2 I work at a university financial aid office, and we see students with these corporate scholarships/contest winnings every year. Here's what typically happens on our end: When Dr. Pepper (or similar companies) send the funds directly to the school, we apply it to the student's account as an outside scholarship. We issue a 1098-T form that shows all qualified tuition and related expenses, as well as scholarships/grants received. The student can then use this documentation to determine what portion of their prize/scholarship money went toward qualified expenses. This is definitely a situation where timing and coordination matters. Students who work with both the contest organizers and their school's financial aid office proactively tend to have better outcomes tax-wise.

This is such a timely discussion! I'm actually a tax preparer and see these contest/scholarship situations come up more frequently now. One thing to add is that the IRS has been pretty consistent in recent years about how they view these corporate-sponsored education prizes. The key distinction isn't really who sponsors it, but whether the funds are used for "qualified education expenses" as defined in IRC 117(b)(2) - tuition, fees, books, supplies, and equipment required for enrollment. What makes the Dr. Pepper contest particularly interesting is that winners often get the funds mid-semester, which can create complications for proper reporting. If you win $125K but only have $50K in remaining qualified expenses for that tax year, only that $50K portion would potentially qualify for exclusion. I always tell clients in these situations to keep meticulous records of exactly how every dollar gets spent and to consider spreading the expenses across tax years if possible (like paying next year's tuition early). The burden of proof is definitely on the taxpayer to show the money went to qualified expenses.

Don't forget to check your state tax rules too! Some states have different rules for gambling deductions than federal. For example, here in NJ, we can deduct gambling losses up to the amount of winnings even if we take the standard deduction on our federal return. But across the river in NY, they follow the federal rules and require itemizing. It can make a HUGE difference depending on where you live!

Really appreciate all the detailed advice here! I'm dealing with a similar cross-year situation and the session tracking approach sounds like a game-changer. One thing I'm wondering about - for those casual poker nights with friends that Wesley mentioned, how do you handle documentation when there's no formal record? I play in a regular home game where we just settle up with cash at the end of the night. Should I be asking everyone to sign something or just keep my own detailed log of buy-ins and cash-outs? Also, does anyone know if the IRS has specific guidance on what constitutes "adequate records" for informal gambling? I want to make sure I'm covering myself properly since these home games make up a big chunk of my gambling activity.

This has been a really enlightening discussion! As someone new to rental property ownership, I'm glad I found this thread before making any costly mistakes on my taxes. Based on everything I've read here, it seems like the conservative approach is the safest - assume single rental properties don't qualify for QBI unless you can clearly demonstrate you meet either the "trade or business" standard or the safe harbor requirements. The 250+ hours documentation requirement alone sounds like it would be difficult for most casual landlords to meet. I'm curious though - for those who do qualify, what kind of records do you keep to document your rental activities? I want to make sure I'm tracking everything properly from the start, even if I don't qualify for QBI right now. Maybe if I expand my rental portfolio in the future, I'll want to have that documentation history. Also, has anyone here actually been through an audit related to QBI claims on rental income? Would be interesting to hear what that process was like and what documentation the IRS focused on.

This thread has been incredibly helpful! I'm a tax preparer and I see this confusion constantly during tax season. The key issue is that many people (including some CPAs) conflate "rental income" with "business income" when they're treated very differently under Section 199A. The most important thing to understand is that the QBI deduction was specifically designed to benefit active business owners, not passive investors. Congress didn't want rental property owners getting the same tax break as someone operating a manufacturing business or professional service. For anyone reading this who wants to be absolutely certain about their situation, I'd recommend looking at IRS Notice 2019-7 which provides the safe harbor rules. It's pretty clear that you need to maintain separate books and records, perform at least 250 hours of rental services annually, and keep contemporaneous time records. "Rental services" has a specific definition and doesn't include things like financial or investment management activities. If you can't meet the safe harbor, you'd need to prove your rental activity constitutes a trade or business under the much more subjective Sec. 162 standard, which is risky territory for most single-property owners. Bottom line: when in doubt, don't claim QBI on rental income unless you have rock-solid documentation. The potential penalties aren't worth the risk for most taxpayers.

I'm in a similar situation - filed my extension return via mail in early May and still waiting on my refund. Reading through these experiences is both reassuring and nerve-wracking! It sounds like 4-6 months is becoming the new normal for paper returns. Has anyone had success checking their transcript through the IRS online account to get more detailed status info? I'm wondering if that shows anything beyond what the Where's My Refund tool displays. Also curious if anyone knows whether the IRS sends any kind of acknowledgment that they've actually received your mailed return, or if you just have to wait and hope it didn't get lost in the mail. The waiting game is definitely stressful when you're counting on that money!

Yes, checking your transcript through your IRS online account can definitely provide more detailed information than the Where's My Refund tool! The transcript will show if your return has been received and is in the system, plus any processing codes that might indicate what stage it's at or if there are any issues. Unfortunately, the IRS doesn't send any acknowledgment for mailed returns - they only do that for certified mail. So you really are just waiting and hoping it didn't get lost, which I know is super stressful. The transcript is your best bet to confirm they actually have it. One thing that might give you some peace of mind: if your return was going to be lost in the mail, you'd typically know by now since most mail issues happen within the first few weeks. The fact that you're just waiting likely means it's sitting in their processing queue, which is unfortunately massive right now. Hang in there - the 4-6 month timeline others mentioned seems to be pretty accurate based on what I'm seeing in the community lately.

I went through this exact situation in 2023 with a state tax offset from an old business debt. The frustrating part is that the Treasury Offset Program operates like a one-way street - they can grab your refund instantly, but tracking where it goes requires playing detective across multiple systems. Here's what finally worked for me: Check your IRS account transcript online for Transaction Code 898 (that's your offset being processed) and note the cycle date. Then, create an account on your state's Department of Revenue website if you haven't already. The offset payment typically shows up in the state system 10-14 business days after the TC 898 date, usually labeled as "Federal Offset Payment Applied" or similar. The 1-800-304-3107 number is basically worthless for timing - I called it dozens of times and it just robotically repeats WHO is taking your money. What you really need is confirmation that your state has actually received and applied the payment, which only their system can tell you. In my case, once I saw the offset payment posted in my state account, my remaining federal refund (TC 846) was issued exactly 6 business days later. Total time from filing to getting the remainder was 4 weeks and 2 days. It's a painful wait, but the money does eventually show up. The key is being able to track it through both systems so you're not just staring at "processing" status indefinitely.

I'm going through this exact same nightmare right now! Filed on Feb 14th expecting my usual quick refund, then got hit with an offset for some old state taxes I completely forgot about from a side business that failed in 2020. It's been 3.5 weeks now and the uncertainty is killing me. Reading through all these responses has been incredibly helpful - I had no idea about the different IRS transcript codes or that I should be checking my state's online portal separately. I've been obsessively refreshing "Where's My Refund" like a crazy person, but it sounds like that's basically useless for offset situations. The most frustrating part is how the IRS can instantly grab your money but then you're left playing detective across multiple government agencies just to figure out if they've actually processed it. It's 2025 - how is there not a unified tracking system for this? Going to pull my account transcript today and look for that TC 898 code, then set up an account with my state's Department of Revenue. Based on everyone's experiences here, it sounds like I'm probably looking at another 1-2 weeks before I see any movement. The wait is brutal when you're expecting that refund to hit your account, but at least now I have a realistic timeline and actual steps to track progress instead of just sitting here wondering if my money disappeared into a black hole. Thanks everyone for sharing your experiences - this thread is way more helpful than any official government resource I've found!