I've dealt with this exact situation multiple times! The "cost basis not reported to the IRS" checkbox is actually pretty common, especially for stocks purchased before 2011 when brokers weren't required to track cost basis for all securities. Here's what you should do: Use your own records to determine the cost basis and report it accurately on your tax return. When you enter these transactions in TurboTax, look for the option that says something like "Cost basis not reported to IRS" or similar - they have specific fields for this scenario. A few important points: - This won't trigger an audit just because the basis wasn't reported to the IRS - Make sure your sale proceeds match exactly what's on the 1099-B - Keep any documentation you have of your original purchase prices - If you're missing some records, try logging into your Fidelity account to see if you can access older statements or trade confirmations The key is to make a good faith effort to report the correct cost basis. Don't stress too much about this - it's a very routine situation that the IRS deals with constantly. Just be honest and thorough with your record-keeping.

This is such a common situation - you're definitely not alone in dealing with this! I went through the exact same thing with my Vanguard account last year and was equally stressed about it. The good news is that TurboTax handles this scenario really well. When you get to the investment section, there's a specific workflow for entering 1099-B transactions where the cost basis wasn't reported. You'll see checkboxes or dropdown options that let you indicate this situation, and then you can enter your own cost basis data. A couple of practical tips that helped me: - Double-check that your sale proceeds match the 1099-B exactly (that's the number the IRS definitely has) - If you use Fidelity's website, try looking under "Accounts & Trade" > "Account Features" > "History" - they often have trade confirmations going back several years - For any missing records, I created a simple spreadsheet showing how I estimated each cost basis with notes like "researched historical price on MarketWatch for approximate purchase date" The "cost basis not reported" checkbox is actually the IRS telling you they expect YOU to provide this information, not a warning that something's wrong. You're doing exactly what you're supposed to do by using your own records. Just make sure to keep documentation of how you determined your numbers, and you'll be fine!

One thing no one has mentioned - make sure you file in the right order! Start with the oldest year first and work forward. This is important because some tax attributes carry forward from year to year. If you have any business losses, capital losses, or credits that might carry forward, filing out of sequence can really mess things up.

Really glad to hear you're getting your life back on track! Six years of unfiled returns might seem overwhelming, but it's absolutely manageable and you're taking the right step by addressing it now. A few key points to keep in mind: Since you mentioned having steady W-2 income with proper withholding, there's a good chance you may have been owed refunds for some of those years (though you can only claim refunds for the last 3 years). The penalty situation might not be as bad as you think if you don't actually owe much. Before jumping into anything, I'd suggest requesting wage and income transcripts from the IRS for each of those years - you can do this online at IRS.gov. This will show you exactly what income the IRS has on file for you and help you gather any missing documents. It's free and can really help you understand your situation before you start filing. Given your income level and the fact that you had withholding, you might be able to handle some of the simpler years yourself using tax software for prior years, but definitely consider getting professional help for at least the first year to make sure you're doing everything correctly. The peace of mind is worth it, and they can often spot opportunities for penalty abatements or other relief you might not know about. You've got this! Taking action now is the hardest part, and it sounds like you're in a much better place to handle it than you were before.

One thing that hasn't been mentioned yet is the importance of understanding how partnership distributions affect your basis calculation. I learned this the hard way when I received a large distribution from one of my real estate partnerships last year. When you receive distributions from the partnership, they reduce your tax basis but don't necessarily change your capital account. If your distributions exceed your basis, you could have immediate taxable gain even if the partnership itself is profitable and your capital account is positive. This is another reason why tracking your actual basis (not just relying on the capital account) is so important. I almost missed a taxable distribution because I was only looking at my capital account balance on the K-1, which showed I still had plenty of "equity" in the partnership. Your partnership agreement should specify how distributions are allocated and whether they're considered returns of capital or something else. Make sure you understand this before you receive any large distributions, especially if you're planning to take money out for other investments.

