This thread has been incredibly educational - I had no idea that preferred MLP units carried the same UBTI risks as common units when held in retirement accounts. I'm in a similar boat with some Kinder Morgan preferred shares in my Roth IRA that I bought purely for the steady income stream. Reading through everyone's experiences, it sounds like the key is getting the actual K-1 data rather than panicking about theoretical problems. Diego's point about the 40-45% UBTI classification for Energy Transfer is particularly useful - if that's typical across MLPs, then smaller positions might stay under the $1,000 threshold. I'm curious though - has anyone dealt with this in a Roth IRA specifically? I assume the UBTI rules apply the same way, but I'm wondering if there are any differences in how the Form 990-T filing or potential taxes are handled when it's a Roth versus traditional IRA. The tax-free growth benefit of the Roth might still make it worthwhile to keep the MLP position there even with occasional UBTI filings, assuming the distributions aren't massive. Going to follow Maria's advice and call Kinder Morgan's investor relations next week to get their historical UBTI breakdowns. Thanks everyone for sharing your real-world experiences rather than just theory!

I've been researching this exact issue after making a similar mistake with Enterprise Products Partners preferred units in my IRA. What I discovered through painful experience is that the "preferred" designation is really just about payment priority and stability - it doesn't change the fundamental partnership tax treatment. Here's what caught me off guard: even though preferred MLP units often have more bond-like characteristics (fixed distributions, less volatility), they're still partnership interests that pass through their proportionate share of the MLP's business income. The IRS doesn't distinguish between common and preferred units when it comes to UBTI - they both represent ownership in the same underlying partnership entity. I ended up calling my tax advisor after getting my K-1, and he explained that the UBTI issue stems from the fact that MLPs typically engage in active business operations (pipeline operations, energy production, etc.) rather than passive investment activities. This active business income becomes "unrelated" to the tax-exempt purpose of your IRA, hence UBTI. The silver lining is that not every dollar of your MLP distributions will be UBTI - some portion might be return of capital or passive income that doesn't trigger the filing requirement. But you won't know the exact breakdown until you receive your K-1 next year. My advice would be to contact Energy Transfer's investor relations for historical data and prepare for the possibility of Form 990-T filing, but don't panic until you see the actual numbers.

I just wanted to jump in as someone who had this exact same experience a few months ago! I received a "TCS TREAS 449" deposit for $634 completely out of nowhere and was convinced it had to be some kind of error. After reading through all these responses, I'm really impressed by how helpful this community is. Everyone's explanations about the Treasury codes and automatic IRS adjustments are spot-on. In my case, it turned out to be for a Saver's Credit that I had qualified for but completely missed when filing my return. What really struck me from reading this thread is how much the IRS systems have improved at catching beneficial errors. I had no idea they were automatically reviewing returns to find money we're owed! It makes these mystery deposits seem a lot less mysterious and a lot more like the system actually working as it should. Oliver, given everything you've shared about getting married in 2023 and having withholding complications, this really sounds like a legitimate adjustment. The filing status change alone could have triggered several different credit calculations that worked in your favor. I'd echo what others have said about trying to check your transcript online, but don't lose sleep over it - this is most likely good news, not something to worry about!

I've been reading through all these helpful responses and wanted to add my own experience! I received a similar "TCS TREAS 449" deposit last year for $1,134 that completely caught me off guard. Like you, I had already received my regular refund months earlier and couldn't figure out where this money came from. It turned out to be a combination of the Child Tax Credit (I had a baby in 2022 but filed before receiving all the proper documentation) and some interest on delayed processing. The IRS automatically calculated what I was owed and sent it without any advance notice. What really helped me was calling their automated transcript line at 1-800-908-9946. You don't have to deal with wait times for a human agent - it's just an automated system that can read your account transcript over the phone after you verify your identity. It gave me the breakdown of the adjustment immediately rather than waiting weeks for the letter. Given that you got married in 2023 and had withholding issues, this is almost certainly a legitimate adjustment. Marriage changes so many tax calculations - standard deductions, tax brackets, credit eligibility - that the IRS automated systems probably caught something beneficial that you missed. Don't stress about it being an error you'll have to repay. These systems are actually pretty good at not sending money unless you're truly entitled to it!

Has anyone actually calculated whether claiming sales tax is even worth it anymore? Since the standard deduction went up so much in recent years, I feel like you need a TON of itemized deductions to make it worthwhile.

