I'm dealing with a very similar situation right now! Inherited my grandmother's IRA in 2021 and just discovered I've been missing RMDs. Reading through everyone's experiences here has been incredibly helpful. One thing I wanted to add - when I called my IRA custodian (Fidelity), they were actually pretty helpful in calculating what my missed RMDs should have been for each year. They have worksheets and can walk you through the calculations based on your account balance and the IRS life expectancy tables. Also, something to keep in mind - if you're taking multiple years of RMDs all at once in 2024, you might want to consider spreading the withdrawals across a few months rather than taking it all in one lump sum. It won't change the tax implications, but it might help with managing the cash flow and any potential investment timing issues. The penalty waiver route seems to be working for people, especially given all the confusion around the SECURE Act changes. I'm planning to file Form 5329 for each missed year once I take my distributions.

One thing I'd add to all the great advice here is to be careful about the timing of when you take these missed distributions. Since you're taking multiple years' worth of RMDs all at once in 2024, this could potentially push you into a higher tax bracket for the year. You might want to consider doing some basic tax planning first - maybe run the numbers to see if it makes sense to take some distributions in December 2024 and the rest in January 2025 to spread the tax impact across two years. Obviously you want to get compliant as soon as possible, but a few weeks of timing difference could potentially save you significant money if it keeps you out of a higher bracket. Also, don't forget that you can have taxes withheld directly from the IRA distributions to help cover the tax bill. Most custodians can set this up easily when you request the withdrawals. Given that you'll likely owe more taxes than usual this year, having some withheld upfront can help avoid an underpayment penalty. The penalty waiver approach definitely seems to be the way to go based on what others have shared. The IRS has been pretty reasonable about these inherited IRA situations given all the rule changes.

Has anyone used FreeTaxUSA for calculating potential tax brackets? I'm in a similar situation to the OP and trying to figure out if I should do some tax loss harvesting before year end to offset gains.

Great question about the 2025 tax brackets! Just to add some practical context to what others have shared - with your $110k income, you'll definitely be in the 24% marginal bracket for federal taxes. But here's what I'd focus on: 1. **Stock options timing**: If you're planning to exercise stock options, consider spreading it across tax years if possible. A large exercise could push you well into the 24% bracket or even higher. 2. **Max out tax-advantaged accounts**: You can contribute up to $23,500 to your 401k in 2025 (if you're under 50). Every dollar you put in reduces your taxable income dollar-for-dollar. 3. **Don't forget FICA**: Remember that Social Security and Medicare taxes (7.65%) apply to your wages regardless of income tax brackets. The strategies to stay in lower brackets really depend on how close you are to the $100,526 cutoff after your 401k contributions and other deductions. If you're right on the edge, maximizing your HSA contributions (if available) and considering a traditional IRA contribution could help. What state are you in? That'll make a big difference in your total tax picture.

This is a really complex situation that I've been dealing with myself. One thing I'd add to the excellent advice already given is to be extra careful about the timing of when you used the loan proceeds. The IRS follows a "tracing" rule where they look at what you actually spent the money on, not just your intentions. If you deposited the margin loan into your checking account and then made various purchases over time, you'll need to establish which specific expenditures came from the loan proceeds versus your other income. The IRS generally uses a "first in, first out" approach unless you can demonstrate otherwise. Also, for the investment portion, remember that investment interest deductions are limited to your net investment income for the year. If you don't have enough investment income to absorb all the investment interest, you can carry forward the unused portion to future years. I'd strongly recommend consulting with a tax professional who has experience with investment interest allocations. The penalties for getting this wrong can be significant, and the rules are more nuanced than they initially appear.

One thing that hasn't been mentioned yet is the AMT (Alternative Minimum Tax) implications. Investment interest deductions that are allowed for regular tax purposes might be treated differently under AMT calculations. If you're subject to AMT, some of your investment interest deductions could be disallowed or limited further. Also, make sure you're not double-counting any expenses. For example, if you paid property taxes with the loan proceeds, you can't deduct both the property tax payment AND claim the loan interest as deductible - the interest portion used for property taxes would be non-deductible personal interest. Another consideration is state tax implications. Some states don't conform to federal rules for investment interest or home equity interest deductions, so you might need to make adjustments on your state return even if everything is properly handled federally. The allocation method you choose needs to be reasonable and consistently applied. Whatever approach you use for dividing the interest expense, document your methodology thoroughly in case you need to defend it later. The IRS appreciates clear, logical allocation methods backed by solid documentation.

