Careful with Mexican tax authorities! They've gotten much more strict in recent years. My friend is a permanent resident there and thought he only needed to report Mexican income, but got hit with a huge penalty for not declaring his US pension and rental properties. If your mom decides to use the "non-domiciled" approach mentioned above, make sure she has VERY clear documentation proving her stronger ties to the US. They look at factors like where family lives, where most valuable property is, main source of income, etc.

This is such a complex situation that affects so many Americans with ties to Mexico! I've been dealing with similar issues as a US citizen who recently got permanent residency in Mexico. One thing I learned the hard way is that timing matters a lot for when you become a Mexican tax resident. The rules changed in recent years - now if you have permanent residency status, you're generally considered a Mexican tax resident regardless of how many days you spend there, unlike the old 183-day rule. For your mom's situation, I'd strongly recommend getting clarity on her exact tax residency status in Mexico BEFORE she starts earning rental income there. It's much easier to plan the structure correctly from the beginning than to fix it later. Also, don't forget about FBAR reporting requirements in the US if she opens Mexican bank accounts for the rental property. Any foreign financial accounts over $10,000 need to be reported to FinCEN, and the penalties for missing this are severe. The Mexican tax system can be quite different from what we're used to in the US - things like how depreciation works, what expenses are deductible, and timing of when income is recognized. Having both a good Mexican accountant AND a US accountant who understands international issues is really worth the investment.

Has anyone dealt with rental income specifically across borders? I'm wondering about vacation rental platform payments (like Airbnb) - does it matter if the payments go to a US bank account vs Mexican account? Does that change where the income is considered sourced from?

This is such a helpful thread! I'm dealing with something similar for my sister who just got her Mexican permanent residency but still works remotely for a US company. One thing I learned from our tax attorney is that the timing of when your mom establishes her tax residency status in Mexico matters a lot. If she files the declaration for US primary tax residence early in the tax year, it can help avoid complications later. Also, since she's starting the vacation rental next year, now would be a perfect time to set up proper record-keeping systems for both countries. The Mexican tax authority is getting much more sophisticated about cross-referencing rental platform data (Airbnb, VRBO, etc.) with tax filings. Having clean books from day one will save headaches later. For the rental property specifically, make sure she understands the depreciation rules in both countries - they're calculated differently and this can affect her overall tax strategy significantly.

I'm confused about something - if we're paying our state taxes anyway, why does it matter whether we can deduct them or not? Like we still have to pay them either way right? Sorry if this is a dumb question, I'm new to this tax stuff.

This is such an important topic that doesn't get enough attention! I've been dealing with this exact situation in Massachusetts where our state income tax plus property taxes put us way over the $10k SALT cap. One thing I'd add to the discussion is that even if the SALT cap expires as scheduled, there's no guarantee it won't come back in some form. The revenue loss from unlimited SALT deductions is significant - around $80 billion annually according to some estimates. Given federal budget pressures, I wouldn't be surprised if we see some kind of compromise, maybe a higher cap like $25k instead of unlimited deductions. For planning purposes, I'm assuming the best case scenario (full expiration) but also preparing for the possibility that some limitation remains. It's worth running projections for both scenarios, especially if you're making decisions about major purchases or timing of deductible expenses.

Based on the details provided, I think the company may be confusing Rule 144 restrictions with vesting restrictions. These are two completely different things: 1. Rule 144 restrictions only limit when and how you can SELL the shares (mainly applies to company insiders and large shareholders) 2. Vesting restrictions determine when you actually OWN the shares for tax purposes If there are no vesting restrictions (sounds like there aren't), then your wife likely owns the shares outright from day one, and the Rule 144 restrictions only prevent immediate resale. In this case, the value of the shares would be taxable income when received. The $0.001 per share valuation seems suspiciously low. Is this a startup? Has there been a recent valuation? If the company has had outside investment or other share transactions at higher prices, the IRS could potentially challenge this valuation.

I'd strongly recommend getting everything documented in writing from the company before proceeding. As others have mentioned, the confusion between Rule 144 restrictions and actual vesting/forfeiture conditions is a red flag. Here's what I'd ask the company to provide in writing: 1. **Clear documentation** of whether there are ANY conditions under which your wife could lose the shares (substantial risk of forfeiture) 2. **Their methodology** for the $0.001 valuation 3. **Written confirmation** of their position on tax treatment and the legal basis for it 4. **Timeline** for when they'll issue tax forms (1099-NEC, etc.) If they can't provide clear answers, I'd seriously consider consulting with a tax professional who specializes in equity compensation before your filing deadline. The potential tax liability of ~$40K isn't huge, but getting it wrong could result in penalties and interest. Also keep in mind that even if no taxes are due now, you'll need to track the cost basis properly for when you eventually do sell the shares. The IRS will want to see documentation of the original value and any taxes paid at grant. The fact that this is a startup with minimal valuation actually works in your favor from a tax perspective, assuming the $0.001 valuation is legitimate and supportable.

Those codes are definitely nerve-wracking after such a long wait! The 971 means they're sending you a notice explaining what they reviewed, and the 570 is just a temporary hold while they sort things out. After 9 months of processing, you're likely in the final stages. Most people with this combo see the hold release within 1-2 weeks with an 846 code and deposit date. The most common causes are stimulus payment discrepancies or small errors they can fix automatically. Keep checking your transcript daily - once you see that 846 code pop up, you'll know your refund is on the way. Hang in there, you're so close!

Hey Allen! I totally feel your pain on this one - 9 months is such a long time to wait! Those codes can be really confusing, but from what I've seen in this community, the 971/570 combo usually means you're actually getting close to the finish line. The 971 is just letting you know they're sending you a letter explaining any changes, and the 570 is a temporary hold while they wrap up their review. Most people I've seen with these codes after long processing delays get their refund within 2-3 weeks once the codes appear. It's often something simple like a stimulus payment discrepancy that they can fix on their end. Keep checking your transcript for that 846 code - that's when you'll know your deposit date is coming! After waiting 9 months, you definitely deserve some good news soon 🤞