Has anyone used TurboTax for reporting seller financing? I'm wondering if it handles Form 6252 correctly or if I should just go to a CPA this year.

Great thread! I'm also going through seller financing for the first time. One thing I learned from my accountant that might help - make sure you're keeping detailed records of ALL the closing costs and expenses related to the sale, not just the payments you receive. Things like title insurance, attorney fees, recording fees, etc. can all be added to your basis, which reduces your taxable gain. Also, if you're paying any ongoing expenses like property management fees or collection costs, those might be deductible against the interest income you're reporting. Another heads up - if your buyer ever defaults and you have to foreclose, that creates a whole different set of tax implications. The IRS treats it as a separate sale transaction, so you'd need to report any additional gain or loss at that point. Hopefully it doesn't come to that, but it's worth understanding upfront. Has anyone dealt with state tax requirements for seller financing? I'm in California and trying to figure out if there are additional state forms beyond the federal ones.

Has anybody used H&R Block software for filing Form 709? Does it walk you through which schedules to fill out based on your situation? I'm trying to decide if I should use software or just fill out the paper form myself.

I went through this exact same confusion last year when I had to file Form 709 for the first time! The key thing to understand is that Schedule D is ONLY for Generation-Skipping Transfer (GST) tax, which applies when you're making gifts to people who are two or more generations below you. Since you're giving to your niece, she's considered one generation below you (not a "skip person"), so you can completely skip Schedule D. You'll only need to complete Schedule A to report the gift details and potentially Schedule C if you need to calculate any gift tax (though with the current lifetime exemption being over $13 million, you probably won't owe any actual tax). The IRS instructions can definitely be overwhelming, but for your straightforward gift to a niece, you're dealing with a much simpler situation than the forms make it seem. Focus on Schedule A and don't stress about Schedule D - it literally doesn't apply to your case!

Anyone know if there's a penalty for not reporting this in previous years? I've been working in Brazil for 5 years and never included my FGTS in my FBAR calculations... 😬

This is really helpful information! I'm in a similar situation as an expat in Germany with mandatory pension contributions. Based on what everyone's saying, it sounds like the key principle is that if you have a "financial interest" in an account outside the US, it counts toward FBAR reporting regardless of withdrawal restrictions. One thing I'd add for the original poster - make sure you're using the correct exchange rates when converting your Brazilian real amounts to USD for reporting. The IRS has specific guidance on which exchange rates to use (generally the Treasury's year-end rates for the maximum balance calculation). Also, keep good records of your monthly FGTS statements throughout the year so you can accurately determine the maximum balance. Since employers deposit 8% monthly, your balance is constantly growing, so the maximum will likely be at year-end unless there were any withdrawals. Good luck with your filing!

PRO TIP: Make copies of EVERYTHING before you send it in!!! I learned this the hard way when the IRS claimed they never received my 4506-T form, even though I had mailed it. Second time around, I made copies, sent it certified mail with return receipt, AND kept the tracking number. When they tried to tell me they didn't have it again, I had proof of delivery and was able to get it resolved. Also, double-check that you've signed the form. It sounds obvious, but that's the #1 reason these get rejected.

Just wanted to add some clarity since I work at a financial aid office and see this confusion all the time. Everyone here is absolutely correct - you MUST use Form 4506-T (the full version) for verification of non-filing, not the EZ version. The 4506T-EZ is literally designed only for people who filed returns and need transcripts of those returns. It has no mechanism to verify non-filing because that's not what it's for. Think of it this way: how can a form designed to get copies of filed returns prove you didn't file? It can't. For financial aid purposes specifically, make sure you're checking Box 7 on Form 4506-T and clearly indicate the tax year you need verified. Also, be aware that some schools require the verification of non-filing for EVERY year you're claiming you didn't file, not just the most recent one. One more tip: if you're rushing to meet a financial aid deadline, contact your school's financial aid office. Many will accept a completed Form 4506-T as temporary documentation while you wait for the IRS response, especially if you explain the processing delays.

Worth mentioning that the timing for recharacterization or removal is important. You have until your tax filing deadline INCLUDING EXTENSIONS to fix this - even if you don't actually file an extension. So for 2025 taxes (for the 2024 tax year), that gives you until October 15, 2025. But don't wait until the last minute because the financial institutions can take time to process these requests!

Just want to add one more consideration that hasn't been mentioned yet - if you're considering the recharacterization route, make sure to factor in your state tax situation too. Some states don't allow deductions for Traditional IRA contributions, so even though you'd get the federal deduction, you might still owe state taxes on the contribution. Also, regarding your concern about potentially overcontributing for 2024 - with a MAGI of $135,000, you would have been eligible for a reduced contribution of about $4,600 (not the full $6,500). So you'll likely need to address that excess too. The good news is you can handle both years' corrections at the same time with your broker. One tip from my experience: when you call Vanguard, ask specifically for their "retirement specialists" rather than general customer service. They're much more knowledgeable about these types of contribution corrections and can walk you through exactly what forms you'll need and how it will be reported on your 1099-R.