As someone who went through a similar situation with inheritance from overseas, I want to emphasize how important it is to get ahead of this before your mother passes. The emotional stress of dealing with complex tax requirements while grieving is something you want to avoid. A few additional points that might help: 1. Consider establishing a relationship with a tax professional who specializes in US expat taxes NOW, not after the inheritance occurs. They can help you plan for the most efficient way to handle the inheritance and ensure all reporting requirements are met. 2. If your mother's estate planning isn't finalized, it might be worth having her consult with someone familiar with cross-border inheritance issues. Sometimes small changes in how assets are structured can make reporting simpler. 3. Keep detailed records of everything - exchange rates on the date of inheritance, property valuations, legal documents, etc. The IRS may want documentation years later. 4. Don't underestimate the complexity of valuing foreign real estate for US tax purposes. You may need professional appraisals. The "what if I don't report it" question is understandable, but the risk/reward ratio is terrible. The penalties are severe, and with modern banking reporting requirements, large asset transfers are increasingly visible to tax authorities. Your OCI status actually makes you more visible to both Indian and US authorities, not less. Better to be compliant from the start than deal with penalties and back-filing requirements later.

I want to add something that might be relevant to your situation - the timing of when you receive the inheritance can significantly impact your reporting requirements. If your mother passes away in 2025 but the estate takes time to settle and you don't actually receive the assets until 2026, your reporting obligations would be based on when you actually receive the inheritance, not when she passes. This is important because it affects which tax year you need to file Form 3520 and when the FBAR requirements kick in for any inherited accounts. I've seen people get confused about this timing issue and file forms for the wrong tax year. Also, since you mentioned you might inherit around $1.45 million total in assets, you should be aware that this will likely trigger the Form 8938 (FATCA) reporting requirement in addition to FBAR if the assets remain in foreign accounts. The thresholds for Form 8938 are higher than FBAR ($200,000 for unmarried taxpayers living abroad), but with assets of that size, you'd likely exceed them. One more thing - make sure you understand the difference between "receiving" an inheritance and having legal title to it. Sometimes there can be delays in the actual transfer of assets even after you're legally entitled to them, and the IRS reporting is generally based on when you actually gain control of the assets, not just when you're named as a beneficiary.

I just went through this exact situation with a client. The most important technical detail: QBI loss carryovers are calculated and tracked at the TAXPAYER level, not the business level. Reg §1.199A-3(b)(1)(iv) states: "If the net QBI with respect to qualified trades or businesses of the taxpayer...is less than zero, the taxpayer has a negative amount of QBI with respect to those trades or businesses. If a taxpayer has a negative amount of QBI, that negative amount is treated as a loss from a qualified trade or business in the succeeding taxable year." Notice it says "of the taxpayer" - not "of the business." This language supports the interpretation that QBI carryovers remain available after disposing of the business that generated them.

This thread has been incredibly helpful! I'm dealing with a similar situation where I closed my consulting business last year but have substantial QBI loss carryovers. My tax preparer wasn't sure about the treatment either, but all the regulatory citations and real-world experiences shared here give me confidence that these carryovers survive business disposition. One thing I'm curious about - has anyone here actually filed returns using QBI carryovers from a disposed business and had them accepted without issue? I know the regulatory language supports it, but I'd love to hear from someone who's actually been through an audit or at least had their return processed normally with this situation. Also, for those mentioning the 2025 expiration of Section 199A, I'm wondering if it makes sense to consider converting my remaining business to a different structure to maximize QBI utilization before then. My current setup only generates modest QBI each year, so it would take forever to use up these carryovers at the current rate.

Has anyone here used the IRS free e-file for partnership returns? I know you can e-file Form 1065 but I'm not sure if there are any special requirements when it's a final return with that "final return" box checked. Our partnership was pretty simple with just the two of us and minimal transactions.

Just wanted to add something that might help with your timing concerns. Since you closed in March 2024, you're actually not as pressed for time as you might think. Your 2023 partnership return (covering August-December 2023) is due by March 15, 2024, but you can file an extension until September 15, 2024 using Form 7004. For your final return covering January-March 2024, that would be due by March 15, 2025 (since it's a 2024 tax year return), so you have plenty of time to get that one right. Given that your total revenue was only $8,400 with $7,200 in expenses, you're looking at a pretty straightforward situation. The net income of $1,200 split between two partners means each partner would report $600 on their personal returns. Since the amounts are relatively small, the IRS is less likely to scrutinize the return heavily, but definitely still follow the proper procedures for the final return filings. One tip: keep detailed records of exactly when you ceased operations and any final expenses related to closing the business. These closing costs can often be deducted on your final return.

Has anyone here used TurboTax Business for filing a final partnership return? Their website says the 2022 version isn't available yet, but I'm wondering if there's a workaround or if I should just bite the bullet and pay for a CPA.

Just went through this exact situation last year with my business partner! You're right that you can't file the actual 2022 return until January when the IRS systems open up, but there are definitely things you can do now to get ahead of the process. First, make sure you have all your documentation organized - final profit/loss statements, asset disposition records, and any dissolution paperwork from your state. Since you've already handled the state dissolution, you're ahead of the game there. One thing that really helped us was getting our books professionally closed before year-end. Even though we dissolved in September, having everything reconciled and ready meant we could file literally on the first day the IRS started accepting returns in January. Also, double-check if you need to make any estimated tax payments for the final quarter. We almost missed this and it would have triggered penalties. Your dissolved status doesn't exempt you from quarterly obligations through your dissolution date. The waiting is definitely frustrating when you just want to close this chapter, but use this time to make sure everything is perfect so there are no delays or amendments needed later!

Has anyone used the IRS Direct Pay system for making estimated payments? I'm trying to figure out if there's a way to see exactly when my payments were applied because I think some of mine might have been applied to the wrong quarters.

For your specific situation with the dramatic income jump from $14k to $88k, you're actually in a pretty favorable position regarding penalties. The "prior year safe harbor" rule means you only needed to pay $1,500 throughout the year (your prior year tax liability) in equal quarterly installments to completely avoid penalties. However, since you mentioned you "finally made all my quarterly estimated tax payments for the year," it sounds like you may have made late payments. If that's the case, you'll still benefit from the lower $1,500 threshold, but there will be some penalty for late payment. When filling out Form 2210, focus on Part II first to see if you qualify for any exceptions. If not, then Part III will calculate your penalty. For the annualized income method on Schedule AI, make sure you're entering your actual cumulative income through each quarter-end date, not dividing your annual income by 4. Given your uneven income pattern, this method will likely result in much lower required payments for Q1 and Q2. The $65 penalty you calculated using the annualized method sounds much more reasonable than the $720 penalty, especially if most of your income came in the latter half of the year.