Has anyone dealt with a situation where the deceased owner hadn't been taking depreciation properly before death? My uncle passed and left me his rental property, but I discovered he hadn't claimed depreciation for 3 years even though he should have. Does the step-up basis just make all that irrelevant now?

Great question about the depreciation situation! I went through something very similar when my grandmother passed and left me her duplex. She had also missed claiming depreciation for several years before her death. The good news is that @Libby Hassan and @Eva St. Cyr are absolutely right - the step-up in basis at death essentially gives you a clean slate. All the missed depreciation from before becomes irrelevant because you're starting with a fresh basis equal to the fair market value at the date of death. One thing I'd add is that you might want to consider filing an amended return for your uncle's estate if the missed depreciation deductions were significant. While it doesn't affect your stepped-up basis, it could result in refunds for the estate that the beneficiaries would receive. My CPA helped us recover about $4,200 in missed deductions from my grandmother's final three years. Also, make sure to start your depreciation schedule immediately once you inherit - don't repeat your uncle's mistake! The IRS expects you to claim depreciation whether you actually take it or not, so there's no benefit to skipping it.

Don't mail your payment with your return! File the return but pay online through IRS Direct Pay. I learned this the hard way with a late 2019 return - mailed check got separated from my return and I got hit with even more penalties while they sorted it out.

Just want to add my experience here - I was in almost the exact same situation with a missed 2020 return that I finally filed last year. The penalties were brutal (about 40% of what I originally owed), but here's what I wish I had known: 1. File the return ASAP even if you can't pay everything right away. The failure-to-file penalty is much worse than failure-to-pay. 2. When you get the penalty notice from the IRS, immediately request a payment plan if you need it. The online application is pretty straightforward and stops additional failure-to-pay penalties from accruing. 3. Keep detailed records of everything - when you filed, when you paid, confirmation numbers, etc. The IRS systems aren't perfect and you'll want proof if there are any discrepancies later. The anxiety of not knowing what you'll owe is the worst part, but once you get through it, it's such a relief to have it behind you. You're doing the right thing by being proactive about it!

FYI - just checked the latest info for ya. For 2024 tax season, here's the deal with refund advances: - Credit Karma advance: ONLY thru TurboTax - H&R Block advance: ONLY if you file with them - Jackson Hewitt: Same deal, their advance only w/ their service - Liberty Tax: Yep, same story Basically, no tax prep company offers advances unless you file thru them. It's how they get customers. Most have minimum refund reqs (usually $500+) and most do some kind of credit check even tho they don't always admit it upfront.

Just went through this nightmare myself! Yes, you absolutely have to file through TurboTax to get the Credit Karma refund advance now. It's frustrating because Credit Karma used to be more independent, but since Intuit bought them, everything's tied together. I ended up switching to FreeTaxUSA this year - no advance option, but their filing fee was only $15 for state returns (federal is free) compared to what TurboTax wanted to charge me. If you really need the money upfront, you might want to compare the total cost of TurboTax + their fees vs. just waiting for your regular refund and maybe getting a small personal loan if absolutely necessary. Sometimes the math works out better that way.

Just wanted to add that if you're doing your taxes yourself using software like TurboTax or FreeTaxUSA, most of them have a section where you can search for "missing tax documents" or "document checklist." They'll ask you questions about your financial activity during the year and help identify what forms you should expect to receive. For bank bonuses specifically, the software usually asks something like "Did you receive any bank account opening bonuses or promotional payments?" and then walks you through how to report it even if you don't have the physical 1099-INT in hand. As long as you have the amount and the bank name, you can usually complete your return. Also, since you found your form online, make sure to save a copy to your computer or print it out for your records. I learned this the hard way when I needed to reference an old 1099 months later and the bank's online system only kept the current year's documents available.

Great advice in this thread! Just wanted to add one more tip that saved me when I was in a similar situation last year. If you're having trouble finding your 1099-INT online through Chase's regular banking portal, try looking for a separate "Tax Center" or "Tax Documents" section that's sometimes only accessible during tax season (roughly January through April). Some banks hide these documents in a completely different area of their website that's not connected to your regular account statements. Chase specifically has had their tax documents in different places depending on when you log in - sometimes it's under "Account Management" and other times it's a standalone "Tax Center" link in the main navigation. Also, if you opened multiple Chase accounts or products, make sure to check each account separately. Sometimes they'll issue separate 1099-INTs for different accounts even if the amounts are small. I almost missed a $25 interest payment from a savings account because I only checked my checking account documents. The good news is that once you find where they keep these documents, you can usually access several years' worth of tax forms, which is helpful for record-keeping!

Just went through this exact process with my consulting LLC that elected S-Corp status. A few key points that might help: 1) You're absolutely right to be frustrated about the $850 fee for zero-activity returns, but unfortunately it's required. However, you can significantly reduce costs by doing some of the prep work yourself. Since you had no business activity, your Form 1120-S will basically be all zeros except for basic entity information. 2) For the EIN notification, I sent a simple letter to the IRS Business & Specialty Tax Line at the Cincinnati processing center. Include your business name, EIN, date of dissolution, and a brief statement that the entity has been dissolved. Keep a copy for your records. 3) Don't forget about your state requirements - many states require a final franchise tax return even with zero activity, and some have specific dissolution tax forms. The penalties for missing these can be worse than just filing them. 4) One money-saving tip: if both LLCs are in the same state and have similar structures, see if your accountant will give you a discount for preparing both final returns together. Mine knocked off about 20% for the second entity since most of the work was duplicated. The whole process is definitely a pain for inactive businesses, but better to close them properly than deal with ongoing compliance issues down the road.

I'm going through a similar situation right now with my small consulting LLC that I'm dissolving. Reading through all these responses has been incredibly helpful - especially learning that you don't actually "cancel" an EIN but just notify the IRS of the dissolution. One thing I wanted to add that might help others: if you're looking to save money on the final tax returns, consider asking your accountant if they offer a flat fee for "zero activity" final returns. I found one who charges $275 for S-Corp final returns when there's literally no business activity to report - just filling in the basic entity info and checking the "final return" box. Also, for anyone else dealing with this, make sure you check if your state has any annual report filings that need to be completed before dissolution. I almost missed my state's final annual report, which would have kept the entity technically "active" even after filing articles of dissolution. The certified mail suggestion for the EIN notification letter is spot on too - that return receipt is your proof that the IRS received your notification. Worth every penny for the peace of mind.