Did you get any kind of confirmation when they received your return? I sent mine 2 months ago and have heard nothing...starting to worry it got lost.

I didn't get any immediate confirmation when they received it, but you can check the processing status using the IRS "Where's My Refund" tool online if you're expecting a refund. For prior year returns without refunds, there's unfortunately no easy way to track them. If you're really worried it got lost, you could try calling the IRS (or using that Claimyr service others mentioned) to have them check if they received it. They should be able to look it up by your SSN. Two months isn't unusual for processing time though - I've heard some people waiting 4-6 months for prior year returns to be fully processed.

This is really helpful advice! I'm curious about the record-keeping aspect you mentioned. What specific documents should I be keeping for the rental portion of my expenses? I assume I need receipts for repairs and utilities, but what about things like depreciation calculations or the square footage measurements? Should I be taking photos of the rooms or getting some kind of official measurement? I want to make sure I'm prepared if I ever get audited, especially since this is my first time dealing with rental income reporting.

Excellent question about documentation! For rental record-keeping, you'll want to maintain several key types of records: **Physical Documentation:** - Floor plan or sketch showing room dimensions and square footage calculations - Photos of the rental rooms and common areas (helpful for insurance and depreciation purposes) - Lease agreements or written arrangements with roommates, even if informal **Financial Records:** - All receipts for repairs, improvements, and supplies allocated to rental areas - Utility bills, insurance statements, property tax bills (you'll allocate percentages) - Bank statements showing rental income deposits - Records of any rental-related expenses like advertising for roommates **Calculation Documentation:** - Written explanation of how you determined the rental percentage (e.g., "2 bedrooms out of 4 total rooms = 50%" or square footage method) - Depreciation calculation worksheets (your tax software or preparer can help with this) The IRS doesn't require professional measurements, but your method should be reasonable and consistent. Many people use simple room counts or square footage measured with a tape measure. The key is being able to explain and justify your allocation method if questioned. Keep everything for at least 3 years after filing (longer for depreciation records), and consider scanning important documents to have digital backups. Good record-keeping from the start will save you major headaches later!

This is exactly the kind of reassuring real-world experience I needed to hear! I've been losing sleep over this situation, but your breakdown of the deduction percentages makes it seem much more manageable. Quick question - when you calculated your rental percentage, did you include shared spaces like the kitchen and living room in your calculations, or just the actual bedrooms being rented? I'm trying to figure out if I should count common areas that my roommates use along with me, or if those should be excluded since I use them too. Also, did you run into any issues with the IRS wanting specific documentation for how you calculated the percentage? I want to make sure I'm setting myself up correctly from the start.

Great question about shared spaces! I struggled with this exact calculation too. I ended up using what's called the "rooms method" where I counted the rented bedrooms plus a proportional share of common areas. So if I'm renting 2 bedrooms out of a 4-bedroom house, that's 50% of the bedrooms, and I applied that same 50% to shared spaces like kitchen, living room, and bathrooms. My CPA said this was a reasonable and commonly accepted approach. The alternative "square footage method" can get tricky with shared spaces because you have to decide how much of your kitchen usage vs. theirs to allocate. For documentation, I just kept a simple sketch of my house layout with room dimensions and a one-page explanation of my calculation method. The IRS has never questioned it, but having it written down gave me confidence that I could defend my numbers if needed. The key is being consistent - whatever method you choose, stick with it year after year. Honestly, once you get the system set up the first year, it becomes pretty routine. The biggest relief was realizing that this is a totally normal situation that thousands of homeowners deal with every year!

Our firm did this last year. The correct sequence was: 1) File Form 8832 electing to be treated as a partnership with a prospective effective date, 2) File a short-period final S Corp return (Form 1120-S) up to the day before the effective date, 3) Start filing Form 1065 partnership returns from the effective date forward. Make sure you check the "final return" box on the 1120-S. The IRS will send a confirmation letter of the entity change, which took about 6 weeks in our case.

That's super helpful, thanks! Did you have any issues with payroll continuity during the transition? I'm wondering if we need new EIN or can keep the same one.

