Great point about documentation! I'd also add that you should gather any records of property taxes you paid during ownership - the IRS views paying property taxes on unused land as another indicator of investment intent rather than personal use. If you researched comparable sales in the area or tracked market values over time, those records can also help demonstrate you were treating it as an investment. One thing to be careful about though - make sure you don't have any photos or social media posts that might suggest personal use (like family gatherings on the property, even if rare). The IRS can be pretty thorough in audits, and anything that suggests recreational use could complicate your investment property classification. Sounds like you're in good shape since you mentioned barely visiting it, but worth double-checking your digital footprint just to be safe.

I've been following this discussion with interest since I'm dealing with a similar situation. One thing I haven't seen mentioned yet is the importance of keeping records of your original purchase decision-making process. When I bought my vacant land in 2019, I saved all the research I did on the area's growth potential, zoning changes, and planned infrastructure improvements. Even though my investment didn't pan out either, having those documents really helped when I spoke with a tax professional. It clearly showed my mindset was investment-focused from day one, not recreational. I also kept records of periodic market value checks I did online over the years, which demonstrated ongoing investment monitoring rather than just buying and forgetting about it. For anyone in this situation, I'd recommend gathering not just the obvious stuff like purchase contracts and property tax records, but also any emails, web searches, or notes you made about why you thought the property would appreciate. The IRS seems to really focus on your intent and thought process, so the more you can document that investment mindset, the stronger your position will be.

4 Don't forget about your 1099 situation if either internship classifies you as a contractor rather than an employee! That completely changes your tax requirements.

Great advice from everyone here! As someone who's helped many students through similar situations, I'd add that since you're making around $64,500 total, you'll definitely be in a higher tax bracket than what each employer assumes when calculating withholdings. One thing to watch out for - California has some of the highest state income taxes, so that January-May period will likely have more tax impact than you might expect. NYC also has city taxes on top of state taxes, though for a shorter period. Given that your parents are claiming you as a dependent, make sure they know about your income levels - it might affect their tax situation too, especially if they're getting certain credits that phase out with higher household income. You should coordinate with them before tax season to make sure everyone's on the same page.

If ur not sure whether u were paid as a employee or contractor just look at ur bank deposits. If taxes were taken out ur an employee (W2). If u got paid the full amount with no deductions ur a contractor (1099). Super easy to figure out!

I've been through this exact situation before! First, definitely contact those employers directly ASAP since the January 31st deadline has passed. For the restaurant and retail jobs, check if you have any old paystubs or bank statements - those will tell you immediately if you were an employee (taxes withheld) or contractor (full payment). If you can't reach the employers or they're unresponsive, you have a few good options: You can use the IRS online account to check your wage transcripts (though 2024 data might not be fully loaded yet), or if you need to file sooner, there are tools like taxr.ai that can help recreate your tax documents from paystubs. The IRS also has procedures for filing without official forms using substitute wage statements. Don't let missing W2s delay your refund indefinitely - there are definitely ways to move forward without them!

I'm new to this community but found myself in almost the exact same situation! My spouse and I formed an LLC partnership in 2023 with big plans for a side business, but between work demands and family obligations, we ended up with absolutely zero business activity in 2024. No income, no expenses, nothing. Reading through everyone's experiences here has been incredibly eye-opening and honestly a huge relief. I was really hoping we could just skip filing anything since we literally did no business, but it's clear from all the penalty stories that Form 1065 is mandatory regardless of activity level. The fact that multiple people have shared nearly identical situations and successfully filed using tax software gives me a lot more confidence. The tip about having your EIN and initial capital contribution documentation ready seems really important - we put in $200 each when we opened the business bank account, so I'll make sure to dig up those records. It's reassuring to know that when there's zero activity, most of the form is just zeros and the process takes 1-2 hours rather than the days I was imagining. Thanks to everyone who shared their experiences - this thread has completely changed my perspective from dreading this filing to feeling like it's actually manageable. Better to spend a couple hours filing zeros than risk thousands in penalties!

I'm new to this community but found myself in this exact situation! My husband and I formed an LLC partnership in late 2023 for a consulting business we planned to start, but due to unexpected circumstances (job relocation and health issues in the family), we had zero business activity throughout 2024. Reading through all these experiences has been incredibly helpful and honestly a relief. I was really hoping we could avoid filing since we literally did nothing business-wise, but the penalty stories are definitely convincing me that Form 1065 is non-negotiable regardless of activity level. The practical advice about using tax software like FreeTaxUSA and the 1-2 hour timeline for completion makes this feel much more manageable than I was expecting. We put in $150 each when we opened the business account, so I'll make sure to have those bank statements ready for the Schedule L reporting. It's reassuring to see so many people in similar situations who successfully navigated this process. Better to spend a couple hours filing mostly zeros than risk those escalating monthly penalties! Thanks to everyone who shared their experiences - this thread has transformed my anxiety about this filing into confidence that it's totally doable.

Quick question - I did something similar with my rental bathroom last year. Does anyone know if I can split the renovation into separate categories? Like the toilet and vanity as 5-year property but the tile work and shower as 27.5 years? Or does the whole bathroom have to be treated the same way?

This is such a timely question! I just went through this exact scenario with my rental property last year. One thing I'd add to the great advice already given is to consider the "unit of property" rules when determining what constitutes a single improvement versus separate components. The IRS looks at whether you're improving a single unit of property (the entire kitchen) or separate units (individual appliances, flooring, etc.). Since you did a complete gut renovation, the structural elements (cabinets, countertops, flooring) would likely be treated as one unit of property and depreciated together over 27.5 years. However, don't forget about the de minimis safe harbor election! If you have receipts showing individual items under $2,500 (or $5,000 if you have applicable financial statements), those can potentially be expensed immediately rather than depreciated. This might apply to smaller items like faucets, light fixtures, or cabinet hardware that were part of your renovation. Also, since your rent increased by $300/month after the renovation, make sure you're properly documenting this as evidence that the improvements added value to the property. This helps support your position if the IRS ever questions the capital improvement classification.