Finance

Have Finance Questions? Ask a Financial Expert Online.

Ask an Expert,
Get an Answer ASAP!

Finance
This answer was rated:

Husband and wife submitted a joint tax return. However

This question is for Lev...
This question is for Lev. Husband and wife submitted a joint tax return. However husband in a year prior to his death opened an art business with him as a painter. Thus, he attached schedule C to the joint return for his new business. Only one person can be put down on schedule as an owner of the business. Thus, I presume the business was his -- and thus after his death all of his painting in this business received the stepped up basis? Next year he lived only for 2 months and the wife did not file the schedule C for him for this year or any of the following years. Even though the schedule C was not filed on the year of death - can the wife still use the stepped up basis for these paintings lost in the fire many years later? I guess my concern would a failure to file schedule C on wife's part would disqualify this as a legitamate business.
Show More
Show Less
Ask Your Own Finance Question
Answered in 24 minutes by:
11/21/2017
Lev
Lev, Tax Preparer
Category: Finance
Satisfied Customers: 30,327
Experience: Personal Investment, Tax Preparation
Verified

Thus, I presume the business was his -- and thus after his death all of his painting in this business received the stepped up basis?

While that might be correct - the fact of only one spouse participating in business has no direct relation to the ownership of business assets...

For instance - if they were divorced - absence of other conditions - the court would likely divide all assets equally as they were created during the marriage and martial funds were used for that business.

That is OK if the wife did not maritally participated in the business and that was only husband's schedule C.

But that doesn't mean the wife had NO ownership rights on business and business assets.

While - it is possible that spouses agreed to have these business and these assets owned by husband only.

Even though the schedule C was not filed on the year of death - can the wife still use the stepped up basis for these paintings lost in the fire many years later?

I do not think that makes any difference - because very likely - the husband had no any business activity during last period of his life and not filing schedule C has no relation to the ownership.

But it would be reasonable to presume that the husband actually owned assets he created - and these assets are included into HIS estate.

But again - generally - your arguments are not relevant for determination.

We need to concentrate on the fact of the ownership only.

Ask Your Own Finance Question
Customer reply replied 23 days ago
thank you. In this case there was an understanding that it was husband's business as he was the one painting the paintings, doing marketing, organizing exhibitions etc.
I guess what you are saying --- that it does not matter whether there was or was not any business activity in the two months of the year preceeding the husband's death and/or whether the schedule C was filed for these two months. As long as the business was not officially dissolved during these two months -- then the wife can still claim a stepped up basis on his paintings -- as long as there was an understanding that the business and its assets belong to the husband prior to his death.

You are correct - it was husband's business as he was the only one who materially participated.

But that is not directly related to ownership of business assets.

The ownership is based on state law and agreement between spouses.

Whether there was or was not any business activity during the last period of his life is not relevant.

There is no requirements to dissolve the business officially while that might be recommended.

Stepped up basis is based on the ownership and will ONLY apply to assets which were owned at the time of death and as such were included into decedent's estate (regardless if the estate tax return was actually filed and regardless if there were any estate tax due).

If assets were purchased using martial funds - it would be reasonable to assume they are owned jointly,

but if assets were created by one spouse only with relatively little cost involved - it would be reasonably to classify these assets as owned by that spouse.

Lev
Lev, Tax Preparer
Category: Finance
Satisfied Customers: 30,327
Experience: Personal Investment, Tax Preparation
Verified
Lev and 87 other Finance Specialists are ready to help you
Ask your own question now
Ask Lev Your Own Question
Lev
Lev
Lev, Tax Preparer
Category: Finance
Satisfied Customers: 30,327
30,327 Satisfied Customers
Experience: Personal Investment, Tax Preparation

Lev is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Rakhi Vasavada

Rakhi Vasavada

Financial and Legal Consultant

2,608 satisfied customers

Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years

Megan C

Megan C

Certified Public Accountant (CPA)

2,218 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

Manal Elkhoshkhany

Manal Elkhoshkhany

Tutor

1,919 satisfied customers

More than 5000 online tutoring sessions.

JKCPA

JKCPA

CPA

844 satisfied customers

Bachelors degree and CPA with Accounting experience.

Eric

Eric

Financial Manager

559 satisfied customers

Loan servicing, counseling and real estate expert. Foreclosure Expert and Financial Planner.

R. Klein, EA

R. Klein, EA

Accountant

480 satisfied customers

TurboTax Expert. QuickBooks Certified Pro Advisor

Dimitry K., Esq.

Dimitry K., Esq.

