Has anyone used TurboTax for farm stuff like this? Their self-employed version claims to handle Schedule F but I'm wondering if it's adequate for something specific like alpaca farming or if I should find an accountant who specializes in agriculture.

I've been raising alpacas for fiber and meat for about 4 years now, so I can share some real-world experience here. You're absolutely on the right track - alpacas for meat production definitely qualify for farm tax deductions just like any other livestock. A few practical tips from my experience: First, document EVERYTHING from day one. I keep detailed records of feed costs, vet bills, fence repairs, even my mileage to livestock auctions. The IRS loves paper trails. Second, get your business license and EIN right away - it shows you're serious about this being a business, not a hobby. One thing that's helped me is connecting with other alpaca farmers in my area. There's actually a growing network of meat producers (it's gaining popularity!). Having documentation of market research and connections to buyers really strengthens your case that this is a legitimate business venture. Also, consider starting with breeding stock rather than just meat animals. You can sell offspring for both breeding and meat, which diversifies your income streams and makes the profit motive more obvious to the IRS. Plus, breeding animals have different depreciation schedules that can be advantageous. The 5-acre property should be perfect for 3-4 alpacas. Just make sure you're using the land primarily for the farming operation to maximize your deductions.

This is a really tricky situation and I appreciate everyone sharing their experiences. I'm dealing with something similar but from a different angle - my self-directed IRA owns land that I was planning to develop, but after reading all these responses I'm wondering if I should pivot entirely. One thing I haven't seen mentioned is the timing aspect of UBIT. Does anyone know if the IRS has a specific threshold for what constitutes "development" versus "improvement"? For example, if I just put in utilities and a gravel pad for an RV rental instead of building a full structure, would that potentially avoid crossing into the development/active business territory? Also, @Gavin King, your point about running the numbers is spot on. I think a lot of people (myself included) get caught up in the tax-deferred growth benefits without actually calculating whether the UBIT complexity is worth it. Have you found any good resources or spreadsheets for modeling these scenarios? I'd love to run my own numbers before making any irreversible decisions.

I've been following this thread closely as someone who went through a similar decision process with my self-directed IRA real estate investment. One thing that really helped me was getting clear on the IRS's actual definition of what constitutes "development" versus passive real estate investment. From my research and consultation with a tax attorney who specializes in ERISA law, the key distinction isn't just about building something new - it's about the level of activity and business operations involved. Even buying an existing rental property can potentially trigger UBIT if you're actively managing it as a business (like doing significant renovations, marketing, tenant screening, etc.) rather than hiring a third-party management company. In your case, Joshua, since you're talking about building from scratch AND planning to manage it as an AirBNB, you're definitely in active business territory. The AirBNB aspect alone - with the frequent turnover, cleaning, guest communication, marketing - is exactly the kind of active management that triggers UBIT concerns. One alternative I haven't seen mentioned: Could you partner with a qualified third party (not a disqualified person under IRA rules) who would handle all the development and ongoing management? Your IRA could be a passive investor in their project rather than the active developer. This might help you achieve your real estate exposure while staying in the passive investment lane. The math really does matter here though. Sometimes the simplest solution is the best one, even if it means taking the distribution penalty.

Does anyone know if TurboTax handles this better than FreeTaxUSA? I'm in the same boat with about 50 transactions and a couple wash sales. Would switching tax software make this easier?

I've been dealing with this exact same issue! For what it's worth, I called my brokerage (Charles Schwab) directly and they were able to provide me with a supplemental report that breaks down exactly which transactions had wash sales applied. It turns out most brokerages can generate this detail if you ask - it's just not included in the standard 1099-B. Once I had that breakdown, I was able to use the summary method for about 80% of my transactions and only had to list the specific wash sale transactions individually with code W. Saved me hours of data entry and I felt confident I was reporting everything correctly according to IRS rules. If your brokerage can't provide this detail, you might want to consider keeping better records next year or using a portfolio tracker that identifies wash sales in real-time as you trade.

Double check that the TIN (taxpayer identification number) on your 1042-S matches exactly what's on your 1040NR. I had a case where my university had an old ITIN for me on the 1042-S but I had since gotten an SSN and used that on my tax return. The IRS couldn't match them up even though all the dollar amounts were correct.

I've been through this exact situation and it's absolutely maddening! The good news is that these 1042-S matching issues are usually resolvable, but they do require some patience. A few things to check immediately: 1) Make sure your SSN/ITIN on the 1042-S matches exactly what you used on your 1040NR. Even if you recently switched from ITIN to SSN, if your withholding agent still has your old number on file, that could be the culprit. 2) Since you mentioned getting a reissued 1042-S, there's a real possibility that your withholding agent accidentally submitted BOTH versions to the IRS - the original and the corrected one. This would show up as duplicate reporting and could trigger the discrepancy notice. 3) When you contact your withholding agent, ask them specifically to verify: a) What version they submitted to the IRS, b) The exact dollar amount in box 7, c) Your name spelling and TIN as it appears on their submission. The IRS notice should include a phone number for questions about the discrepancy. While their phone lines are notoriously difficult to reach, if you can get through, they can tell you exactly what 1042-S information they have on file for you. This eliminates the guesswork about what went wrong. Don't panic - I've seen these resolved in the taxpayer's favor more often than not, especially when the amounts actually do match correctly like in your case.

Let me take a wild guess... student loans? That's what happened to me too. If it's federal student loans, look into getting on an income-driven repayment plan. That might be better than just paying the offset amount, especially if you qualify for the new SAVE plan. Most people don't realize you have options beyond just paying what they demand.

This exact thing happened to my brother-in-law last year! The timing issue between IRS refund processing and the Treasury Offset Program is surprisingly common. What basically happened is your refund got processed and sent out before the offset could be applied - it's like two different computer systems that don't talk to each other very well. You're absolutely doing the right thing by being proactive and calling TOP to set up a payment plan. From what I've seen, they'll usually send you a formal notice within 30-60 days demanding payment for the amount that should have been offset. The key is to not ignore it when it comes. One thing to keep in mind - if this is federal student loan debt, you might want to look into getting back on a regular payment plan or income-driven repayment plan with your loan servicer rather than just paying the offset amount as a one-time thing. That way you're actually addressing the underlying debt and potentially avoiding future offsets. Keep all your documentation from the calls you make and any letters you receive. This kind of bureaucratic mix-up can sometimes lead to confusion down the road, so having good records will save you headaches later.