I think whoever told him that is confused. There is a provision that an employer can give employees tax-free disaster 'relief' payments if the employees are affected by a disaster.  But that is completely separate from paying wages for work performed.

You said they sold their rental after 15 years, but your "placed in service" date shows much more than 15 years. When you first entered the asset in the first year they were your client, if you did not enter the "prior depreciation" then, that report won't show the "prior depreciation" because it doesn't know what happened before you had the client.

You need to determine if the 18 year old is a dependent or not.  For example, did the 18 year old provide over half of his own support? https://apps.irs.gov/app/vita/content/globalmedia/teacher/worksheet_for_determining_support_4012.pdf   If the 18 year old is not a dependent, nothing in your post indicates he can't claim his siblings.  If he can claim them, he would receive the benefits, including the refundable Child Tax Credit and the Earned Income Credit.

You need to determine if he is an employee or self employed. How does the foreign company view him - an employee or a contractor? https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee  

@Just-Lisa-Now- wrote:   You may have to print out the 2021 Depreciation report and go through each asset entry worksheet   I could be wrong, but only remember seeing this complaint for pre-2018 vehicles (50% bonus and before the increased Luxury Limits).  *IF* that is the case, then that may be the only thing we need to watch out for.      

@larryweigel wrote: We had two people working on the same return (simultaneously)   When I read that, this was the first thing that popped into my head.  https://www.youtube.com/watch?v=wyKQe_i9yyo&t=47s          

You must not have liked yesterday's answers. https://proconnect.intuit.com/community/proseries-tax-discussions/discussion/t-p-refinanced-425-000-00-home-of-425-000-for-a-lower-interest/00/244899  

Is the "prior depreciation" correct? When it was a rental, has it always been 100% business usage?  Or did the business percentage vary (such as it was a very small percentage for a number of years. With a disposal date in January, you still get a 1/2 month of depreciation.  What is the full-year depreciation amount?

Okay, you got me curious, so I looked it up.  😂 IRS Notice 2020-50: This election cannot be made or changed after the timely filing of the individual’s federal income tax return (including extensions) for the year of the distribution. https://www.irs.gov/pub/irs-drop/n-20-50.pdf#page=13  

@abctax55 wrote: Since @Just-Lisa-Now-  resurrected this thread (thanks...)  A quick question IF anyone knows off-hand - can this election be made on a delinquent 2020 return?  OR, an an amended return?   The "election" is to have it all taxed in the year of the distribution.  Is that what you want to do?  The default (no election) is to spread it out over 3 years. If you do want the election to have it taxed all in one year ... I don't know.  If I remember correctly, I couldn't find anything directly in §2202 of the CARES Act.  However, sometimes there are peripheral rules that state restrictions in a different code section or regulations.   EDIT:  But I'm sure it's in Publication 17.  🤣