Just to share my experience - I had a similar situation last year but my LLC had about $200 in expenses and no income. I called the IRS and after being on hold forever, they told me I definitely needed to file an amended return with Schedule C showing the loss. They said even though it wouldn't change my tax situation much, it was important for their records to show the business activity. The agent was actually pretty nice about it and said as long as I filed the amendment within a reasonable time, there wouldn't be penalties since I wasn't underpaying taxes.

I went through this exact same situation two years ago with my dormant LLC! The stress was real, but it turned out to be much less dramatic than I expected. Here's what I learned: Yes, you technically should file an amended return (Form 1040-X) with Schedule C showing the zero activity. Even though there's no tax impact, the IRS wants documentation that the LLC exists and had no activity rather than just ignoring it completely. The good news is there are no penalties when you're not underpaying taxes. I filed my amendment about 6 weeks after realizing my mistake, and it was processed without any issues or additional fees. Just make sure to clearly indicate on the Schedule C that this was a business with no activity during the tax year. One tip: keep good records going forward. Even if your LLC continues to have zero activity, you'll want to document that fact each year so you don't forget again. It's much easier to include a zero-activity Schedule C from the start than to amend later!

One mistake I made last year - I only reported my net winnings from betting (winnings minus losses) instead of reporting the full 1099 amount as income and then deducting losses separately. Got a letter from the IRS a few months later! The system flags discrepancies between reported 1099 income and what you put on your return. Make sure you report the FULL 1099 amount on Schedule 1 as income, then deduct eligible losses on Schedule A if itemizing.

This is exactly the situation I found myself in last year! Here's what I learned from my tax preparer: You absolutely must report the full 1099 amounts from PrizePicks and Underdog as income - there's no way around that. The IRS gets copies of those 1099s and will expect to see that income on your return. For your losses from other sportsbooks, you can deduct them on Schedule A, but only up to the amount of your gambling winnings. So if you had $5,000 in 1099 winnings but $8,000 in total losses, you can only deduct $5,000 of those losses. The key decision is whether itemizing (to claim those losses) gives you a bigger deduction than taking the standard deduction. For 2023, the standard deduction was $13,850 for single filers. So unless your gambling losses plus other itemizable deductions (like mortgage interest, state taxes, charitable donations) exceed that amount, you're better off taking the standard deduction and just paying tax on the full 1099 income. Keep every record you can - screenshots, bank statements, anything that shows your betting activity. Even if you don't itemize this year, you might need those records later.

The IRS is so backed up rn its not even funny. My friend works there and says they're still processing returns from last summer 😬

Ugh, I feel your pain! Been dealing with a similar 810 freeze since April and it's absolutely maddening. The fact that your transcript shows everything processed correctly but they're still holding onto $6,541 is just cruel. At least you got the in-person verification done - I'm still waiting for my appointment. Have you tried reaching out to your congressperson's office? I know it sounds extreme but sometimes they can light a fire under the IRS when normal channels aren't working. The taxpayer advocate service might also be worth a shot since you're going on almost a year now 😤

Has anybody used TurboTax to handle this kind of mixed-use property situation? I'm wondering if it can correctly track the suspended passive losses from year to year when a property changes from full rental to mixed-use...

I want to add another important consideration that hasn't been mentioned yet - the short-term rental classification could actually work in your favor for future years. Since you mentioned most rentals will be weekend getaways averaging less than 7 days, this income would be classified as non-passive under IRC Section 469(c)(7) if you provide substantial services. If you're actively managing the property (cleaning, maintenance, guest services, etc.) and the average rental period is 7 days or less, the rental income becomes ordinary business income rather than passive rental income. This means you could potentially use those suspended passive losses from last year against OTHER passive income sources, while treating your current short-term rental as active business income. However, this creates a mixed situation where your prior losses remain passive (from when it was traditional rental) while current income is active - so they still can't offset each other. But it might open up better deduction opportunities for current year expenses and depreciation since you'd be treated as actively engaged in the rental business. Worth discussing with a tax professional who understands both passive activity rules AND short-term rental classifications!

Anyone know if the tax treatment is different for federal vs state settlements? I got both from my case.

I went through this exact situation about two years ago with a $85k wrongful termination settlement. Here's what I learned the hard way: First, don't wait for your former employer to send tax forms - they might not, or they might send them late. My employer didn't send anything until I contacted them in February asking about it. The key thing is getting a clear breakdown of what each portion represents. My settlement had: - $45k for lost wages (taxed as regular income, got a W-2) - $25k for emotional distress (taxable as ordinary income since no physical injury) - $15k for punitive damages (also taxable as ordinary income) One thing that really helped me was keeping detailed records of everything - all the paperwork, correspondence, medical bills if you had any stress-related health issues. Even if those don't qualify as "physical injuries" for tax-free treatment, having documentation helps if questions come up later. Also, don't forget about estimated taxes! If your settlement is large enough, you might need to make quarterly payments to avoid penalties. I got hit with an underpayment penalty because I didn't realize this. My biggest recommendation is to set aside about 30-35% of the taxable portions right away for taxes. Better to have too much saved than to scramble come tax time.