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Another thing to consider is that different countries have different inheritance tax treaties with the US. This can affect what assets are subject to US estate tax and how the transfer certificate process works. For example, if your father was a resident of a country that has an estate tax treaty with the US (like UK, Germany, France, etc.), you might be entitled to more favorable treatment or simplified procedures. Worth checking if your country has such a treaty!
Thank you for bringing this up! My father was a resident of Germany, which I believe does have an estate tax treaty with the US. Do you know how this might specifically affect our filing requirements for the 706-NA or the transfer certificate process?
Yes, Germany does have an estate and gift tax treaty with the US! This is good news for you. The treaty provides several benefits that may simplify your situation. Under the US-Germany treaty, you may be entitled to a pro-rated unified credit against the US estate tax, beyond the standard $13,000 credit given to non-treaty countries. This often results in no US tax being due for estates under a certain threshold. Additionally, the treaty clarifies which country has primary taxing rights for certain types of assets, potentially reducing double taxation. For the 706-NA filing specifically, you'll need to cite the treaty provisions you're relying on (usually in an attached statement). You should also include documentation proving your father's German residency at time of death. While you still need to file the 706-NA to get the transfer certificate, the treaty provisions may reduce your reporting burden or tax liability.
One thing nobody mentioned yet - be careful about the timing! There's a 9-month deadline from the date of death to file Form 706-NA. If you miss this deadline, you might face penalties or complications. Also watch out for currency conversion - all values have to be in USD based on the exchange rate on the date of death, not the current rate. The IRS is very specific about this.
Is there any way to get an extension on that 9-month deadline? My aunt passed away 7 months ago and we're just now figuring out she had US investments. Getting all the documents together in 2 months seems impossible!
One thing nobody mentioned yet - make sure your purchase contract addresses FIRPTA! Our contract had no mention of it, and when we discovered the seller was foreign, there was disagreement about who would bear the costs associated with the withholding process. The seller tried to increase the purchase price to offset the withholding amount, which of course we refused. It created a lot of unnecessary tension. Your purchase agreement should clearly state that the seller will provide all necessary FIRPTA documentation and that any required withholding comes from their proceeds, not as an additional cost to you.
That's really helpful advice! I just checked our purchase agreement and there's literally no mention of FIRPTA at all. Would this be something I should have my real estate attorney add as an addendum now, or is it too late since we've already signed?
It's definitely not too late to address this through an addendum. I would have your attorney draft language specifically stating that the seller must provide appropriate FIRPTA documentation before closing and confirm that any withholding amounts come from the seller's proceeds. Most sellers will agree to this since it's a standard practice, but getting it in writing now will prevent any last-minute complications or disputes. Your attorney or title company should be able to handle this fairly easily with a simple addendum that both parties sign.
Make sure your title company or closing attorney is experienced with FIRPTA! Our first title company made a mess of our FIRPTA withholding and nearly caused us to miss our closing date. We switched to a different title company that had specific experience with international sellers, and the difference was night and day. They knew exactly which forms were needed, helped the seller complete them correctly, and handled the withholding and submission to the IRS.
I'm a tax preparer, and this home office mileage question comes up a lot with my clients. The key distinction is whether your home office qualifies as your "principal place of business" under IRS rules. If it does (which sounds like your case), then travel from your home office to other business locations is generally deductible. However, the IRS will look at the "regular or principal place of business" for each of your income streams separately. So if one of your side hustles has a different principal location, the rules might apply differently to travel for that specific business activity. Make sure you keep a detailed mileage log with dates, starting/ending locations, business purpose, and miles driven. Also document how the library qualifies as a legitimate business location (what work you do there, why it's necessary for your business, etc.).
Thanks for this insight! How exactly does the IRS define "principal place of business"? I definitely do most of my work from my home office, but now I'm wondering if I need to track hours or something to prove it.
The IRS generally considers your home office to be your "principal place of business" if you use it regularly and exclusively for administrative or management activities of your business, and you have no other fixed location where you conduct these activities. You don't necessarily need to spend the most time there, but it should be where you handle your core business functions. You don't need a formal hour-tracking system, but it's good practice to document how you use your space. Take photos of your home office setup, keep receipts for office equipment, and maintain records of the work you regularly perform there. This creates a paper trail showing that your home truly is your main business location, which strengthens your case for deducting travel to other work locations.
