Has anyone used the IRS's own QBI worksheet rather than online calculators? I found it in the Form 1040 instructions and it seems more detailed than most online tools. It definitely accounts for the thresholds and limitations we're discussing.

The IRS worksheet is definitely the most accurate approach, but you're right about it being complex. As a CPA who helps clients with QBI calculations regularly, I always recommend starting with the official worksheet to get the correct baseline calculation before using any online tools. One tip that helps avoid calculation errors: work through each section methodically and double-check that your "qualified business income" number excludes reasonable compensation from your S-corp. I see clients mess this up frequently - they include their W-2 wages in the QBI amount when it should only be the remaining business profits. For Dylan's original question about the $340K joint income with $250K from the S-corp - make sure you're clear on whether that $250K is before or after your reasonable compensation. If it's after, then you're on the right track. If it includes your salary, you'll need to subtract that first to get your actual QBI amount.

Something similar happened to my brother last year. What finally worked was having his accountant contact the IRS Practitioner Priority Service. This is a special hotline for tax professionals that often gets better results than the regular channels. Since your accountant made the error, they should be willing to help resolve this through their professional channels. My brother's accountant was able to get the IRS to issue a manual refund check after proving the original deposit was an error.

I went through this exact same situation two years ago and it was incredibly stressful. Here's what I learned that might help you: The key is understanding that once the IRS confirms the deposit went to the account number listed on your return, they consider their obligation fulfilled. At that point, it becomes a civil matter between you and whoever received your funds. You mentioned Chase hasn't returned the money - this is actually crucial. If the account exists and is active, the account holder legally has possession of funds that don't belong to them. You may need to take legal action against the account holder directly. I'd recommend: 1. Get written confirmation from the IRS that the refund was deposited to the wrong account due to an error on your return 2. Demand Chase provide you with information about the account holder (they may resist, but you have legal grounds since it involves your money) 3. Consider small claims court against the account holder if they won't return the funds voluntarily In my case, once I threatened legal action against the person whose account received my refund, they cooperated with the bank to return the money. The whole process took about 6 weeks, but I did get my full refund back. Don't give up - $5,400 is worth fighting for, and you do have legal recourse here.

One option nobody mentioned yet - you could use a Print-on-Demand platform that handles tax for you. I use Printful through their Etsy integration, and Etsy collects and remits all the sales tax automatically. I just deal with my income taxes in France, and it's much simpler. The downside is you'll make less profit per item since these platforms take a cut, but the time and stress saved on tax compliance might be worth it when you're starting out.

As someone who went through this exact process last year, I'd highly recommend starting with the basics first. Before diving into tools or services, make sure you understand the fundamental difference between income tax (federal) and sales tax (state-level). For income tax, you'll likely need an ITIN (Individual Taxpayer Identification Number) from the IRS since you're not a US citizen. This lets you file the proper forms like 1040-NR for nonresident aliens. The process takes a few months, so start early. For sales tax, track your sales by state from day one. Most states have economic nexus thresholds around $100K in sales OR 200+ transactions per year. Keep detailed records because once you hit these thresholds, you'll need to register for sales tax permits in those states. Also consider getting a US bank account through services like Wise or Mercury - it makes payments from US customers much smoother and can help with your business legitimacy when dealing with suppliers.

For those with PTPs, remember that these Schedule K-3 requirements are still relatively new and even many tax professionals are confused by them. My approach has been to look at the prior year K-3 (if available) to gauge whether there's likely to be any significant foreign information. If last year's K-3 had minimal or zero foreign information AND your current K-1 has an empty Box 21, that's usually a good indication you can proceed without waiting. Just set a reminder to review the K-3 when it eventually arrives to confirm your decision was correct.

This is a great discussion and really helpful for those of us dealing with PTP K-1/K-3 complications! I'm in a similar situation with two different partnerships - one clearly states no foreign assets like yours, but the other is less clear in their language. One thing I've learned from my CPA is to also check if your partnership issues a Form 8865 (for foreign partnerships) or has any mention of PFIC investments in their annual reports. If there's no mention of these and Box 21 is empty, it's another good indicator that waiting for the K-3 won't provide actionable information. I've decided to follow your approach this year - filing without waiting for the delayed K-3s from partnerships that clearly indicate no foreign tax activity. The stress of extensions just isn't worth it when all indicators point to the K-3 being irrelevant for our tax situations.

This is a fascinating thread with lots of great insights! As someone who's been following real estate tax strategies closely, I wanted to add a few thoughts that might help with your decision. One thing I haven't seen mentioned yet is the potential impact of state taxes on your strategy. Depending on what state you're in, the state capital gains tax rate could significantly affect your calculations. Some states have no capital gains tax, while others treat it as ordinary income. This could tip the scales toward or away from the 1031 exchange approach. Also, regarding your question about the $250k exclusion with multiple properties - there's actually a "once every two years" rule that applies to the Section 121 exclusion. If you sell your current primary residence using the exclusion, you won't be eligible to use it again for another 2 years. This could affect the timing of your overall strategy if you're planning to sell both properties within a short timeframe. The depreciation recapture issue that others mentioned is really significant here. With $125k already taken plus whatever additional depreciation you'd claim during the rental period, you're looking at a substantial 25% hit that can't be avoided with the primary residence exclusion. Given all the complexity and potential pitfalls, I'm leaning toward agreeing with the folks suggesting the multi-family conversion approach. It's cleaner, more straightforward, and gets you out of the landlord business faster while still providing meaningful tax benefits. Have you considered consulting with a tax professional who specializes in real estate to run the actual numbers on all these scenarios? The devil is really in the details with these strategies.

I've been following this discussion with great interest as I'm dealing with a similar situation. One aspect that hasn't been fully explored is the impact of the Tax Cuts and Jobs Act (TCJA) on these strategies, particularly the changes to like-kind exchange rules and the potential for future tax law changes. Under current law, 1031 exchanges are still available for real estate, but there's always political discussion about limiting or eliminating them. If you're planning a multi-year strategy, you're taking on legislative risk that the rules could change before you complete your plan. Also, I wanted to mention something about the qualified intermediary selection process. Not all QIs are created equal, and you want one with strong financials and proper segregation of client funds. There have been cases where QIs have gone bankrupt or misappropriated funds, leaving investors unable to complete their exchanges. Make sure any QI you choose is bonded and has a solid track record. For what it's worth, I recently decided against a similar 1031 strategy and instead took the tax hit upfront. The certainty of knowing my exact tax liability and being able to move on with my life was worth more to me than the potential savings from a complex multi-year plan with multiple moving parts. The multi-family conversion approach really does seem like your best option here. You get immediate relief from landlord duties, maintain some rental income, and achieve meaningful tax benefits without the complexity and risks of a 1031 exchange. Sometimes the best tax strategy is the one that lets you sleep well at night while still achieving your financial goals.