Attorney

332 satisfied customers

NASD Licensed Rep, 1997-2001, Business Attorney

< Previous | Next >

Related Finance Questions
Given a $350,000 home and my age of 66 what is a ballpark
Given a $350,000 home and my age of 66 what is a ballpark amount I should expect from a reverse mortgage? we do not have children so there is no need to leave an estate.… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,592 satisfied customers
I'm setting up a chart of accounts on quickbooks online.
Hi, I'm setting up a chart of accounts on quickbooks online. Under what detail type would I include comissions? … read more
Carter McBride
Carter McBride
LLM
75 satisfied customers
Thank you very much. What about a vehicle that we bought
Thank you very much Carter.What about a vehicle that we bought under my name because I am the one that had the good credit before. I did not want to declare it because it is my daughter's car and she … read more
Carter McBride
Carter McBride
LLM
75 satisfied customers
I am negotiating an offer in compromise in Los Angeles, CA.
I am negotiating an offer in compromise in Los Angeles, CA. The IRS officer is asking me for two items; 1) He wants paystubs of my daughter that lives with me to use her income to qualify my offer and… read more
Carter McBride
Carter McBride
LLM
75 satisfied customers
I know the annual gift tax exclusion amount. It's $14,000
I know the annual gift tax exclusion amount. It's $14,000 for 2017. However, what if the client parents are out of the county, is there any tax implication for gifting or amount limits?… read more
TaxRobin
TaxRobin
Vocational, Technical or Trade School
1 satisfied customers
Lane and I hope you're having a great holiday season so far.
Hi there Lane and I hope you're having a great holiday season so far. No need to answer this evening unless you're working but I may not be able to read until tomorrow. .... I just wanted to see if th… read more
Lane
Lane
JD, MBA, CFP, CRPS
Doctoral Degree
37 satisfied customers
I am from Missouri .My is for SBA loan experts I applied for
I am from Missouri .My is for SBA loan experts I applied for the loan. While this process I was arrested for failoure to appear in court for expired car tag.will my loan application rejected? In the f… read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
862 satisfied customers
I have a question regarding the upcoming taxes if I issue an
I have a question regarding the upcoming taxes if I issue an invoice now for a future service does it need to be with applied tax (this is now, before the vat is in power) … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,592 satisfied customers
Banking question: Two years ago I changed my sole
Banking question: Two years ago I changed my sole proprietorship to an LLC. I didn't realize that this is considered a "new business" and a new bank account must be created. So the bank found out and … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,592 satisfied customers
I have a business where I sell automotive supplies blind.
I have a business where I sell automotive supplies blind. Most everything I sell goes outta state. But the items that stay in Arizona I need to pay state taxes on. I tried to pay but the website aztax… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,592 satisfied customers
I am employed by a company that offers a 401k but
I am employed by a company that offers a 401k but participation is voluntary. The company contributes 3% of annual income to the plan. The vetting is by percentage with 20% being 2 years.Question: If … read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,251 satisfied customers
Canyou give me advice on how to handle moving my in-law's
Canyou give me advice on how to handle moving my in-law's money to an interest bearing investment to pay for part of their nursing home (rest home) care? Their money is currently in accounts that are … read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
862 satisfied customers
No i am good. I made a deposit late, i forgot about it in
I made a deposit late, i forgot about it in the file cabinet.....i deposited it a month late. What should i do to explain … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,592 satisfied customers
I am to select between two education loans repayment
I am to select between two education loans repayment programs with lower monthly payments and accruing interest added to the principal. The '#1' is capitalizing the accruing interest annually, as the … read more
socrateaser
socrateaser
1,442 satisfied customers
Is it possible to over-contribute to a 401(k) plan? Since
Is it possible to over-contribute to a 401(k) plan? Since the beginning of 2017, I've been setting aside enough of my paycheck each month to reach the $18,000 maximum. However, I changed jobs a few mo… read more
TaxRobin
TaxRobin
Vocational, Technical or Trade School
1 satisfied customers
I am an only child and my mom is single - If she were to
I am an only child and my mom is single - If she were to quitclaim deed her house to me, I'm assuming I would take on her cost basis in the house. If that is the case, I fairly confident that her cost… read more
TaxRobin
TaxRobin
Vocational, Technical or Trade School
1 satisfied customers
I need accounting help to calculate annual profit for my
I need accounting help to calculate annual profit for my ecommerce business. A friend wants to buy it. I have the data, but I don't know how to best present it for use in determining my asking price a… read more
Emilee Weaver
Emilee Weaver
Controller
Masters of Professional Accounting
70 satisfied customers
If I have a loss from sales of business property (form
If I have a loss from sales of business property (form 4797), can I carry forward for the next year? For how long can I carry forward? Which line should be informed that on form 1040?… read more
Lev
Lev
Tax Preparer
30,327 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x