Just a quick tip from someone who's been in financial services for 20+ years - check if these accounts have automated dividend reinvestment plans (DRIPs). When dividends are automatically reinvested, the cost basis often equals proceeds because the purchase price equals the sale price at that exact moment. If the account is high value ($1M+) and has been running on autopilot with DRIP for years, you can absolutely get these massive matching numbers. The tiny fractional differences might not even show up due to rounding on the 1099-B.

This is a great discussion with lots of helpful insights! I'm seeing similar patterns with some of our clients and wanted to add one more scenario I've encountered recently. Sometimes matching proceeds and cost basis can result from mutual fund exchanges within the same fund family. When clients do tax-free exchanges between funds (like moving from a growth fund to a value fund within the same company), the basis often transfers directly, resulting in identical numbers on the 1099-B. Also, for anyone dealing with these complex situations regularly, I'd recommend keeping a detailed spreadsheet tracking which clients have these matching figures and the eventual explanations. It's helped me identify patterns - for instance, I noticed that three clients with matching basis/proceeds all had the same financial advisor who was implementing a specific tax-loss harvesting strategy. The key is definitely not to panic when you see these numbers. There are legitimate reasons, but it's always worth investigating to make sure you're handling the tax implications correctly for your clients.

One thing nobody has mentioned yet - make sure you've calculated your depreciation basis correctly! When converting from primary residence to rental, your basis for depreciation is the LOWER of: 1) Your adjusted cost basis (purchase price + improvements - land value) 2) The fair market value when you converted it to rental use I made the mistake of just using my purchase price when I should have used the FMV at conversion (which was lower in my case during the 2018 market dip). Had to redo everything! Also, are you planning to do the amendments yourself or using a tax professional? With rental property sales and depreciation recapture, it might be worth paying for professional help just for this year.

I went through this exact same situation last year - bought a home, lived in it, then converted to rental and completely missed the depreciation in my first year. The stress is real! Here's what I learned: You're absolutely right to want to avoid Form 3115 if possible. Since you only missed one year (2022) and you're still within the 3-year amendment window, filing a 1040-X is definitely your best bet. I did the same thing and it was much more straightforward than I expected. A few things to keep in mind: - Make sure you calculate your depreciable basis correctly (as Nia mentioned above - it's the lower of cost basis or FMV when converted) - You'll want to amend 2022 first, then 2024 if you've already filed the sale - Keep good records of everything for when you calculate the depreciation recapture The good news is that even though you didn't claim it, you would have owed recapture tax anyway since the IRS considers depreciation "allowed or allowable." At least by amending, you'll get the tax benefit you should have received in 2022. Don't let this drive you too crazy - it's a common mistake and totally fixable with amended returns!

Make sure you don't just throw these away! The IRS computers will think the estate still owes estimated payments and will start generating automated penalty notices if you ignore them. Happened to my neighbor and it took him almost a year to resolve the mess.

I went through this exact same situation with my mother's estate about two years ago. The IRS kept sending Form 1041-ES vouchers even though we had properly closed the estate in 2020. What worked for me was sending a certified letter to the IRS with copies of the final Form 1041 (clearly marked "Final Return"), the court order closing the estate, and a brief explanation that the estate had been fully distributed and closed. I included the estate's EIN and my contact information as executor. The key thing is to act quickly - don't let these sit around. The IRS automated system will start generating penalty notices if it thinks estimated payments are being missed. It took about 6-8 weeks after I sent the documentation, but I eventually received a letter confirming they had updated their records and would stop sending the vouchers. Keep copies of everything you send and use certified mail with return receipt so you have proof they received it. This is definitely fixable, just needs the right paperwork to get their system updated.

Don't forget to consider whether your cousin needs to file FinCEN Form 114 (FBAR) if she has non-US bank accounts with over $10,000 combined. This is separate from her tax return but required for many non-residents with foreign accounts.

Great question! I went through this exact situation last year as a Canadian working in Detroit. Schedule OI is definitely required with Form 1040NR - it's not optional regardless of whether you're claiming treaty benefits or exemptions. A few key tips for your cousin's situation: - On Part I, she'll need to list her Canadian passport info and any US visa details - For Part II (days in US), she should keep good records of her work days but doesn't need to document every single border crossing - Part III is where she'll indicate she's claiming Canadian tax residency under the treaty - Make sure her SSN is consistent across all forms One thing that caught me off guard was that even though I wasn't claiming income exemptions, I was still benefiting from the US-Canada tax treaty for residency determination purposes. This affects how you answer some questions on Schedule OI. I'd recommend she review IRS Publication 597 or consider getting professional help for her first filing to make sure everything is done correctly. Cross-border tax situations can get complex quickly!

Quick heads up - I just went through this process with my new law practice. If you're doing a mega backdoor Roth with an S Corp, be VERY careful about the timing of your salary payments. The employer contribution limits for solo 401(k)s are based on your W-2 wages from the S Corp. If you want to max out your contributions for 2025, you need to pay yourself enough salary THIS calendar year to support those contribution limits. I messed this up my first year - paid myself mostly in December and couldn't make the full employer contribution I wanted because my W-2 wages weren't high enough for most of the year.

This is such a timely question! I'm in a similar boat - launching my freelance design business next month as an S Corp and have been wrestling with the same retirement optimization challenges. One thing I've discovered that might help is looking into Charles Schwab's Individual 401(k). While their basic plan doesn't include after-tax contributions, they do offer what they call an "Enhanced Individual 401(k)" that can be customized with additional features including after-tax contributions and in-service distributions for the mega backdoor strategy. The setup fee is around $500 and there's a small annual maintenance fee, but it's significantly less expensive than some of the fully self-administered options while still giving you the flexibility you need. I spoke with one of their retirement specialists last week and they confirmed that SECURE 2.0 provisions are gradually being rolled out, but the core mega backdoor functionality has been available for a while. Also worth noting - make sure you're factoring in the administrative burden of managing all this yourself. Between tracking contribution limits, coordinating rollovers, and staying compliant with testing requirements, it can get complex quickly. Sometimes paying a bit more for a provider that handles the heavy lifting is worth it, especially in your first year when you're focused on building the business.