One thing to keep in mind is that most RSUs are taxed at vesting (your company probably withheld shares for taxes when they vested). So your actual cost basis for tax purposes is the FMV on vesting date, not zero. This means your older RSUs that are "lower than current price" might actually represent a loss if the current price is lower than when they vested! In that case, selling them would give you a capital loss you can use to offset other gains. Check your vesting statements carefully!

Great advice from everyone here! One additional consideration for @Kristin Frank - if you're in a higher tax bracket this year but expect to be in a lower bracket next year (maybe due to job change, retirement, sabbatical, etc.), it might make sense to delay selling the older RSUs to take advantage of the lower long-term capital gains rate when your overall income is lower. Also, don't forget about the Net Investment Income Tax (NIIT) - if your modified adjusted gross income exceeds $200K (single) or $250K (married filing jointly), you'll pay an additional 3.8% tax on investment income including capital gains. This could influence the timing of when you sell. The tools others mentioned like taxr.ai sound really helpful for modeling different scenarios, especially when you factor in state taxes and these additional considerations!

I went through this exact same frustrating situation with TD Bank last month! As a resident alien since 2016 under the substantial presence test, I was shocked when they insisted I needed to complete a W8-BEN form despite me explaining multiple times that this was incorrect. What finally worked for me was a combination of strategies I've seen mentioned here. I brought: (1) my last two years of tax returns showing I filed as a resident alien, (2) a highlighted copy of the W8-BEN form showing the "DO NOT use this form if you are a U.S. person (including a resident alien individual)" instruction, (3) relevant pages from IRS Publication 519, and (4) my substantial presence test calculation written out clearly. The breakthrough came when I politely but firmly asked the branch manager to provide written documentation of their policy requiring customers to complete forms that contradict IRS guidelines. I explained that I was concerned about the legal implications of signing a form that contains a false certification under penalty of perjury. That immediately got their attention and they agreed to escalate to their compliance department. Within three business days, compliance called me back and confirmed that I should indeed be using the W9 form. They even updated their branch procedures to prevent this confusion for future customers in similar situations. The key is being persistent but professional, bringing comprehensive documentation, and not being afraid to escalate when branch-level staff don't have the expertise to handle tax residency questions. Don't give up - you're absolutely correct about which form you should be using!

I'm going through this exact same issue right now with my local Bank of America branch! Been a resident alien since 2020 through the substantial presence test, and they keep insisting I need the W8-BEN even though I've explained multiple times that it's the wrong form. What's been most frustrating is that I brought my 2023 tax return (Form 1040) showing I clearly filed as a resident alien, but the branch representative said their "computer system" only recognizes green card holders as residents. When I showed her the W8-BEN instructions that explicitly state "DO NOT use this form if you are a U.S. person (including a resident alien individual)," she just said "that's what our training manual says to use for non-citizens." The disconnect between immigration status and tax residency status seems to be where most bank staff get confused. I'm definitely going to try the strategy mentioned here about asking them to document their policy in writing - that's such a smart approach since no bank wants to be on record requiring potentially incorrect federal tax certifications. Has anyone had specific success with Bank of America's compliance department, or should I try escalating through their main customer service line? I'm willing to be patient with the process, but I don't want to sign the wrong form just to get this resolved quickly. Thanks for posting this - it's really helpful to see I'm not the only one dealing with undertrained bank staff on basic tax residency rules!

I've been following this discussion closely as I'm facing a very similar situation with my own medical practice partnership. The insights everyone has shared have been incredibly valuable. One additional consideration I'd like to add: timing of the decision matters more than I initially realized. I spoke with my attorney about this, and she pointed out that making entity structure changes after you've already signed the operating agreement and started receiving K-1s can trigger more complex tax implications than setting it up correctly from the beginning. If you're still in the negotiation phase with your managing partner, this might actually be the ideal time to have these discussions, even if you ultimately decide to keep things simple. Getting clarity on the practice's policies around partner entity structures now could save headaches later if your circumstances change. @Amara Nnamani's point about the separate S-corp election while maintaining personal partnership interest seems like the most practical solution. This approach respects your managing partner's concerns about the operating agreement while still giving you the tax flexibility you're seeking. I'm curious - have you had a chance to run the actual numbers on potential tax savings? Sometimes the administrative costs and complexity can eat into the benefits more than we expect, especially in the first few years when you're getting everything set up properly.