As someone who's been through this exact same confusion with partnership rental properties, I completely feel your pain! The good news is that you're asking the right questions and your understanding is actually pretty solid. To directly answer your depreciation question: Yes, the depreciation for the rental property itself should absolutely go on Form 8825, not directly on Form 1065. Your previous accountant may have made an error there, but as others have mentioned, if the depreciation still flowed through to the K-1s correctly, it's probably not worth amending unless there were other issues. One thing I learned the hard way is to keep meticulous records separating your "property management business" expenses (which go on 1065) from your "rental property" expenses (which go on 8825). Things like: - 1065: Office supplies, computers, software for managing properties, vehicle expenses for property management activities - 8825: Property taxes, insurance, repairs/maintenance, utilities, and yes - property depreciation The key insight that helped me was thinking of Form 8825 as essentially a "rental property Schedule E" that attaches to your partnership return. All the same types of expenses you'd put on Schedule E for personal rental property go on 8825 for partnership-owned rental property. Also, make sure you're calculating your depreciation correctly - if you converted a personal residence to rental property, you need to use the lesser of your original cost basis or fair market value at the time of conversion. That's another common mistake I see with partnership rental properties. Good luck with your filing!

This thread has been incredibly helpful! I'm dealing with a very similar situation with my multi-member LLC that owns rental properties. One additional consideration I'd like to add: if your partnership is making the Section 754 election, it can significantly impact how depreciation is calculated and reported on Form 8825, especially when partners change their ownership percentages or when new partners are admitted. The Section 754 election allows the partnership to adjust the basis of partnership property when there are transfers of partnership interests or distributions. This can affect the depreciation amounts that flow through to individual partners on their K-1s. If you're not familiar with this election, it's worth discussing with your tax professional, especially if you anticipate any changes in partnership structure. Also, regarding the multi-state issues mentioned earlier - I found that the Federation of Tax Administrators website has a good state-by-state breakdown of partnership filing requirements. Each state's Department of Revenue website also typically has specific guidance for multi-state partnerships. For those considering the AI tax services or IRS callback services mentioned above, I'd also recommend checking if your state has similar callback services. Some states have implemented their own versions for state tax questions, which can be just as valuable as getting federal guidance. Thanks everyone for sharing your experiences - this is exactly the kind of practical guidance that's hard to find elsewhere!

Just to clarify a small detail in your timeline - you mentioned buying Bitcoin in 2021 and selling last month. Since we're in early 2025, that would actually be about 3-4 years of holding, making this definitely a long-term capital loss (which is good for tax purposes as Andre mentioned). For your specific situation with the ~$30 loss, you absolutely don't need to wait for the 1099-B to file your taxes. CashApp likely won't send one anyway since your sale amount was under $1,000. You can find your transaction history in the CashApp app under "Activity" - screenshot or download those records showing your purchase date, purchase amount, sale date, and sale amount. That's all you need for Form 8949 and Schedule D. Since this is a loss, it will actually help reduce your tax liability, so there's no reason to delay filing. The $30 loss might seem small, but every deduction counts toward your refund!

Just wanted to add my experience for anyone else in a similar situation. I had almost the exact same scenario last year - bought Bitcoin through CashApp in 2021 and sold at a small loss in 2024. Never received a 1099-B from them, but I went ahead and filed using my transaction records from the app. The key thing I learned is that you can actually download a CSV file of all your Bitcoin transactions directly from CashApp. Go to your profile, then "Privacy & Security," then "Download My Data." It takes a day or two to process, but you get a comprehensive file with all transaction details including dates, amounts, and fees. This makes filling out Form 8949 much easier than trying to screenshot individual transactions. Also, don't forget to include any fees CashApp charged in your cost basis - those small transaction fees can add up and increase your deductible loss. In my case, the fees actually made my loss about $15 higher than I initially calculated, which helped a bit more with the tax offset. The IRS accepted my return without any issues, and I got my refund on schedule. So definitely don't wait around for forms that probably aren't coming!