Has anyone used an online service like Zillow or local property tax records to figure out the historical value? I inherited a house from my grandmother in 2012 and the lawyer handling the estate didn't get an appraisal at the time. Now I'm selling and have no idea how to document what it was worth back then.

One thing I haven't seen mentioned yet is that you might want to consider the timing of your sale carefully. If this puts you into a higher income bracket for the year, you could end up paying the 20% long-term capital gains rate instead of 15%. Also, since you mentioned this is for your kid's college, look into whether your state offers any tax advantages for education expenses that might offset some of the capital gains. Some states allow you to contribute to 529 plans and get state tax deductions, which could help reduce your overall tax burden. Make sure you keep detailed records of all the property taxes you've paid over the 20 years too - while these don't add to your basis, they can sometimes be deducted in the year of sale depending on how the closing is structured.

Has anyone else had issues with tax software correctly calculating Part III of Form 1116? I use TurboTax and it seems to be miscalculating my credit limitation.

I went through the exact same Form 1116 confusion when I moved to the UK! The instructions are absolutely terrible for newcomers to international tax filing. Just to reinforce what others have said - yes, both UK income tax AND National Insurance contributions qualify for the Foreign Tax Credit. This is explicitly stated in IRS Publication 514. Don't let anyone tell you otherwise. For Part II, think of it this way: Part I is about your income, Part II is about the taxes you paid on that income. So your UK salary goes in Part I, and the actual tax amounts withheld (both income tax and NI) go in Part II with the dates they were withheld. One thing I wish someone had told me earlier - keep really good records of your UK payslips and P60 because you'll need the exact amounts and dates for Form 1116. Also, the HMRC website has a great tool that shows you exactly how much income tax vs National Insurance you paid if you need to break it down. The exchange rate thing is annoying but manageable. I used the IRS annual average rates for simplicity since I had regular monthly withholding. If you had any lump sum payments or bonuses, you'd want to use the specific date rate for those. Hang in there - it gets easier once you understand the structure! Next year when you qualify for Form 2555, you'll have more options to optimize your tax situation.

When I was dealing with a similar issue, I discovered taxr.ai and it was a game-changer. Instead of staring at those cryptic transcript codes trying to make sense of them, the tool analyzed everything and gave me a clear explanation. Showed me I had a verification issue and gave step-by-step instructions on how to resolve it. Saved me hours of research and confusion. Highly recommend if you're stuck trying to decipher IRS language! https://taxr.ai

I feel your pain! Been in a similar situation before. Four months is definitely excessive, especially when you need the money for medical bills. A few things to check: 1. Look for any mail from the IRS - sometimes letters get delayed or lost 2. If you claimed EITC or other credits, they do extra review which adds months 3. Your transcript codes 570/971 that others mentioned usually mean they need to verify something The Taxpayer Advocate Service really can help when you've been waiting this long - they're separate from regular IRS customer service and actually have power to move things along. You can also try contacting your congressman's office like others suggested. Don't give up! Your refund is coming, the system is just painfully slow right now. Keep checking that transcript for any new codes or dates.

One warning about cost segregation - the IRS has been increasing scrutiny of these studies in recent years. Make sure whoever does yours is legit and has engineering credentials. I've seen people try to DIY this and get absolutely hammered in audits.

Great discussion here! As someone who's been through a similar conversion, I wanted to add a few practical points. First, don't forget about the "material participation" tests beyond just Real Estate Professional status - there are 7 different tests you can meet, and some are easier than others depending on your situation. For the Airbnb conversion specifically, document EVERYTHING. Keep logs of time spent on guest communication, cleaning coordination, maintenance, marketing, etc. The IRS loves detailed records, especially for short-term rental activities since they're often more hands-on than traditional rentals. One thing that caught me off guard: if you're doing cost segregation on a duplex where only one unit becomes an Airbnb, you'll need to track the depreciation schedules separately for each unit since they have different business purposes. It's not complicated, but it's something to plan for. Also consider the state tax implications - some states treat short-term rentals differently than long-term rentals for tax purposes, which could affect your overall strategy. Worth checking with a local CPA who understands your state's rules.

As someone who just joined this community and is navigating my first tax season as an independent filer, this post and all the responses have been incredibly educational! I literally had my transcript open in another tab with an 846 code showing a date next Friday, and I was about to ask the exact question you're talking about. Reading through everyone's explanations really drives home how clear the information actually is once you understand what you're looking at. I think the issue for newcomers like me is that we're so used to things being complicated with the IRS that we assume there must be some hidden complexity we're missing, even when the answer is right there. The banking processing time explanations are especially helpful - knowing that direct deposits might take 1-2 extra days after the 846 date gives me realistic expectations instead of refreshing my bank account obsessively on Friday. Thanks for the reality check, and thanks to everyone who took the time to break down how this all works!

I'm brand new to this whole tax thing and honestly, this entire thread has been like a masterclass in reading transcripts! I literally have my transcript pulled up right now showing an 846 code with a date for next Wednesday, and I was 100% about to make one of those posts asking "so when will I actually get my money?" It's embarrassing how obvious it seems now that everyone's explained it, but when you're staring at a government document full of random codes and numbers for the first time, it really does feel like there must be some hidden complexity you're missing. I kept thinking "surely it can't be THAT simple, right?" Thanks for the reality check (even with the eye-rolling 😅) and thanks to everyone who took the time to explain the banking processing times and everything else. This community seems awesome for helping newcomers figure out all this confusing tax stuff. Now I can stop obsessively checking my bank account and just wait for Wednesday... plus 1-2 days for my bank to process it!