person, indexed for inflation, is now permanent. So for 2013, up to $5.25 million of an individual’s estate will be exempt from federal estate tax, with a 40% tax rate applied to any excess over the exemption amount." http://www.forbes.com/sites/ashleaebeling/2013/01/28/where-not-to-die-in-2013/ In the INFORMATION BRIEF, Research Department, Minnesota House of Representatives updated in September 2014 by Joel Michael Table 3 State Estate Taxes Applicable to 2014 Deaths (as of June 30, 2014) State - Exemption Amount - Basis for Rate Schedule - Top Statutory Rate Delaware - $5,340,000 - State specific - 16% (indexed for inflation,based on federal exemption) (http://www.house.leg.state.mn.us/hrd/pubs/estatesurv.pdf) So there is an exception for estates up to $5, 340,000 in the state and federal death tax. Is that correct? Thank you, ***** *****

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Lev

Retired

Bachelor's Degree Equivalent

24,192 satisfied customers
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