This is a great discussion with lots of solid advice! I'm dealing with a similar situation where my property has appreciated significantly since purchase. One thing I'd add is to consider the timing of any changes. If you're relatively young and healthy, keeping the current will structure might make sense to preserve that full step-up in basis benefit. But if there are health concerns or you want to simplify things for your wife, adding her to the deed now might be worth the partial loss of step-up basis for the peace of mind. Also, don't overlook the emotional aspect - some spouses feel more secure being on the deed even if it's not the most tax-optimal choice. Sometimes the psychological benefit outweighs the tax savings, especially if we're not talking about huge amounts. The Transfer on Death deed option mentioned by Hattie sounds really appealing if your state allows it - seems like it gives you the best of both worlds. Definitely worth checking if that's available where you live.

Great thread with lots of helpful perspectives! As someone who went through this exact decision recently, I wanted to share what worked for us. We were in a very similar situation - house only in my name, significant appreciation ($280k over 6 years), and trying to figure out the best approach for my spouse. After consulting with both a tax advisor and estate attorney, we ended up keeping the current structure (house in my name, will leaving everything to spouse) for the tax benefits everyone mentioned. However, we made one key addition that gave us both peace of mind: we set up a revocable living trust and transferred the house into it. This way we get the full step-up in basis benefit when I pass away, avoid probate entirely, and my spouse has immediate access without waiting for court proceedings. The trust cost about $1,500 to set up but will likely save us tens of thousands in taxes and probate costs. Plus my spouse feels much more secure knowing she won't have to deal with legal complications during an already difficult time. One thing to definitely verify - make sure your current will is properly executed according to your state's requirements. We discovered ours had a witnessing issue that could have caused problems down the road.

Great thread everyone! I just wanted to add a few practical tips for anyone working through Form 4952: 1. Keep detailed records of what constitutes your investment income vs. other types of income throughout the year. It makes tax time much easier. 2. If you're unsure about whether to make the election for qualified dividends or capital gains, calculate both scenarios before deciding. Sometimes the math doesn't work out in your favor even when you have excess investment interest expenses. 3. Don't forget that any investment interest expense you can't deduct this year carries forward to future years, so it's not completely lost if you don't have enough investment income this year. The distinction between investment income and business income (like rental properties) can be tricky, but it's crucial for getting Form 4952 right. When in doubt, consult the instructions or speak with a tax professional - the rules can be quite nuanced depending on your specific situation.

I've been dealing with Form 4952 for several years now and wanted to share some additional insights that might help others in similar situations. One thing that often trips people up is the timing of when investment interest expenses are deductible. The investment interest expense deduction is limited to your net investment income for the current year - you can't "pre-deduct" against expected future investment income. However, as others mentioned, any excess does carry forward indefinitely. Also, if you have investment expenses other than interest (like investment advisory fees), those are treated differently post-2017 tax reform. Investment advisory fees are no longer deductible as miscellaneous itemized deductions, but investment interest expenses still are deductible (subject to the investment income limitation). For those with complex investment structures involving multiple partnerships or investment entities, I'd strongly recommend working with a tax professional who specializes in investment taxation. The interaction between passive activity rules and investment interest limitations can get quite complex, especially when you have multiple K-1s with different types of income and expenses. The key is making sure you're properly characterizing all your income and expenses before completing Form 4952. Getting that foundation right makes the rest of the form much more straightforward.

Anyone else find it ridiculous that tax software makes these basic things so complicated? My dad used to do his taxes with pencil and paper in like an hour. Now we need AI tools and special phone services just to figure out why TurboTax is demanding forms we don't have!

I had this exact same problem last year! The key thing to understand is that TurboTax sometimes gets "stuck" on requiring a 1095-A if there's any indication earlier in your return that you might have had marketplace coverage. Here's what worked for me: 1. Go back to the very beginning of the health insurance section (not just where you're stuck) 2. Look for the initial question about your insurance source - make sure it says "employer-provided" or "job-based coverage" 3. If you see any mention of "marketplace," "exchange," or "premium tax credits" selected, change those 4. There's also usually a question about whether you received advance premium tax credits - make sure that's marked "No" The 1095-B from your employer insurance is basically just for your records - you typically don't need to enter any information from it into your tax return. Once you fix those initial selections, TurboTax should stop asking for the 1095-A entirely. If you're still stuck, try using the "start over" option just for the health insurance section rather than your whole return. Good luck!

One thing nobody's mentioned: check with a CPA who specializes in audit representation. I did this as a last resort and found out that professional tax preparers often have access to a dedicated IRS practitioner hotline that's WAY less busy than the public numbers. I paid my CPA for 2 hours of time ($350) to handle my audit communication, and she was able to reach my auditor on her first try through the practitioner line. Worth every penny for the stress reduction alone!

I'm dealing with a similar situation with my 2019 audit that's been dragging on for over a year. The phone disconnections are absolutely maddening - I've had it happen 6 times now after waiting 45+ minutes each time. One thing that helped me was finding the "Collections" number (800-829-7650) which sometimes has shorter wait times, and they can often see your audit status even if they can't resolve it directly. When I explained my situation, they were able to confirm that my case was indeed assigned to a specific auditor and gave me some internal reference numbers to use when calling back. Also, I discovered that calling first thing Monday morning (like 7 AM) seems to have better success rates - I think fewer people are calling then. Still took 25 minutes on hold, but at least I didn't get disconnected. Has anyone had success with the "Where's My Amended Return" tool online? I'm wondering if audit status shows up there too, or if it's completely separate from regular return processing. The whole system is so broken - we shouldn't have to use third-party services or wait literal hours just to talk to someone about our own tax situation!

Has anyone had success calling TD Ameritrade directly about this issue? I wonder if they might have a technical solution or workaround specific to TurboTax desktop software.

I've been dealing with this exact same Section 1256 import issue for the past two years with TurboTax desktop and TD Ameritrade. What finally solved it for me was a combination of approaches mentioned here. First, I tried the TXF file download that Dyllan mentioned - you can find it in TD Ameritrade's Tax Center under "Tax Forms & Info" then "Download Tax Data." This worked better than the PDF import but still missed some Section 1256 details. What really made the difference was manually entering the Section 1256 summary data (as Fiona suggested) but using the taxr.ai tool to double-check my numbers. The tool helped me catch a calculation error I had made when transcribing the 60/40 split amounts. One tip: when manually entering in TurboTax desktop, make sure you're in the "Investment Income" section and specifically look for "Section 1256 Contracts and Straddles" - it's buried pretty deep in the menus. The software will automatically calculate the 60% long-term / 40% short-term treatment once you enter your net gain/loss amount. The whole process is definitely more cumbersome than the online version, but at least it's doable once you know the workarounds.