Does the Opportunity Zone investment have to be made immediately after selling the software? Are there timing requirements like with a 1031 exchange? This sounds interesting.

You have 180 days from the date of sale to invest in a Qualified Opportunity Fund to defer the capital gains from your software sale. Unlike a 1031 exchange, you only need to invest the gain portion, not the entire proceeds. The key timing requirements are the 180-day investment window, and then the holding periods: hold for 5 years and you get a 10% reduction in the deferred gain; hold for 10+ years and any new appreciation on the opportunity zone investment itself becomes completely tax-free. This could be especially valuable if you're buying a vacation rental that you expect to appreciate significantly.

Did he use a qualified intermediary? I've heard that's essential for doing these exchanges properly.

Thanks for mentioning this! Do you know if I would qualify for the Child Tax Credit specifically, or would it be the Credit for Other Dependents since I'm the grandparent, not the parent? Also, would my daughter still be able to get the disability benefits if I claim the kids on my taxes?

You can potentially qualify for the Child Tax Credit even as a grandparent! The relationship test for the CTC includes grandchildren. As long as they meet the other tests (lived with you more than half the year, you provided more than half their support, they're under 17, etc.), you can claim the full Child Tax Credit, which is worth much more than the Credit for Other Dependents. Your daughter can continue receiving the disability benefits for the children regardless of who claims them on taxes. The tax dependency status and disability benefits eligibility are separate systems. The important thing is that you're actually using the majority of resources (including your own money plus a portion of those benefits) to support the children.

Yes! We claim my wife's brother who has autism and we deduct a lot of his therapy expenses as medical expenses. If their medical expenses exceed 7.5% of your AGI, you can itemize and deduct them. Also look into FSA or HSA accounts to pay for these expenses pre-tax if possible.

Thanks for suggesting the 529 plan option. My concern with selling outright is the capital gains tax - we've owned the property for about 12 years and it's appreciated significantly. I was under the impression that if I used a 1031 exchange, I could defer those taxes indefinitely, whereas selling and using for college would trigger immediate tax liability. Are you saying there's some education-related exemption for capital gains that I'm not aware of? That would definitely simplify things if so!

I think I wasn't clear - there's no special education exemption for capital gains on rental property sales. You would indeed face capital gains taxes if you sell without a 1031 exchange. What I meant was more about weighing the complexity of the 1031 process against your goals. If college funding is the primary objective, sometimes it's worth taking the tax hit for simplicity and flexibility. However, if preserving wealth long-term is equally important, then the 1031 approach makes more sense despite the additional complexity. The 529 suggestion was separate - if you do sell, putting some proceeds in a 529 would give tax-free growth for the education portion.

This is really important! I made this exact mistake with my daughter's housing during college. I did a 1031 exchange, put her in the property, charged her below-market rent, and got audited three years later. Had to pay back taxes plus penalties because the IRS reclassified it as a personal residence. Document EVERYTHING and charge fair market rates!

When I filed SS-8 last year, I included copies of my contract, emails showing how they controlled my work schedule and processes, and a detailed description of my daily work responsibilities. The more evidence you have showing employer control, the stronger your case. Remember the key factors are behavioral control, financial control, and relationship type. Document everything that shows they treated you like an employee!

Thanks for the detailed advice! I definitely have emails showing them dictating my hours and how to do tasks. I'll compile those along with my contract. Did you also include any information about other employees doing similar work who were classified as W-2 instead of 1099?

I had a similar experience with H&R Block's software! It technically had the form but provided zero guidance on how to fill it out properly. Ended up making mistakes that caused my return to be delayed.

Wait, really? That would be amazing. Do I have to specifically ask for this program by name when I contact them? And would I qualify even though I had the extension and still missed it?

Yes, you should specifically ask for "First Time Penalty Abatement" when you contact them after filing. Don't rely on them to offer it - many IRS agents won't mention it unless you ask. You would likely still qualify despite missing your extension deadline. The main requirement is having a clean compliance history for the three prior tax years (meaning you filed and paid on time, or had valid extensions and paid by those deadlines). The IRS sees this as a one-time courtesy for otherwise compliant taxpayers.

I'm so sorry about your mom. I was in a similar situation with my father's passing. The IRS does have something called "reasonable cause" for penalty relief. You'll need to attach a letter explaining the circumstances and showing how the death and estate duties prevented you from filing on time. Include any documentation you can (death certificate, executor appointment papers). In my experience, they were actually pretty understanding.