That's actually a really interesting approach I hadn't considered. Would I need some kind of formal appraisal to prove the collectible is worthless? Or would documentation of the scam be enough to claim the capital loss?

You don't necessarily need a formal appraisal, but you do need adequate documentation to prove worthlessness if audited. Documentation about the scam would be helpful, especially if you filed any kind of police report or complaint with consumer protection agencies. For collectibles specifically, getting a written statement from a reputable dealer in that type of collectible confirming it has minimal or no value can also be good supporting evidence. The key is showing that the loss of value is permanent, not just a temporary market fluctuation.

You would still eventually get the loss, but timing matters. If you contribute the property and the partnership later liquidates giving you nothing, you'd recognize a loss equal to your remaining basis in the partnership interest (which started at $1,000 but could be adjusted by partnership operations over time). The issue with contributing property with built-in loss is that Section 704(c) requires the built-in loss to be allocated to the contributing partner when the property is sold or otherwise disposed of by the partnership. But you don't lose the loss entirely - it's just a matter of when and how you get to claim it.

Thank you for sharing your experience! I just checked my county's website and found a property search function I didn't know about. You're right - they do have the assessed value listed even though bills haven't been mailed. Does having the assessed value mean it's officially "imposed" as someone mentioned above? I want to make sure I'm following the proper IRS guidelines.

Yes, if you can see the assessed value on the official county website, that means the tax has been "imposed" for IRS purposes. The physical bill is just a notification - the actual tax obligation is created when the assessment is finalized and recorded in the county system. Make sure to print or save a PDF of the assessment page showing the date and amount as documentation for your records. I also wrote "Property Tax Prepayment - PIN #12345" in the memo line of my check as additional documentation. The IRS never questioned my deduction.

I believe you're confusing the safe harbor rules for estimated tax payments with property tax deductions. For property tax deductions, the tax must actually be assessed (imposed) to be deductible in the year paid. There's no safe harbor that allows you to deduct estimated property tax payments before assessment.

You're right, I misunderstood what my accountant was telling me. He was actually referring to using last year's property tax amount for estimated tax payment calculations, not for claiming the property tax deduction itself. Getting the tax terminology mixed up shows why I need an accountant in the first place lol. Thanks for the correction!

17 Have you run into any issues with the FIRE system rejecting files? I tried it once and got frustrated with all the format requirements and ended up just paying a service.

22 The FIRE system can be finicky about formatting, for sure. The most common rejection issues I've encountered were with TIN/name mismatches and control sequence errors in the file. My advice is to run the file through their test system first before submitting - that catches most formatting problems. Once you get a clean template working, you can reuse it year after year. The learning curve is steep but worth it if you're doing this regularly and want to avoid service fees.

14 I used the Excel 1099 service last year and it was decent for a small number of forms (I did about 25). The integration is pretty seamless if you're already using Excel. It's not the cheapest option though - I think I paid around $3.50 per form plus e-filing fees. And it doesn't handle state-specific forms, so I still had to do those separately. Might be worth looking at if you're only doing federal 1099-NECs and already have everything in Excel format.

2 Thanks for the info! I might check it out for next year. For now I'm going with Tax1099 since several people recommended it and it handles the state forms too.

Does anyone know if you can use dependent care FSA for summer camp? My kids are school age but need supervision during summer months. Would that qualify as a dependent care expense?

Yes, summer day camps generally qualify as eligible dependent care expenses for FSA purposes! This includes general day camps, as well as specialized camps focusing on sports, arts, or academics. The key requirement is that the camp enables you to work or look for work. Overnight camps do NOT qualify though, as they're considered primarily for entertainment rather than care. Also, kindergarten and higher education costs aren't eligible, as they're considered educational rather than care expenses.

Thx for the clear explanation! So if I'm in the 24% bracket plus 7% state tax, am I saving 31% by using the dependent care FSA? Or is there more to it?

Does this same rule apply to people who enrolled but then lost their job mid-year? My sister's income dropped below the threshold after a layoff but she still had marketplace coverage with premium tax credits for the full year.

Yes, this same rule applies to job loss situations as well. The critical factor is that when your sister initially enrolled, she provided an income estimate that qualified her for premium tax credits. The fact that her income later dropped below the threshold due to an unexpected layoff is exactly the type of situation this rule was designed to protect. The IRS recognizes that income can be unpredictable, especially with job loss, reduced hours, or difficulty finding employment. As long as the Marketplace determined she was eligible for advance premium tax credits at enrollment based on her good-faith income projection, she should be able to claim the premium tax credit for the entire year even though her actual income ended up below 100% FPL.

Immigration status definitely matters for ACA coverage. F-1 student visa holders are typically considered "non-resident aliens" for tax purposes for the first 5 calendar years, which affects eligibility. They're usually required to have health insurance through their school anyway, not the marketplace. If your friend got marketplace coverage, they might have issues because students on F-1 visas often don't qualify for premium tax credits. It depends on how long they've been in the US and whether they pass the "substantial presence test" for tax residency.