Just want to point out something that helped me with a similar situation - the "temporary work location" rule might apply here. According to IRS Publication 463, if you have a regular place of business (your home office) and you travel to a temporary work location (the library), those miles can be deductible. But there's a catch - if you go to the library regularly and it becomes a "regular place of business" rather than a temporary location, the rules change. The IRS doesn't have a precise definition of how frequent is too frequent, but it's something to be aware of.
This is actually really helpful! I wonder if going to different libraries or coffee shops would help establish that they're temporary locations rather than regular places of business? Like if you rotate between 3-4 different spots instead of always going to the same one?
That's a smart strategy! Rotating between different locations can definitely help support the argument that these are temporary work locations rather than establishing a second regular place of business. The IRS looks at patterns of use, so varying your locations shows you're not setting up a fixed secondary office. I'd also suggest keeping notes about why you chose each location for specific work tasks - maybe the main library has better research databases, the branch library is quieter for client calls, or a coffee shop has better wifi for certain projects. This business justification strengthens your case that these are legitimate temporary work locations rather than just personal preference. Just make sure to still maintain detailed mileage logs for each trip, regardless of which location you visit. The documentation is key for any potential IRS questions down the road.
Has anyone actually been audited over this kind of thing? I got a 1099-K from PayPal too for about $5,200 which was mostly just friends paying me back for concert tickets and group vacation expenses. I'm wondering how aggressive the IRS is about following up on these.
I work at a tax prep office, and we've handled several cases involving 1099-Ks from payment apps. So far, we haven't seen many audits specifically targeting these situations, but that could change as the reporting thresholds have decreased and the IRS is getting more of these forms. The key thing is being proactive about reporting it correctly rather than ignoring it. The IRS computers will automatically flag a return if they received a 1099-K for you but don't see that amount addressed somewhere on your tax return.
I'm dealing with a similar situation but with a twist - I received loans through Zelle and Venmo but repaid some through PayPal when those platforms weren't working. Now I have 1099-Ks from multiple platforms showing different pieces of the puzzle. From what I've learned researching this, the most important thing is creating a clear paper trail that shows the loan-to-repayment relationship across all platforms. I'm putting together a spreadsheet that matches each incoming loan (with screenshots of the original transfer descriptions like "loan" or "help with rent") to the corresponding repayment, even when they happened on different apps. For reporting, I'm planning to use the Schedule 1 approach that Melissa mentioned - reporting the total 1099-K amounts and then offsetting with a negative adjustment. I'll attach a detailed explanation and my documentation spreadsheet to show these were legitimate personal loans, not income. The cross-platform aspect definitely makes it more complex, but the fundamental principle is the same - these are loan repayments, not taxable income, regardless of which app processed them.
Aliyah Debovski
I went through this exact same situation! It's so frustrating when you're expecting one amount and only get part of it. Based on what you're describing, you almost certainly received one refund (either federal or state) and the second one is what's showing the new deposit date. The easiest way to figure out which is which is to pull up your actual tax returns - your Form 1040 will show your federal refund amount on line 35a, and your state return will have the state refund amount clearly marked. Compare those individual amounts to the $2300 you already received. Most likely what happened is you were looking at the combined total of both refunds ($4800) when you did your initial calculation, but they process and deposit separately. The banks just label both as "TAX REFUND" which makes it super confusing. Check both the IRS Where's My Refund tool AND your state's refund tracker to see the status of each one separately.
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Miguel Harvey
ā¢This is super helpful! I never thought to check the actual line items on my tax forms. I've been so focused on the online trackers that I completely forgot the forms would show the exact amounts for each refund. Going to dig out my paperwork right now and compare. Thanks for breaking it down so clearly!
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Natasha Petrov
Had this exact same confusion earlier this year! You're definitely not alone in this. The way you're describing it - expecting around $4800 but only getting $2300, then seeing a new deposit date - sounds like classic federal/state separation. Here's what probably happened: when you calculated $4800, you were looking at your total refund (federal + state combined), but they arrive as separate deposits. The $2300 you got was likely your federal refund, and the upcoming deposit is probably your state refund (or vice versa). Quick way to verify: log into whatever tax software you used (TurboTax, H&R Block, etc.) and look at your return summary. It should break down exactly how much you were supposed to get from federal vs state. Then you can match that to what you've already received. Also worth checking if you had any fees deducted from your refund (like tax prep fees) - that could account for some of the "missing" money too. The whole system could definitely be clearer about labeling these deposits!
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