Virginia earthquake added as a Federally Declared Disaster

Bill | November 14, 2011 - 6:30 pm

When there is a Federally  Declared Disaster, 1031 exchanges potentially qualify for to extend the 45-day ID and 180 day exchange periods.  The Virginia earthquake has recently been added as a federal disaster, covering Louisa County VA.  The IRS posts notices of Tax Relief in Disaster Situations here:http://www.irs.gov/newsroom/article/0,,id=108362,00.html.

Special rules are provided for 1031 exchanges when there is a Federal Declared Disaster.  Go to Section 17 of “Revenue Procedure 2007-34” (http://www.irs.gov/irb/2007-34_IRB/ar13.html#d0e2854)  to learn the qualifications and rules for a 1031 exchanger to extend his 45 Day ID and 180 day exchange period dates.

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2011 Rental Property Schedule E and 1099 MISC Alert

Bill | November 14, 2011 - 6:29 pm

Caution – the IRS Form 1040, Schedule E (page 1), which is the main form used to report rental income and expenses, has been drastically changed. IRS has published the final version of the 2011 Schedule E at:  http://www.irs.gov/pub/irs-pdf/f1040se.pdf     and the final version of the 2011 Schedule E Instructions are at: http://www.irs.gov/pub/irs-pdf/i1040se.pdf

The real estate and accounting industry fought a hard legislative battle in early 2011 to have 2011 rental property expenses excluded from Form 1099 MISC reporting by landlords. The 2011 IRS instructions for Form 1099 MISC did not pick up this legislative change, but IRS did publish the following notice of importance to all landlords.
“Legislative Change Affecting 2011 Instructions for Form 1099-MISC ”
http://www.irs.gov/formspubs/article/0,,id=239708,00.html    

Section 3 of Public Law 112-9 repealed section 6041(h) of the Internal Revenue Code, which would have required the reporting on Form 1099-MISC of rental property expense payments made after December 31, 2010  http://www.gpo.gov/fdsys/pkg/PLAW-112publ9/pdf/PLAW-112publ9.pdf.

Therefore, in the 2011 Instructions for Form 1099-MISC, please disregard:
•    Treatment of rental property expense payments under What’s New on page 1,
•    The second paragraph under Trade or business reporting only on page 1, and
•    Rental property expense payments on page 3.

IRS has published the Form 1099 MISC Instructions here: http://www.irs.gov/pub/irs-pdf/i1099msc.pdf

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IRS Tells Executors Form 8939 for 2010 is Due Nov. 15, 2011

Bill | August 17, 2011 - 5:22 pm

A late 2010 law allows executors of the estates of decedents who died in 2010 to opt out of the estate tax, and instead elect to be governed by the repealed carry-over basis provisions of the 2001 Act. This choice is to be made by filing Form 8939, this basis allocation form required to be filed by executors opting out of the estate tax is due by Nov. 15, 2011. An executor must file Form 8939 to opt out of the estate tax and have the new carryover basis rules apply. The IRS expects to issue Form 8939 and the related instructions soon.  But CPAs and executors are still waiting.

IRS Revenue Procedure:  http://www.irs.gov/pub/irs-drop/rp-11-41.pdf
IRS notice:  http://www.irs.gov/pub/irs-drop/n-11-66.pdf

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