Great question about tracking basis during the year for distribution planning! I've found a few approaches that work well: 1. **Quarterly basis estimates**: I created a simple spreadsheet that tracks my beginning basis, then adds/subtracts items as they occur during the year. I add my estimated share of partnership income (based on monthly/quarterly reports from the partnership) and subtract any distributions I receive. 2. **Partnership reporting**: Better-managed partnerships will often provide quarterly or semi-annual statements that include estimated basis calculations for each partner. If your partnership doesn't do this, it might be worth asking them to start - especially for partnerships with active distribution policies. 3. **Conservative cushion approach**: Since distributions that exceed basis create immediate taxable gain, I always assume my basis is lower than my rough calculations suggest. I try to keep a cushion of at least 20-30% of any planned distributions in my estimated basis before taking money out. The key is getting regular financial reports from your partnership so you can estimate current year income/losses. Most real estate partnerships should be providing at least quarterly updates on property performance, which you can use to estimate your share of partnership income for basis calculations. It's definitely not perfect, but it beats the surprise of finding out in March that your December distribution created taxable income!

just make sure u keep checking ur mail. i verified my identity online in May and thought i was good to go, but then they mailed me ANOTHER form to fill out two weeks later. the IRS is notorious for not communicating between departments.

I went through identity verification last month and it took exactly 6 weeks to get my refund, so definitely faster than the 9 weeks they quoted. The Where's My Refund tool updated after about 3 weeks showing "still processing" and then suddenly switched to "refund approved" one day. Definitely get that IP PIN - it's super easy to set up and gives you peace of mind. I wish I had done it years ago. The whole verification process is stressful enough without worrying about someone else filing under your SSN. One thing I learned is that the 9 weeks is their worst-case scenario timeframe. Most people seem to get their refunds within 4-6 weeks if there are no other issues with their return. Just be patient and don't stress too much about calling - the confirmation screen you got means everything went through properly.

As someone who's dealt with similar Schedule C loss concerns, I want to emphasize that the IRS hobby loss rule is really about demonstrating genuine business intent rather than just hitting specific profit targets. The fact that you paused operations in 2023 due to your partner's illness actually works in your favor - it shows you made rational business decisions rather than blindly continuing to generate losses. A few key points for your Colorado restart: 1. **Documentation is everything** - Keep detailed records of your business activities, not just expenses. Time logs, client communications, market research, networking events all help prove business intent. 2. **The 5-year window is flexible** - Since you had legitimate business reasons for the pause, and you're essentially restarting with new equipment and location, you have a strong case that this demonstrates serious business commitment. 3. **Depreciation strategy matters** - While depreciation does count toward your loss calculation, bonus depreciation on legitimate business equipment actually supports your case for having a real business with substantial investment. 4. **Consider professional consultation** - Given that you're in year 3 with a restart, it might be worth having a tax professional review your specific situation to ensure you're positioning everything correctly for IRS scrutiny. The key is showing this is a legitimate business venture, not a tax-loss hobby. Your equipment investment and strategic restart suggest you're on the right track!

Clay, I've been following this thread and wanted to add some practical perspective from someone who went through an IRS audit specifically related to Schedule C losses and the hobby rule. First, yes - depreciation absolutely counts when determining profit/loss for the 2-of-5 year rule. However, the IRS isn't just mechanically applying this test. They're looking at the totality of circumstances to determine if you have a genuine profit motive. Your situation actually has several positive factors: 1) You made a rational business decision to pause operations in 2023 due to your partner's illness (this shows business judgment, not hobby behavior), 2) You're making a substantial equipment investment ($14k shows serious commitment), and 3) You're strategically relocating and restarting (again, shows business planning). Here's what I learned from my audit experience: Keep contemporaneous records of everything business-related. Don't just track expenses - document your business activities, decision-making process, market research, and efforts to improve profitability. The IRS agent specifically asked about my business plan and whether I had adjusted my approach based on prior losses. For your equipment depreciation, taking bonus depreciation can actually strengthen your case because it demonstrates significant business investment. Just make sure you can justify the business necessity of the equipment. Since you're essentially restarting in Colorado, this could be a good time to formalize your business structure (LLC, etc.) and create a detailed business plan showing how you'll achieve profitability within 2-3 years. The IRS gives more credibility to businesses that show they've learned from past losses and adjusted their approach accordingly. Bottom line: Document your business intent thoroughly, and you should be fine even with continued losses in the short term.