This is exactly why I switched to tracking actual receipts a few years ago! The IRS calculator assumes spending patterns that just don't match reality for a lot of people. I'm in tech and got several big raises, but I actually spend MORE on taxable stuff now - better car, home improvements, gadgets, etc. What really helped me was setting up a simple system: I just take photos of receipts with my phone and sort them into a folder at the end of each month. Takes maybe 30 minutes monthly but saved me over $2,000 in additional deductions last year compared to the IRS estimate. The key is being consistent about it from January 1st - don't try to reconstruct a whole year of spending in March when you're doing taxes. Also remember that big purchases like cars, appliances, and home improvement materials can really add up in sales tax, especially if you live in a high sales tax state.

Something else to consider - if you're coming from a zero-tax country, you might also need to look into whether your home country has any tax obligations for residents abroad. Some countries tax worldwide income regardless of where you live, which could complicate things. Also, at your income level ($525k), you'll definitely want to work with a tax professional who understands international relocations. The interplay between federal/state taxes, potential foreign tax credits, and various deductions can get complex quickly. A good CPA who specializes in high-income earners and international moves will save you way more than their fees in optimized tax planning. One more tip - if you do choose a no-income-tax state like Florida or Texas, make sure you establish proper residency there (driver's license, voter registration, etc.) to avoid any questions from high-tax states about where you're actually domiciled for tax purposes.

Great question! As someone who went through a similar transition (though at a lower income level), here are some practical considerations beyond the tax rates: **Effective Tax Rate vs Marginal Rate**: Your effective federal tax rate won't be the full 37% - that's only on income above ~$578k. Your total federal effective rate will likely be around 32-33% on $525k. **State Comparison for Your Situation**: - **Florida/Texas**: ~32-33% total (federal only) - **New York**: ~42-43% total (federal + ~10% state + potential NYC tax) - **California**: ~45-46% total (federal + ~13% state at your income level) **Hidden Costs to Consider**: - States with no income tax often compensate with higher sales tax, property tax, or fees - Cost of living varies dramatically (housing costs in NYC vs Texas can offset tax savings) - Some states have better infrastructure, schools, healthcare systems **My Recommendation**: 1. Use a comprehensive tax calculator that accounts for all taxes (income, property, sales, etc.) 2. Factor in your lifestyle preferences - climate, culture, proximity to work/family 3. Consider hiring a tax professional familiar with international relocations before making your final decision The "best" choice depends on your total financial picture, not just income tax rates!

I'm dealing with a similar situation right now and wanted to share what my tax preparer told me. Since you haven't lived in the house for 5+ years, you won't qualify for the primary residence exclusion, but don't panic about the documentation issue. The IRS has specific guidelines for "adequate records" and they recognize that homeowners don't always keep perfect documentation. Here's what my CPA suggested as a systematic approach: **Start with what you definitely have:** - Any financing records (mortgages, home equity loans, credit lines used for improvements) - Photos with timestamps from your phone or social media - Any permits you can find through your city/county records **Then reconstruct methodically:** - Create a timeline of all improvements by year - Search all email accounts for contractor communications - Check bank/credit statements for large purchases at home improvement stores - Look for any insurance claims or policy updates related to the improvements **For valuation:** - Use cost estimation tools like RSMeans or local contractor websites to establish reasonable market rates for the work done in those specific years - Your sister might have better records since she stayed in the house - definitely coordinate with her The key is showing good faith effort to reconstruct accurate records. The IRS allows reasonable estimates when original documentation is lost, as long as you can support your numbers with some form of evidence. Don't let the fear of imperfect records stop you from claiming legitimate improvements that significantly increase your basis.

As someone who went through a similar situation with capital gains and missing receipts, I want to emphasize that you're not stuck with a massive tax bill! The key is being thorough and systematic in reconstructing your records. Here's my recommended action plan based on what worked for me: **Immediate steps:** - Contact your sister ASAP to coordinate - she may have kept records you forgot about since she handled the house after you moved - Pull all bank and credit card statements from 2013-2018 and highlight every home improvement expense - Search ALL your email accounts using keywords like "contractor," "renovation," "quote," "invoice," "Home Depot," etc. **Documentation goldmines people often overlook:** - Your county's permit database (usually searchable online by address) - Property tax assessment records showing value increases after improvements - Homeowner's insurance policy updates reflecting increased coverage - Social media posts with dated photos of renovation progress - Text message archives if you backed up your phone **For the major projects you mentioned:** - Kitchen renovation (2016): Check for any home improvement loans, appliance purchase records, or contractor communications - Roof replacement: This almost certainly required a permit - check county records - Windows: Energy efficiency rebates from utility companies sometimes have records - Bathroom renovations: Plumbing permits are common for full bathroom remodels The IRS accepts "reasonable reconstruction" when original records are unavailable. Create a detailed spreadsheet with your best estimates supported by whatever evidence you can gather. Even if you can only document 70-80% of your actual improvements, that could still save you thousands in capital gains taxes. Don't give up - you have more documentation than you think!