Discussion:Income from Sale of Grain to Report on Estate 1041
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| Revision as of 05:38, 3 November 2009 EasternPA (Talk | contribs) ← Previous diff |
Current revision Dennis (Talk | contribs) (Agree with Ser B) |
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| {{ForumReplyPost|UserID=WIBadgerCPA|Date=2 November 2009|Text=Livestock and farm crops raised by a cash basis decedent prior to death are inventory of the estate and not Income in Respect to Decedent. As long as the crops weren't sold or pledged before the farmer dies, ownership does not cause them to be IRD. It qualifies for a basis adjustment to FMV at death under the general rule of IRC Sec. 1014}} | {{ForumReplyPost|UserID=WIBadgerCPA|Date=2 November 2009|Text=Livestock and farm crops raised by a cash basis decedent prior to death are inventory of the estate and not Income in Respect to Decedent. As long as the crops weren't sold or pledged before the farmer dies, ownership does not cause them to be IRD. It qualifies for a basis adjustment to FMV at death under the general rule of IRC Sec. 1014}} | ||
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| + | {{ForumReplyPost|UserID=Dennis|Date=3 November 2009|Text=Agree with Ser Badger. Do not agree with sales proceeds as valuation. Many different ways to approximate date of death value. Most common would be the amount farmer could borrow on the unharvested crop as at date of death. Different rules apply if farmer was renting out the land.}} | ||
Current revision
Discussion Forum Index --> Advanced Tax Questions --> Income from Sale of Grain to Report on Estate 1041
Discussion Forum Index --> Tax Questions --> Income from Sale of Grain to Report on Estate 1041
| 2 November 2009 | |
| I am preparing an Estate 1041 for a farmer who passed away last September. When he died, the farmer still had some unsold grain in his grain bin and still had crops in the field to be harvested. When the state estate tax return was prepared, the attorney who prepared it valued the unsold grain and the growing crops at the value they were subsequently sold for.
In preparing the 1041 for the estate, I believe that the sales price of the grain/crops would show up as income for the estate, and we would deduct any related farm expenses. My boss seems to think that since the grain/crops were valued at their subsequent sales price on the state estate return they receive a step up in basis, and would result in no net income. I am having trouble agreeing with this since the estate assets in question were ordinary income producing assets. I took a look at Publication 559 and the IRC and haven't had any luck finding an answer to this. Anyone have any experience with this or have someplace else I can look for support? Thanks!! | |
WIBadgerCPA (talk|edits) said: | 2 November 2009 |
| Livestock and farm crops raised by a cash basis decedent prior to death are inventory of the estate and not Income in Respect to Decedent. As long as the crops weren't sold or pledged before the farmer dies, ownership does not cause them to be IRD. It qualifies for a basis adjustment to FMV at death under the general rule of IRC Sec. 1014 | |
| 3 November 2009 | |
| Agree with Ser Badger. Do not agree with sales proceeds as valuation. Many different ways to approximate date of death value. Most common would be the amount farmer could borrow on the unharvested crop as at date of death. Different rules apply if farmer was renting out the land. | |
