Having dealt with a similar situation between Texas and California, I can't stress enough how important it is to establish clear, unambiguous residency rather than cutting it close. The 10-day shortage you mentioned puts you in exactly the kind of gray area that can trigger additional scrutiny. One thing I learned during my residency determination process is that consistency across all your records matters enormously. Beyond just counting days, make sure your voter registration, driver's license, bank statements, insurance policies, and even subscription services all point to your owned home as your primary address. Any inconsistencies can raise red flags. For your vacation day question - the general rule is that vacation days count toward your established "home base" at the time of travel. So if your primary residence was the rental when you took the vacation, those days would typically count toward the rental location, not the owned home. Given the potential city tax savings you're looking at, the financial stakes are probably high enough to justify making those extra trips to clearly hit the day count. The cost and stress of an audit, even if you ultimately prevail, usually far exceeds the inconvenience of a few additional trips. Better to have an iron-clad case than one that requires explaining or defending.

I went through a very similar situation last year with properties in Nevada and California. The advice everyone's given here is spot-on - being 10 days short of the threshold is exactly the kind of situation that can invite scrutiny. One thing I'd add that hasn't been mentioned much is to pay attention to your utilities usage patterns at both locations. During my residency review, they looked at electricity and gas bills to see which property showed consistent daily usage versus sporadic usage. High utility bills at your owned home during winter months (heating) or summer months (AC) can be strong evidence that it's where you actually live day-to-day. Also, if you have any recurring services like lawn care, house cleaning, or regular maintenance at your owned home, keep those records too. These show ongoing commitment to maintaining the property as your primary residence rather than just a place you occasionally visit. The fact that you already have your driver's license and voter registration at the owned home is great - that shows intent to establish residency there. Combined with making those extra trips to hit the day count clearly, you should be in a much stronger position. The peace of mind is definitely worth the inconvenience of a few additional trips.

I've held TCEHY and other Chinese ADRs for years, and I've always had them treated as non-qualified dividends. From my research and conversations with my tax professional, there are actually a couple of other factors at play: 1. The China-US tax treaty has a "Limitation on Benefits" clause that many Chinese companies don't satisfy 2. For ADRs specifically, there's the question of whether the underlying shares are "readily tradable" on the Hong Kong exchange (which the IRS may not recognize as "established" for this purpose) 3. The entity actually paying you the dividend is often the US depositary bank, not the foreign corporation directly If you really want to fight this, you could potentially take a position on your tax return that they are qualified dividends and include a disclosure statement explaining your reasoning, but be prepared for potential pushback from the IRS.

The Hong Kong Stock Exchange situation is particularly frustrating because it highlights how narrow the IRS interpretation can be. While Hong Kong is indeed a major financial center, the IRS has historically been very strict about what constitutes an "established securities market" for qualified dividend purposes. The key issue is that for the "readily tradable" test, the IRS generally only recognizes major US exchanges (NYSE, NASDAQ) and a very limited list of foreign exchanges. Even though Hong Kong has sophisticated trading infrastructure and high liquidity, it doesn't automatically qualify under US tax law. This is why many investors end up switching to US-listed ETFs that hold these same foreign companies - you get similar exposure but with qualified dividend treatment. For example, instead of holding TCEHY directly, you might consider something like VWO or ASHR that include Tencent in their holdings but structure the dividends to qualify for the lower tax rate. It's one of those situations where the tax code hasn't kept up with modern global markets, leaving investors with perfectly legitimate foreign investments facing higher tax rates simply due to technicalities in how the securities are structured and traded.

This is really valuable information about the audit risk! I'm curious about the documentation requirements - when you say your parents couldn't prove some of the work, was it because they didn't have receipts, or were there other documentation issues? I'm trying to figure out the best way to organize everything from day one. Also, did they have any luck with getting credit for improvements where they had receipts but maybe not before/after photos? I'm wondering if contractor invoices alone are sufficient or if visual documentation is really necessary for every project.

As a new homeowner going through this process, I wanted to share what I've learned about documentation. My real estate attorney advised me to create a "home improvement file" right from closing day, and it's already proving valuable. Here's my system: I photograph everything before any work begins, save all contractor bids (even the ones I don't accept), keep receipts for both materials and labor, and take photos when work is completed. I also started a simple spreadsheet with columns for date, description, cost, and whether it's a repair vs. improvement. One thing that surprised me - my accountant said to keep records of even small improvements because they add up over time. Things like new light fixtures, upgraded outlet covers, or better cabinet hardware might seem minor but can total thousands over the years. The key insight from this thread is that good record-keeping from day one is much easier than trying to reconstruct everything years later during a sale or audit. Thanks everyone for the great advice about the roof situation - it really helps to understand how seller improvements work!

Has anyone tried TaxHawk? Just discovered it and wondering if it handles stock sales too without charging?

Just wanted to add another option that's been working great for me - TaxAct through the IRS Free File program. I have a similar situation with W-2 and stock sales, and it handled everything completely free (including Schedule D for capital gains). The key thing I learned is that you MUST go through irs.gov/freefile to access the truly free versions. If you go directly to TaxAct's website, they'll try to charge you for the same forms that are free through the IRS portal. One tip for stock sales - make sure you have your cost basis information ready from your brokerage. The software will walk you through entering each transaction, but having your 1099-B and records organized beforehand makes the process much smoother. I was able to complete my entire return in about an hour, and got my refund in less than 3 weeks!

This is a really important point about outside basis that often gets overlooked when dealing with Section 704(c) corrections. In your situation, Harper, you'll definitely want to have your tax firm run basis calculations for each affected partner before finalizing these allocations. What can happen is that partners who received improper loss deductions in 2015 may have reduced their outside basis at that time. Now, when they're allocated the corrective Net Unrecognized Section 704(c) gain, they'll have taxable income but their basis situation might be complicated by distributions they've taken over the intervening years. I'd recommend asking your new accounting firm to prepare a multi-year basis analysis for each partner showing: (1) their basis position in 2015 before the improper allocation, (2) how the incorrect loss allocation affected their basis, (3) what distributions and other allocations have occurred since then, and (4) what their basis will look like after the Section 704(c) correction. This analysis will help you explain to the partners not just why they're getting additional taxable income, but also how it relates to tax benefits they received improperly years ago. It makes the "recapture" nature of these allocations much clearer and can help reduce partner frustration about the adjustments.

As someone who works in partnership tax compliance, I wanted to add that documenting these Section 704(c) corrections properly is crucial for future audits. The IRS will want to see clear support for why these allocations were made, especially since they're happening years after the original error. Make sure your new accounting firm prepares a detailed memo explaining: (1) what the original allocation error was and how it was discovered, (2) which specific partners were affected and by how much, (3) why Section 704(c) remedial allocations are the appropriate correction method rather than amended returns, and (4) the specific calculation methodology used to determine each partner's share of the Net Unrecognized Section 704(c) gain. This documentation should be kept with your permanent partnership records. If the IRS ever questions these allocations during an audit, having this clear paper trail will demonstrate that the corrections were made in good faith following proper tax principles. It also protects both the partnership and the individual partners by showing the allocations weren't arbitrary but were based on fixing legitimate errors from prior years. I've seen partnerships get into trouble during audits when they couldn't adequately explain unusual allocations, even when the allocations were technically correct under Section 704(c).