As someone who went through a similar decision process with my dental practice partnership last year, I wanted to share my experience and what ultimately worked for me. After extensive research and consultations (including using some of the resources mentioned in this thread), I ended up following the approach that @Amara Nnamani and others have recommended - keeping my partnership interest personal while setting up a separate single-member LLC with S-corp election for my other business activities. This gave me several advantages: 1. **No conflict with partners**: My managing partners were completely comfortable with this approach since it didn't require any changes to our operating agreement or K-1 issuance 2. **Achieved tax savings**: I was still able to reduce my self-employment taxes on income from my separate consulting and speaking activities 3. **Avoided professional complications**: No issues with dental board licensing, malpractice insurance, or credentialing with insurance companies 4. **Maintained flexibility**: I can modify my separate entity structure without affecting the practice partnership The key insight for me was realizing that the tax benefits I was seeking didn't actually require changing how the partnership K-1 was issued. Instead, I focused on optimizing the tax treatment of my other professional income streams through the separate entity. @Jayden Reed - given all the potential complications discussed in this thread, you might want to consider whether there are other income sources (consulting, speaking, medical device work, etc.) where you could implement the S-corp strategy without touching your main partnership structure. This could give you the tax benefits you're looking for while keeping peace with your managing partner.

As someone who's been in property management for over a decade, I want to emphasize how important it is to act quickly on situations like this. What your tenant is doing with the 1099-A form is absolutely not legitimate - there's no borrower/lender relationship between you as landlord and tenant. These "redemption theory" scams have unfortunately become more sophisticated over the years. The tenant is likely trying to create a paper trail that makes it look like they've somehow "paid" their rent through this fictional trust arrangement, when in reality they're just behind on rent and trying to avoid consequences. Here's what I recommend doing immediately: 1) Save all documentation - the 1099-A form, rent payment records, lease agreement, any communications about this "trust" 2) Contact the IRS to report the improper form filing (Form 3949-A as others mentioned) 3) Send written notice to your tenant that you've received an improperly filed tax form and that you're reporting it to authorities 4) Contact the tax preparation service that helped file this form - they need to know their services were used for fraud Don't let this slide thinking it will resolve itself. These schemes often escalate with additional fraudulent filings, and the longer you wait, the more complicated it becomes to unravel. The tenant is counting on your confusion and inaction to continue living rent-free while hiding behind fake paperwork. Stay strong and protect your business - legitimate tenants don't need to involve fake trusts and improper tax forms to pay their rent.

I'm dealing with something very similar right now and this thread has been incredibly helpful! My tenant is 2 months behind on rent but just handed me some kind of "promissory note" from his "private trust" claiming it will cover all past and future rent payments. He also mentioned he's filing tax forms to "discharge the debt" which now makes perfect sense after reading about these redemption theory scams. What's really concerning me is that he's been asking for my business EIN number saying he needs it to "properly process the trust payment." After reading all these responses, I'm realizing this is probably part of the scheme to file fraudulent tax forms using my information. I'm going to follow the advice here - document everything, report to the IRS with Form 3949-A, and send certified mail notice that I'm aware of the fraudulent activity. It's scary how sophisticated these scams have become, but at least now I know I'm not alone in dealing with this and there are clear steps to take. Thank you especially to those who shared the resources like taxr.ai for understanding the tax implications and claimyr for actually getting through to the IRS. Having concrete tools to handle this situation makes it feel much less overwhelming. For any other landlords reading this - don't ignore weird paperwork or trust documents from tenants. These schemes rely on our confusion and inaction to succeed.

Quick question - I'm using TurboTax and wondering if it can handle Form 3115 for missed depreciation? Their support wasn't clear about it.

I went through this exact same situation with three rental properties I bought between 2020-2022. The stress was overwhelming until I realized how straightforward the fix actually is with Form 3115. A few practical tips that helped me: 1. Calculate your basis correctly - for residential rentals, you can only depreciate the building, not the land. Your purchase contract or property tax assessment should show the land vs building allocation. 2. Remember that depreciation starts when the property is "placed in service" for rental use, not necessarily when you bought it. If you spent time renovating before it was rentable, that affects your start date. 3. The Section 481(a) adjustment on Form 3115 will be substantial (mine was over $35k total), but don't worry - this is exactly what the form is designed for. The IRS expects large catch-up amounts. 4. File Form 3115 with your current year return, not as an amendment to prior years. This is key - it saves you from the hassle and potential issues of multiple amended returns. One last thing - make sure you continue depreciating correctly going forward! The mistake is fixable, but you don't want to repeat it. Good luck!