This is really helpful info about keeping the EIN! I'm new to this whole entity classification thing, so forgive me if this is a basic question - when you say owner-employees will transition from W-2s to partnership distributions, does that mean they'll end up paying more in taxes? I'm trying to understand if there are any downsides to making this switch from the owners' perspective. Also, do the quarterly estimated payments need to cover both income tax and self-employment tax for the partnership income?

This is such valuable insight about state conformity issues! I'm relatively new to vacation home taxation and hadn't considered how state rules might diverge from federal treatment. Could you give an example of how a state might treat vacation home losses differently? I'm particularly curious about states like Florida or Texas that don't have state income tax - do they present any unique considerations for vacation home owners, or is it mainly an issue with states that have their own complex tax codes? Also, your point about documenting the expense allocation methodology is excellent. Are there any particular allocation methods that are generally more defensible than others? I've been using a simple days-based allocation (rental days / total days used), but I'm wondering if there are more sophisticated approaches that might be more appropriate for certain types of expenses.

@Maya Diaz Great questions! For states without income tax like Florida and Texas, you re'right that there aren t'conformity issues since there s'no state income tax to worry about. The complexity mainly arises in states with their own tax codes. For example, some states don t'allow passive loss carryovers at all, while others might have different phase-out thresholds for the $25,000 rental real estate allowance. I ve'seen cases where California has different timing rules for when certain deductions can be claimed compared to federal treatment. Regarding allocation methods, the IRS generally accepts a days-based approach, but there are some nuances. For expenses that are more directly tied to rental use like (advertising, rental management fees, or repairs made specifically for tenants ,)those can often be allocated 100% to the rental activity. For shared expenses like utilities and general maintenance, the days-based method you re'using is typically the most defensible. Some practitioners use a more sophisticated approach for expenses like utilities - allocating based on actual rental vs. personal use periods rather than just total days in the year. For instance, if the property was only available for rent during certain months, you might allocate utilities only during those periods. Just make sure whatever method you choose is consistently applied and well-documented!

This is such a comprehensive resource - thank you to everyone who's contributed! As someone new to the community and just starting to handle vacation home cases, I'm amazed at the complexity involved. @Zara Rashid, your questionnaire approach is brilliant! I can see how getting all that information upfront would prevent so many headaches down the road. I'm definitely going to implement something similar for my practice. One thing I'm still wrapping my head around is the interaction between all these different limitations. If a client has multiple rental properties - some vacation homes, some regular rentals - and also has other passive activities like limited partnership interests, how do you prioritize which losses get used first when there's passive income available? Is there a specific ordering rule, or is it taxpayer election? I imagine the strategy could vary significantly depending on which type of losses are more likely to be usable in future years vs. those that might get "trapped" indefinitely. Also, for the principal residence test you mentioned - does that apply even if someone is working remotely temporarily, like during COVID when many people spent extended time at vacation homes? I'm wondering if there are any recent guidance or cases addressing this scenario.

I'm so glad this thread exists! I was literally pulling my hair out trying to figure this out. I've been staring at my 1099-Rs for weeks and getting more confused every time I tried to research it online. The money flow explanation really clicked for me too - 401(k) → Traditional IRA → Roth IRA. When you think about it that way, it's obvious that the conversion isn't creating new taxable income, it's just changing the tax treatment of money that was already distributed. I actually called my old 401(k) provider thinking I was missing some forms, but they confirmed I only get 1099-Rs for the actual distributions out of the 401(k), not for the subsequent IRA-to-IRA movements. Now I just need to dig through my old tax returns to see if I ever made non-deductible IRA contributions. Fingers crossed I can reduce that taxable amount on line 4b!

This whole discussion has been incredibly enlightening! I'm a newcomer to this community but found myself in a very similar situation this tax season. I had rolled over my old 403(b) into a traditional IRA and then did a partial Roth conversion, and I was completely lost on the reporting. The money flow concept that everyone keeps mentioning really helped me understand why we don't double-count on line 4a. It's such a simple way to think about it - the distribution happened when money left the original retirement account, not when it moved between IRA types. What really caught my attention was the discussion about Form 8606 and non-deductible contributions. I think I may have made some of those back when my income exceeded the deduction limits, but honestly I'm not even sure where to look for that information. Would those show up on my old 1040s, or do I need to dig through other paperwork? Thanks to everyone who shared their experiences - as someone new to dealing with these complex retirement account moves, this real-world advice is invaluable!