One thing to consider that hasn't been fully addressed - make sure you're tracking the mortgage principal payments correctly in addition to the interest. While mortgage interest is deductible as a rental expense on the 1065, the principal payments are not deductible but should still be recorded as capital contributions to maintain accurate capital accounts. I learned this the hard way when my tax preparer caught that I was only tracking interest payments as contributions. The principal portion increases your basis in the LLC and affects future distributions or sale proceeds. Keep detailed records separating principal vs interest on each payment - your mortgage statements should break this down monthly. Also, if either partner ever stops making their portion of mortgage payments, you'll need to adjust capital accounts accordingly to reflect who's actually contributing what to the LLC.

This is exactly the kind of situation where having proper documentation from the beginning makes all the difference. I went through something similar with my business partner last year, and we ended up having to reconstruct our entire paper trail mid-tax season. A few additional considerations that might help: 1) **Depreciation tracking** - Since the LLC owns the property, depreciation should be claimed on the partnership return (Form 1065), not on your personal returns. Make sure you're calculating this correctly based on the property's basis in the LLC's books. 2) **State tax implications** - Don't forget that your state might have different rules for how partnership rental income is treated. Some states require separate partnership returns even if you don't need to file federally. 3) **Future planning** - Consider whether you want to eventually transfer the mortgage to the LLC's name. Some lenders will allow this after a certain period, which would simplify your tax situation going forward. The key is maintaining clear separation between personal and business transactions while properly documenting the capital contributions. I'd recommend setting up a monthly process where you record these transactions immediately after making mortgage payments rather than trying to reconstruct everything at year-end. Good luck with your filing!

Just want to add a small tip from my experience last year. When paper filing with Form 8839, make absolutely sure you sign and date the physical return! The #1 reason paper returns get delayed (according to the IRS agent I spoke with) is missing signatures. Sounds obvious but apparently happens all the time. Also, send it certified mail with tracking. The peace of mind is worth the extra few dollars, especially when you're counting on a big refund.

Update: Thanks everyone for the helpful advice! We ended up paper filing our return with Form 8839 and all the supporting documentation. We sent it certified mail as suggested and included a detailed cover letter explaining our situation. I'm still disappointed we couldn't e-File, but at least now I understand why. The IRS really should update their systems to handle these special forms electronically. Seems crazy that in 2025 we're still dealing with paper returns for something as common as adoption!

Former tax preparer here - just to add some history to why these multiple copies exist. Before electronic filing became standard, the different copies served specific purposes: Copy A - Goes to Social Security Administration (your employer sends this) Copy B - Attached to your Federal return Copy C - Your personal records Copy 2 - Attached to your State return Copy D - Employer's records With e-filing, the physical separation isn't really necessary anymore, but the format persists because of legacy systems and because some people still file paper returns. The copies are color-coded on official forms too, which used to help with sorting but doesn't matter much now.

Small tip: if you're worried about keeping track of all these paper copies, just scan them all with your phone and save them to a secure cloud folder. I create a tax folder for each year and scan ALL my tax documents so I never lose them. Most tax software lets you upload the scanned docs directly now too, so you don't even have to manually type in all the info from your W-2.

Great question about K-1 reporting! I went through this exact same transition last year after years of using a CPA. Here are some key things I learned: Make sure you have your prior year passive activity loss worksheets handy - even if your partnership shows a profit this year, you may have suspended losses from previous years that can now be deductible. The passive activity rules are tricky but crucial to get right. One thing that caught me off guard was the basis tracking. Keep detailed records of your basis in the partnership because it affects how much loss you can deduct. Your distributions during the year reduce your basis, and if distributions exceed your basis, you'll have taxable gain. For the QBI deduction (Box 20), pay close attention to the W-2 wages and unadjusted basis limitations if your taxable income is over the threshold amounts. TurboTax should handle this, but it's worth understanding the calculation since it can significantly impact your tax liability. Regarding AMT - I'd recommend running the calculation if you have any AMT adjustment items in Box 17 or if your income is substantial. The AMT exemption amounts are higher now, but real estate partnerships often have depreciation adjustments that can trigger AMT. One final tip: consider keeping a simple spreadsheet to track your K-1 items year over year. It makes it much easier to spot inconsistencies and helps with planning for next year's taxes. The learning curve is steep but definitely manageable once you understand the basics!

Having gone through this exact transition myself two years ago, I'd strongly recommend creating a dedicated folder (physical or digital) specifically for your partnership tax documents. Include not just the K-1, but also: - All quarterly distribution statements - Any amended K-1s (partnerships sometimes issue corrections) - Basis calculations and worksheets - Prior year passive loss carryforward amounts One mistake I made my first year was not carefully reviewing the supplemental information that comes with the K-1. That's where you'll find crucial details about special allocations, depreciation methods, and other items that affect your tax reporting but aren't obvious from the main K-1 form. Also, since you mentioned costs being a concern, consider this a learning investment. Even if you spend extra time this year figuring everything out, you'll be much more efficient in future years. I now complete my K-1 reporting in about half the time it took that first year. If you do run into specific issues that TurboTax can't help with, don't hesitate to consult with your former CPA for just an hour or two of guidance. Most CPAs are willing to do limited consultations, and it might be worth the cost to avoid a costly mistake on complex items like passive activity limitations or QBI calculations. Good luck with your DIY journey - it's definitely doable once you get the hang of the process!

I had the exact same frustrating experience with H&R Block last tax season! The customer service rep telling you Form 4562 won't be available until January 31st is completely wrong - that form has been available since the beginning of tax season. What's actually happening is that H&R Block's software has a built-in workflow that requires you to complete certain prerequisite steps before it unlocks Form 4562. You need to fully complete your Schedule C (business income/expenses) first, including entering all your DoorDash income and selecting that you want to claim vehicle expenses. Here's the key question though: Do you actually need Form 4562? If you're planning to use the standard mileage rate (65.5 cents per mile for 2025), you DON'T need Form 4562 at all. The depreciation is already built into that rate. You only need Form 4562 if you're using actual vehicle expenses AND want to claim depreciation, which is much more complex and often not worth it for most delivery drivers. Before you switch tax software entirely, try completing your Schedule C first with the standard mileage method. You might find that solves your problem without needing Form 4562 at all!

I work as a tax preparer and see this confusion all the time! The Form 4562 issue you're experiencing with H&R Block is definitely a software workflow problem, not a form availability issue. The IRS has had Form 4562 available since the beginning of tax season. Here's what's likely happening: H&R Block's system requires you to complete your Schedule C information first before it will unlock access to Form 4562. The software is designed to follow a logical sequence - business income and basic expenses first, then specialized forms like depreciation. However, before you spend more time trying to access Form 4562, ask yourself this crucial question: Are you planning to use the standard mileage rate or actual vehicle expenses? If you're using the standard mileage rate (65.5 cents per mile for 2025), you do NOT need Form 4562 at all. The depreciation component is already built into that standard rate. Form 4562 is only required if you're using actual vehicle expenses AND claiming depreciation, which involves tracking gas, insurance, repairs, maintenance, and then calculating depreciation on top of that. For most delivery drivers, the standard mileage method is simpler and often more beneficial. My recommendation: Complete your Schedule C using the standard mileage method first. Enter your total business miles, and you should be able to file without ever touching Form 4562. This will likely solve your problem without needing to switch tax software!