Would it be better to just use a Roth IRA for this kind of real estate investing? Does UBTI still apply with Roth accounts? Trying to figure out the best structure before I get started.

UBTI rules apply equally to both Traditional and Roth IRAs - there's no advantage to either type when it comes to UBTI taxation. The difference is that with a Traditional IRA, you'll eventually pay taxes on distributions anyway, while with a Roth, you'd normally never pay taxes on qualified distributions. This makes UBTI potentially more disadvantageous in a Roth because you're paying taxes on money that would otherwise grow completely tax-free. However, if the leveraged real estate investment significantly outperforms other potential investments even after UBTI tax, it might still be worthwhile in either account type.

I used the checkbook IRA LLC structure for several years. The UBTI rules still apply exactly the same way - if there's debt-financing involved in the real estate, you'll trigger UBTI regardless of whether it's a direct IRA investment or through a checkbook LLC. The checkbook structure gives you more control over the investments but doesn't change the tax treatment. You'll still need an EIN for UBTI reporting purposes if applicable.

That's really helpful advice! We do claim education credits each year. Would taking the capital loss deduction potentially mess with those benefits? What should I watch out for?

Generally, lowering your AGI with capital losses is actually beneficial for most education credits since many have income phaseout limits. The American Opportunity Credit starts phasing out at $80,000 for single filers and $160,000 for joint filers, while the Lifetime Learning Credit begins phasing out at $80,000 for single and $160,000 for joint filers. Capital losses that reduce your AGI could potentially help you stay under these thresholds if you're close to them. However, if your income is already low, you should ensure you have enough tax liability for non-refundable credits to be applied against. The AOTC is partially refundable, but the LLC is not refundable at all.

Question - does it matter which lots you sell if you bought the same stock multiple times? Do you have to sell everything or can you pick which purchases to sell?

Thanks for bringing up the treaty benefit possibility! I'm from Sweden, and I believe there is a tax treaty, but I'm not sure how it applies to fellowship income. My visa is J-1 research scholar. Would that potentially make some of my fellowship exempt? Also, my fellowship covers tuition remission separately from my stipend. The stipend is what will be on the 1042-S. Does that change anything?

Yes, Sweden definitely has a tax treaty with the US, and J-1 research scholars often qualify for benefits! Under Article 20 of the US-Sweden treaty, you may be eligible for an exemption on your fellowship income for up to two years. Regarding your stipend versus tuition remission - that's actually ideal! If the tuition remission is paid directly to the university, it's not considered taxable income to you at all and shouldn't appear on your 1042-S. The stipend portion on your 1042-S may be partially or fully exempt under the treaty. When you get your 1042-S, check if Box 3 (type of income) shows a code like "16" (scholarship/fellowship) and if Box 10 shows "20" (for Article 20) - that would indicate treaty benefits were applied.

I tried using TurboTax for this exact situation last year and it was a nightmare. It kept trying to treat my fellowship as self-employment income and wanted me to pay self-employment tax on it. Ended up having to go to a CPA who specializes in international tax issues and he found that TurboTax had miscalculated my tax by over $3000!

I had no idea this existed! How does my cousin apply for this Form 911 help? Does he need to provide specific documentation about his financial situation?

He'll need to fill out Form 911 (Request for Taxpayer Advocate Service Assistance) which asks for details about the hardship. He should be very specific about exactly how the tax situation is causing financial hardship - like documentation showing he can't pay rent, utilities, or medical expenses because of the tax payments. Supporting documentation is super important - recent bank statements, bills, income proof, anything showing the gap between income and necessary expenses. The more concrete evidence of hardship, the better his chances. He can submit the form online, by mail, or fax. Sometimes it's actually faster to reach out to his local Taxpayer Advocate office directly by phone - the form includes contact info for local offices.

This is so important! I was a 1099 worker and realized I missed like $8k in legit deductions when I finally got help from a tax pro. Lowered my tax bill significantly. Does the cousin already have an accountant or did he DIY his taxes?

I don't think I made any payments after the bankruptcy, but now I'm paranoid. Would partial payments reset the clock or only full payments? And how would I check for liens? Just call the county recorder's office?

Any payment, even a small partial payment, can reset the collection statute. It's one of the ways people accidentally revive old tax debts. The IRS sometimes even sends out collection notices on expired debts hoping you'll make a payment without realizing it restarts the clock. For liens, yes, you can check with your county recorder's office or clerk's office. Most counties now have online systems where you can search for liens by name. If you find a lien and your debt is truly beyond the collection statute, you can request a "lien withdrawal" from the IRS using Form 12277. Just be careful about contacting them if you're not 100% sure the debt is uncollectible.

Is this really true? I thought once the statute of limitations was up, they couldn't touch your money at all - including refunds. Can someone confirm if refund offset is really not subject to the 10-year rule?

You're partially right - I should have been more clear. For most federal tax debts, the refund offset ability does end when the collection statute expires. However, there are exceptions for things like child support, student loans, state tax debts, and a few other categories that can continue to offset refunds. Also, if the IRS has already applied your refund to an old tax debt before the statute expires, they don't have to give it back even if the debt becomes uncollectible later. Always best to check your tax transcripts for the specific collection statute expiration date (CSED) for each tax year you owe.