This thread has been incredibly informative! I'm in a similar situation with my father's estate that just completed probate last month. One thing I wanted to add that might be helpful - if any of the inherited assets are dividend-paying stocks, make sure you understand the record date vs. payment date timing around the death. We discovered that my father owned several utility stocks that had declared dividends before his death but weren't paid until after. These dividends were considered "income in respect of a decedent" (IRD) as mentioned earlier and didn't get the stepped-up basis treatment. The executor had to include them as estate income, and we each got our share reported on Schedule K-1. Also, regarding the brokerage documentation, I'd recommend specifically asking for a "date of death portfolio statement" rather than just account values. Our broker (Charles Schwab) was able to provide this showing each individual holding with quantities, prices, and total values as of the exact date of death. This became our official documentation for the stepped-up basis calculations. The whole process definitely has a learning curve, but having all the right documentation upfront makes everything much smoother down the line. Best of luck working through everything with your sister and cousin!

This is such a comprehensive discussion! As someone who just started dealing with my aunt's estate, I'm finding all these details incredibly helpful. One thing I wanted to ask about that I haven't seen mentioned - what happens if some of the inherited stocks were purchased through a dividend reinvestment plan (DRIP) over many years? My aunt had been reinvesting dividends in several blue-chip stocks for decades, so there are dozens of small purchases at different prices throughout the years. Do I need to worry about tracking all those individual purchase dates and prices, or does the stepped-up basis rule simplify this by just using the total shares owned times the date-of-death price? Also, has anyone dealt with fractional shares in this situation? Some of her DRIP positions include partial shares, and I'm not sure how those get valued or if they complicate the basis calculation. The brokerage hasn't been super clear about this when I've asked. Thanks again to everyone for sharing their experiences - this thread has been more helpful than anything else I've found online!

This is such a helpful thread! I'm actually going through the exact same situation right now. Based on all the discussion here, it sounds like the consensus is that FSA limits are indeed per employer, but many HR departments don't realize this or have internal policies that override it. I'm planning to approach my new employer's HR with the IRC Section 125(i) reference and IRS Information Letter 2016-0077 that several people mentioned. It's frustrating that something this important isn't clearly spelled out in the main IRS publications, but at least now I have the right citations to make my case. One question I have - for those who successfully convinced their HR departments to allow the full contribution, did you face any pushback during tax season or audits? I want to make sure I'm not setting myself up for problems down the road, even if the IRS technically allows it.

I'm dealing with this exact situation right now and wanted to share what I found after doing extensive research. The confusion seems to stem from the fact that while the IRS allows separate FSA limits per employer, many payroll systems and HR departments aren't set up to handle this properly. I ended up contacting my tax attorney who confirmed that FSA contribution limits are indeed per Section 125 Cafeteria Plan, which means per employer. The key insight is that the $3,200 limit (for 2024) is placed on what each employer can allow you to contribute through their plan, not on your total annual contributions across all employers. However, there's a practical consideration here - make sure you can actually use all the FSA money. I learned this the hard way when I had to scramble to spend down $1,800 before year-end after switching jobs mid-year. The "use it or lose it" rule doesn't care how many employers you had. For anyone trying to convince their HR department, I found that referencing Treasury Regulation 1.125-5 alongside IRC Section 125(i) was most effective. It clearly states that each employer's cafeteria plan is separate and subject to its own limits. Good luck!

Have you considered filing for an extension? If you're running up against the deadline and aren't sure about the signature requirements, you could buy yourself some additional time to either get a proper wet signature or research alternative filing methods. Just a thought!

Just wanted to share what worked for me in a similar situation last month. I had a client who couldn't come in due to mobility issues, and after researching extensively, I found that the IRS does offer some flexibility for situations like this. You can actually have your client sign a Power of Attorney (Form 2848) electronically, which allows you to sign Form 1096 on their behalf. The POA can be obtained through secure email with proper authentication. This is completely legitimate and I've used it successfully for several clients who couldn't provide wet signatures. Alternatively, if the client can manage it, you could do a video call while they sign the form at home, then have them mail it back to you in a prepaid envelope. This ensures you get the original wet signature the IRS requires while accommodating their health concerns. Both approaches have worked well for me and kept everything compliant with IRS requirements. Hope this helps with your deadline!

My company did this to me last year. Turned out they had me listed as living in Nevada (no state income tax) when I actually live in California (big state income tax). Had to pay almost $3k at tax time. Make sure u check ur address on file with HR!!

This is definitely stressful but you're not alone - this happens more often than you'd think! The empty state tax box does mean no state taxes were withheld all year. First thing I'd do is check your final paystub from 2024 to confirm the year-to-date state withholding shows $0.00. A few things to consider: 1) Double-check that your employer has your correct home address on file - sometimes they withhold for the wrong state or no state if there's an address mix-up, 2) Look into whether your state offers any payment plan options if the amount is large, 3) Definitely get this fixed with payroll ASAP for 2025 so you don't face this again. Also worth noting - if this was your employer's error and not something you requested, you might be able to avoid underpayment penalties by explaining the situation to your state tax department. Document everything in case you need to appeal any penalties later!

Quick question - has anyone dealt with selling shares that are held in an LLC taxed as an S-Corp? I'm getting conflicting advice on whether the installment method can be used in that scenario.

This is a great question that many people don't realize until they're in the middle of it! One important thing to add to the excellent advice already given - make sure you keep detailed records of ALL payments as they come in throughout the year. Create a simple spreadsheet tracking each payment date, amount, and which milestone it corresponds to. Also, consider setting aside 25-30% of each payment for taxes (depending on your tax bracket). Since you're receiving money throughout the year, it's easy to spend it and then get hit with a big tax bill. I learned this the hard way with my first installment sale - ended up scrambling to find cash for quarterly estimated payments. One more tip: if any of your original shares qualify for QSBS (Qualified Small Business Stock), you could potentially exclude up to $10 million or 10x your basis from federal taxes. Definitely worth checking if your company was a C-Corp with gross assets under $50 million when the stock was issued.