One thing I haven't seen mentioned yet is that you should also check if your state has any specific rules about scholarship taxation. Some states conform to federal tax treatment, but others have their own rules. For example, some states might not tax scholarship money that the federal government considers taxable income. Also, make sure you understand the timing of when to report this income. Since you received the $16k refund this year, you'll report it as income for this tax year - even if some of it was from scholarships awarded in previous years. The key is when you actually received the money, not when the scholarship was originally awarded. If you're using TurboTax, look for the education section and specifically the "Taxable scholarships and fellowships" area. It should walk you through calculating exactly how much of your total scholarship money was used for qualified vs. non-qualified expenses. Don't just guess at the numbers - use your actual receipts and 1098-T to get it right!

I've been following this thread and want to emphasize something that might get overlooked in all the technical details - keep EXCELLENT records of everything! I learned this lesson when I got randomly selected for an IRS audit two years after filing. Save receipts for every qualified education expense (books, required supplies, lab fees, etc.), keep copies of your scholarship award letters, and document exactly how you used each dollar. Create a simple spreadsheet showing scholarship source, amount, what it was used for, and whether it's taxable or not. The IRS auditor told me that education-related audits are becoming more common because so many students incorrectly report scholarship income. Having organized documentation made my audit quick and painless - I actually got a small refund because I had missed some qualified expenses I could have claimed. Without proper records, you could end up owing back taxes, interest, and penalties even if you filed correctly the first time. Also, don't assume TurboTax or other software will catch everything automatically. Double-check their calculations against the actual IRS Publication 970 (Tax Benefits for Education). I found a mistake in how TurboTax allocated my scholarship money and caught it before filing.

Something nobody's talking about - did you sell the house within a year of inheriting it? If not, make sure you're looking at the long-term capital gains rate for the house sale, which is usually more favorable. And don't forget to adjust your basis for any improvements you made before selling!

Just to add another perspective - if you're worried about documentation for the furniture sales, consider creating a simple spreadsheet now while the details are still fresh in your memory. List each item (or group of similar items), approximate date sold, sale price, and your best estimate of fair market value at inheritance. For regular household furniture that's been used, the fair market value is typically much lower than original purchase price. Think about what someone would reasonably pay for used furniture at a garage sale or on Facebook Marketplace - that's probably close to the stepped-up basis value you inherited. Since you mentioned getting around $3,800 total and it was all regular household items, you almost certainly sold everything at or below the stepped-up basis values, meaning no taxable gains to report. But having that documentation organized will give you peace of mind and be helpful if you ever need to reference it later.

Has anyone here actually upgraded from a normal SUV to one over 6,000 lbs GVWR specifically for the tax advantages? I'm considering trading my Ford Edge (business use about 70%) for a Ford Expedition or similar just to take advantage of the Section 179 expensing and bonus depreciation. Is it worth the extra gas and higher purchase price just for the tax benefits? My CPA says absolutely yes but I'm not convinced.

I've been through this exact situation with my construction business vehicles. The key thing to understand is that the IRS requires you to maintain consistent records of your business use percentage throughout the vehicle's life, not just calculate it once at purchase. For your varying business use percentages (60-70% annually), you need to track this each year because it affects both your annual depreciation deduction and the final disposition calculation. When you traded in that first SUV, if your business use in the final year was different from previous years, the IRS requires you to "true up" the depreciation based on the actual business use over the vehicle's entire life in your hands. The inflated basis on your second SUV ($49K vs $41K) is correct - that's the deferred depreciation recapture from your first vehicle rolled into the new basis under the pre-2018 like-kind exchange rules. You're not losing anything, just spreading the tax impact over a longer period. One crucial point: since you mentioned retiring, be very careful about suddenly dropping business use to zero on a vehicle with remaining basis. The IRS may require you to recapture excess depreciation taken in prior years. Consider gradually reducing business use as you approach retirement rather than an abrupt change. For your GVWR question - the total lifetime deduction is generally the same whether you buy a heavy vehicle or not. The advantage is timing: you can accelerate deductions into earlier tax years when you might be in higher tax brackets, versus spreading them out over the vehicle's depreciation life.

