Just be careful with using assessed values! I'm in California and our assessed values are based on Prop 13 which limits increases to 2% per year regardless of actual market appreciation. My client tried using the assessed value for inherited property and it was WAY below market value at the time of death. Would have resulted in a huge overtaxation when they sold!

Great question! I've dealt with this exact scenario multiple times. The key is establishing a "reasonable" basis using whatever documentation you can gather. Here are the methods I've successfully used: 1. **County assessment records** - While not perfect, they're acceptable when properly adjusted. Look at the assessment-to-sale price ratios in that area during the inheritance year. 2. **Zillow/online estimates** - Print out historical estimates from the inheritance date. While not ideal, I've seen these accepted when combined with other evidence. 3. **Real estate agent CMAs** - Many agents can pull historical comparable sales data going back 10+ years. This creates a solid foundation for your basis calculation. 4. **Estate tax returns** - Check if the estate filed Form 706. Even if not required, sometimes executors file anyway and include property valuations. The IRS understands that perfect documentation isn't always available for inherited property. Document your methodology clearly, show good faith effort to determine fair market value, and keep detailed records of your approach. I've never had an issue when the method was reasonable and well-documented. Time-wise, you might consider filing an extension if you need more time to gather supporting documentation properly.

Slightly different situation - I inherited my mom's house that had a $450k mortgage but was only worth $420k at death (underwater). I sold it for $435k but after paying off the mortgage had negative proceeds. Any tax implications I should be aware of?

I went through a very similar situation with my father's house last year. The key thing to understand is that even though you can't deduct the loss directly, you can still maximize your tax position by properly documenting all allowable selling expenses. Make sure you're including everything in your basis calculation: realtor commissions, title insurance, transfer taxes, attorney fees, inspection costs, and any repairs that were necessary to make the property marketable. These all reduce your "gain" (or in your case, increase your "loss" even though you can't claim it). Also, if you paid any property taxes, insurance, or utilities during the 8 months you held it, those might be deductible as rental expenses if you can show you were actively marketing it for sale during that time - though this is a gray area you'd want to verify with a tax professional. The stepped-up basis rule is designed to help heirs, but unfortunately the personal residence loss limitation works against you in situations like this. It's one of those frustrating tax code inconsistencies that doesn't always make practical sense.

its def a browser issue. Firefox worked for me after chrome kept failing

Had the exact same problem last week! Turns out my issue was with the ID.me verification - even though I thought I was fully verified, there was an additional step I missed. Try going to ID.me directly and making sure your identity verification is 100% complete. Also, disable any ad blockers or browser extensions that might interfere with the IRS site. The transcript system is super finicky about that stuff.

I'm confused about one thing... when calculating the employer portion for a sole proprietor (Schedule C), is it actually 20% of net profit or is it 25% of (net profit - half SE tax)? I've seen both formulas used in different places and now I don't know which is correct.

This is such a helpful thread! I'm in a similar situation as a freelance writer making around $55k. One thing I learned the hard way is to also consider the timing of your contributions throughout the year. Since we don't have regular paychecks like W-2 employees, it's easy to wait until the end of the year to make a big lump sum contribution. But I found it's actually better to make quarterly estimated contributions to my solo 401(k) to smooth out cash flow and take advantage of dollar-cost averaging. Also, don't forget that you can make contributions up until the tax filing deadline (plus extensions) for the previous year. So you have until April 15th, 2025 to make 2024 contributions, which gives you some flexibility if you're still figuring out your exact numbers. One more tip - keep detailed records of all your contributions and the calculations you used. The IRS can ask for documentation years later, and having everything organized from the start will save you major headaches down the road.

This is why our tax code is so messed up. An EV battery providing power to a house is functionally identical to a Powerwall doing the same thing. But one gets a tax credit and one doesn't because of some arbitrary distinction about "primary purpose." Meanwhile the electrical grid gets the same benefit either way! Politicians talk about wanting to encourage clean energy adoption but then create these convoluted rules that just confuse everyone. Ugh.

Based on what I've seen from following similar cases, the IRS has been pretty consistent about denying these claims for EVs, even ones with impressive bi-directional capabilities. The "primary purpose" test isn't really about how you use it day-to-day, but about what the manufacturer designed and marketed it for. That said, I'd suggest documenting everything about your home integration setup - the equipment you purchased specifically for home connection, any monitoring systems showing energy flow patterns, utility company agreements if you're selling power back to the grid. Even if you can't claim the residential energy credit, this documentation might be useful for other incentives or if the rules change in the future. Also worth checking if your utility company offers any rebates or time-of-use rate programs for customers with bi-directional EV charging. Sometimes the utility incentives can be more valuable than the federal tax credits anyway, and they don't have the same "primary purpose" restrictions.