23 Has anyone dealt with the reporting side of this? When my aunt gifted me some Apple shares, my brokerage statement showed the transfer but didn't include any cost basis info. How are you actually supposed to document this for the IRS?

15 Just went through this exact situation when I received gifted shares from my parents last year. The dual basis rule is definitely confusing at first, but here's what I learned: The key is understanding that the IRS prevents you from "shifting" losses between family members while still allowing gains to transfer with the original basis. So when the fair market value at gift time is lower than the donor's original basis, you end up with two different basis amounts depending on whether you sell at a gain or loss. For your daughter's situation: - First stock: Loss of $1.50 per share ($24 FMV basis minus $22.50 sale price) - Second stock: Gain of $1.75 per share ($16.75 sale price minus $15 original basis) Make sure she keeps good records of both the original purchase info from you AND the fair market value on the transfer date. She'll likely need to file Form 8949 to explain the basis adjustments since her 1099-B probably won't show the correct basis amounts. The "lost" $2 per share from the first stock ($26 original basis to $24 FMV at gift) can't be claimed by anyone - that's intentional tax policy to prevent loss manipulation between related parties.

One thing nobody's mentioned - watch out for when you sell the house! If you've been claiming depreciation on the business portion of your home (which you should with the regular method), you'll have to recapture that depreciation when you sell. Also, the business portion won't be eligible for the capital gains exclusion ($500k for married filing jointly). That's something to consider when deciding between the regular and simplified methods. The simplified method doesn't claim depreciation, so you avoid these complications when selling.

Great question! I actually went through this exact scenario when I bought my home in 2023. Your understanding is correct - you'll split the mortgage interest proportionally between business and personal use. Since your spouse will use 15% of the home exclusively for business, that 15% of the mortgage interest becomes a business deduction on Schedule C. The remaining 85% can potentially be claimed as an itemized deduction on Schedule A, but remember it's subject to the $750k mortgage debt limit. One important consideration for California: our high property values mean you might hit that $750k cap quickly. With a $1.2M mortgage, only the interest on the first $750k of debt qualifies for the personal mortgage interest deduction. So you'd calculate 15% of total mortgage interest for the business deduction, then take 85% of the interest on just the first $750k for Schedule A (assuming you itemize). Also, don't forget about California's more restrictive mortgage interest deduction limits for state taxes - we cap it at interest on $1M of acquisition debt for state purposes, which is different from the federal $750k limit. Make sure you have solid documentation showing the exclusive business use of that 15% of your home. The IRS scrutinizes home office deductions closely, especially on higher-value properties.

Has anyone here used TaxAct for partnership returns? Their software is cheaper than the bigger names but I'm not sure if it handles all the schedules properly.

Just wanted to share my experience since I was in a similar situation last year with a small LLC partnership. You're absolutely right that the IRS website can be confusing! The key thing that helped me was realizing that Form 1065 is basically a "package deal" - all those schedules (B-1, B-2, and the K-1s) are considered part of the main return and go to the same address. Think of it like sending a book with multiple chapters rather than separate documents. One tip that saved me stress: if you're getting close to the deadline, definitely consider e-filing instead of mailing. The confirmation is instant, and you don't have to worry about postal delays or whether the IRS actually received your package. Most basic tax software can handle a simple 50/50 partnership return like yours. Also, make sure you keep copies of everything for your records, especially those K-1s since you'll both need them for your personal tax returns. Good luck with the filing!

Dont forget that u still have to pay regular income tax on any IRA withdrawl even if u avoid the 10% penaltly! this hit me hard last yr when i did this for my kids college. my tax bill was WAY bigger than i expected!!

Great advice from everyone here! Just want to emphasize one more important point - make sure you understand the timing requirements. The IRA withdrawal needs to be made in the same tax year that you pay the qualified education expenses, OR in the year immediately before or after. So if you're paying tuition for the spring 2025 semester, you could make the withdrawal in 2024, 2025, or 2026. This timing flexibility can be really helpful for tax planning, especially if you want to spread the income tax impact across multiple years like Fatima mentioned. Also keep detailed records of all qualified expenses and your withdrawal - the IRS may ask for documentation if they review your return.

Somewhat related question - I have a property that I've been trying to rent out, but haven't found tenants yet. It's been vacant all year while listed for rent. Should I still be filling out Schedule E for this year even though I've had zero rental days and zero income?

Your CPA is absolutely correct to include Schedule E even with zero rental days! This is actually a common misconception that trips up many rental property owners. The key point is that Schedule E is required when you hold a property for rental purposes, not just when you have actual rental income. Since your property was previously a rental and you owned it during part of 2024 (even though it was vacant and under contract), it maintained its rental property status for tax purposes. Here's what you can still report on Schedule E even with $0 rental income: - Property taxes paid during the ownership period - Mortgage interest (if any) - Insurance premiums - Maintenance and repairs - Property management fees - Depreciation for the months you owned it - Other ordinary and necessary expenses related to holding the property This creates a proper paper trail showing the property's transition from rental to sold status, and ensures you're capturing all legitimate deductions during your ownership period. It also sets up the proper classification for when the sale gets reported (likely on Form 4797 as business property rather than Schedule D as personal property). Don't ask your CPA to remove it - she's following the correct tax treatment for your situation!