This exact thing happened to me last month! So frustrating. I found out that if you haven't logged in for 90+ days, ID.me automatically flags your account as "inactive" and makes you re-verify for security purposes. It's not just the IRS - this happens with other agencies that use ID.me too. The good news is that if you still have access to the same phone number and email you used originally, the re-verification process is usually much faster than the initial setup. You probably won't need to do the full document upload and video call again - just the MFA verification. Also, pro tip: once you get back in, log in at least once every 60 days to keep your account "active" and avoid this happening again. I set a calendar reminder now because dealing with ID.me customer service is absolutely the worst!

I had this happen to me twice now! The first time I went through the whole re-verification process thinking I had to, but the second time I realized it was actually just a browser issue. Try these steps before doing the full verification again: 1. Clear your browser cache and cookies specifically for irs.gov and id.me 2. Make sure you're not using any ad blockers or privacy extensions that might interfere 3. Try a different browser entirely (I switched from Firefox to Edge and it worked) 4. Check if you're using a VPN - turn it off if you are If none of that works, you might have an account flag like others mentioned. But definitely try the simple fixes first before spending hours on re-verification. The IRS system is just really finicky and sometimes these technical issues masquerade as security problems.

The complexity you're facing with Form 8960 is incredibly common, and you're asking all the right questions. Based on your description of actively managing commercial properties through your LLC, you're in a gray area that requires careful analysis. Here's my take: Your rental activities likely DO qualify as a Section 162 trade or business under the Groetzinger standard (regular, continuous activity with profit motive), especially given your hands-on management approach. However, the passive activity determination is separate and more restrictive. For line 4b adjustments, you can only reduce NIIT for income from trades or businesses that are NOT passive activities. Unless you qualify as a real estate professional (750+ hours annually in real estate activities AND more than half your total working time), your rentals remain passive regardless of your involvement level. The expenses you mentioned (mortgage interest, taxes, repairs) already reduce your Schedule E income before it flows to Form 8960 - they're not additional line 4b adjustments. Your investment advisor fees also don't qualify for line 4b treatment under current rules. My recommendation: Start documenting your time and activities meticulously NOW. Track every hour spent on property management, tenant relations, maintenance coordination, etc. If you can demonstrate you meet the real estate professional thresholds, you could potentially exclude significant rental income from NIIT through line 4b adjustments. Consider consulting with a tax professional who specializes in NIIT and real estate taxation - this area has evolved significantly with recent court cases and the stakes are high enough to justify expert guidance.

The confusion you're experiencing with Form 8960 is completely understandable - this is one of the most complex areas of tax law right now. Let me break down your situation based on what you've described. Your commercial rental properties managed through your single-member LLC likely DO qualify as a Section 162 trade or business under current case law, especially given your hands-on involvement. The Groetzinger standard looks at whether you're engaged in regular, continuous activity with a profit motive - which clearly describes your situation. However, here's the critical distinction that trips up many taxpayers: qualifying as a Section 162 business and being "non-passive" are two separate determinations. For Form 8960 line 4b adjustments, you need BOTH conditions to be met. Unless you can qualify as a real estate professional (750+ hours annually in real estate activities AND it represents more than half your total working time), your rental activities will be treated as passive regardless of how actively you manage them. This is different from the "active participation" standard used for the $25,000 rental loss allowance. Your expenses (mortgage interest, property taxes, maintenance) already reduce your net rental income on Schedule E before it flows to Form 8960 - these aren't separate line 4b adjustments. Similarly, investment advisor fees don't qualify for line 4b treatment under current NIIT regulations. My advice: Start meticulously documenting your real estate activities immediately. Track every hour spent on tenant management, property maintenance coordination, market research, financial analysis, etc. If you can demonstrate you meet the real estate professional thresholds, you could potentially exclude significant rental income from NIIT through line 4b. Given the complexity and potential tax savings involved, consulting with a tax professional who specializes in NIIT and real estate taxation would be a wise investment.