Don't forget to check if your state handles inherited property the same way the IRS does! NY generally follows federal rules, but some states have their own twists on capital gains for inherited property. Just something to double-check.

This is a great question about Section 121 and inherited property! I went through something similar when I inherited my grandmother's house through intestate succession in Pennsylvania. One thing I learned that might be helpful - you should also consider getting a professional appraisal for the property's value at the date of death if you don't already have one. This establishes your stepped-up basis officially and can be crucial if the IRS ever questions your capital gains calculation. In my case, I had lived in the inherited house for 3 years before selling, so I easily qualified for Section 121. But even if I hadn't, the stepped-up basis meant my actual capital gain was much smaller than it would have been if I had purchased the property myself years ago. Also, make sure to keep detailed records of when you moved in and made it your primary residence. The IRS can be pretty strict about proving the 2-year residency requirement, so having utility bills, voter registration changes, and other documentation showing it was your principal residence will be important if you're ever audited.

I've been reading through all these responses and they're incredibly helpful! I'm in a similar situation - making decent money from day trading but locked out of retirement contributions due to the earned income requirement. The educational content route that several people mentioned is really appealing. I've been keeping detailed trading journals and developing some solid strategies for swing trading tech stocks. It sounds like there's real demand for legitimate trading education, and it would let me generate earned income while sharing knowledge I already have. One question for those who've gone this route: how do you balance the time commitment between creating educational content and your actual trading? I'm worried about it cutting into my market research time, especially during volatile periods when I need to be fully focused on my positions. Also, has anyone run into issues with compliance or regulations when offering trading education? I want to make sure I stay on the right side of SEC rules while building a legitimate business that qualifies for IRA contributions. The trader status election also sounds interesting, but honestly the educational approach seems more straightforward and less likely to raise red flags with the IRS. Thanks everyone for sharing your experiences - this thread has given me more clarity than months of research!

I've been following this discussion with great interest as someone who's dealt with this exact frustration. After being locked out of IRA contributions for two years due to only having trading income, I finally found a solution that worked for me. Like many of you mentioned, I went the educational content route and it's been incredibly effective. I started by creating a simple course on risk management for options traders (something I wish I'd learned earlier in my trading journey). What surprised me was how much demand there was for practical, real-world trading education from someone who's actually making consistent profits. The key thing I learned is that you don't need to be a guru or have millions in profits to provide value. People want to learn from traders who are consistently profitable and can explain their strategies clearly. I generated about $9,500 in earned income last year from educational content, which allowed me to max out my IRA contribution for the first time in years. A few practical tips for anyone considering this path: - Start with what you know best. If you're successful with covered calls, teach that. If you've mastered risk management, focus there. - Keep detailed business records from day one. Time spent, expenses, client interactions - all of it matters for establishing this as legitimate earned income. - You don't need fancy production. Some of my best-selling content is just screen recordings of me explaining trades with simple PowerPoint slides. The time commitment is manageable - I probably spend 8-10 hours per week on educational content, and it hasn't hurt my trading performance. If anything, explaining my strategies to others has made me more disciplined in following them myself. Happy to answer any specific questions about getting started with this approach!

I feel your pain - went through this exact same thing last year! My verification letter took 21 days to arrive, so you're definitely still within the normal range even though it's frustrating. A couple things that might help while you wait: - Try calling early in the morning (8-9 AM) when call volumes are lower - sometimes you can get better info about whether your letter was actually mailed - Make sure your mailbox is secure and check with neighbors in case it got misdelivered - If you're in a rush, definitely try that in-person appointment suggestion someone mentioned above - I wish I had known about that option! The waiting is absolutely the worst part, but once you get that letter the actual verification process is pretty quick. You should have your refund within 1-2 weeks after completing it. Keep checking your mail - it'll come!

I'm currently going through this same exact situation! Filed my return 3 weeks ago, tried the online ID verification multiple times but it kept failing, so I called and they told me to wait for the verification letter. It's been 12 days now and still nothing in my mailbox. What's really frustrating is that every time I call, I get a different agent who gives me slightly different information. One said 14-16 days, another said "up to 21 business days," and the last one couldn't even confirm if the letter had been generated yet. The inconsistency is maddening when you're just trying to get your own money back! I'm definitely going to try that in-person appointment suggestion - had no idea that was even an option. Also going to set up that USPS informed delivery thing to at least know what's coming. Thanks everyone for sharing your experiences, it's weirdly comforting to know I'm not alone in this bureaucratic nightmare!

One thing nobody mentioned is that if you don't claim your child as a dependent, they might be eligible for a much bigger stimulus payment or recovery rebate credit (depending on what Congress passes next year). During the pandemic years, my son got $1,800 filing independently that he wouldn't have received if I had claimed him. Worth considering!

This is exactly the kind of analysis every parent with college kids should be doing! You're absolutely right to question whether claiming her makes sense financially for your family as a whole. Based on what you've described, you need to factor in the education tax credits that others have mentioned. The American Opportunity Tax Credit alone could be worth up to $2,500 if your daughter has qualified education expenses, which would completely change your calculation. That $2,500 credit minus the $500 you'd lose by not getting the full Child Tax Credit still puts you way ahead of the $1,000 she'd save filing independently. Also consider that at your income level, you're probably getting more benefit from the education credits than she would filing on her own, since you likely have higher tax liability to offset. The key is running both scenarios with ALL applicable credits and deductions included - not just looking at the Child Tax Credit in isolation. I'd recommend using tax software to model both approaches or consulting with a tax professional who can run the numbers properly. The difference could easily be $1,000+ in either direction depending on your specific situation.

I've been following this thread with great interest since I'm in a nearly identical situation. I receive around $5,000-8,000 annually from relatives in India and Germany through various platforms (PayPal, Wise, sometimes even direct bank transfers). What really helped me get clarity was creating a detailed paper trail from day one. I keep a shared Google Doc with my overseas family where we note the purpose of each transfer before it's sent - whether it's a festival gift, reimbursement for something I bought for them on Amazon, or contribution to a family emergency fund we maintain. This proactive documentation approach has been a game-changer. When my credit union questioned a $2,500 transfer from my grandmother last Diwali, I was able to immediately show them the family WhatsApp conversation discussing the gift, plus our shared tracking document. The inquiry was resolved within 24 hours. One thing I learned that might help others: different countries have very different gift tax rules for the sender. My relatives in Germany face much stricter reporting requirements than my family in India. I now give them a heads up about potential tax implications on their end before they send larger amounts. The peace of mind from having everything documented properly is worth the small effort. Plus, it's actually helped our family stay more organized about financial support and shared expenses across different countries.

I've been lurking on this thread because I'm in almost the exact same boat - receiving regular funds from family overseas through PayPal F&F. The documentation advice everyone's sharing is incredibly valuable. One thing I want to add that saved me a lot of stress: I started taking screenshots of the actual PayPal transaction details page (not just the main transaction list) because it shows the sender's full name, their location, and any notes they included. This extra level of detail really helped when my bank asked questions about a transfer from my aunt in the Philippines. Also, for anyone worried about the $600 reporting threshold - I confirmed with a tax professional that this only applies to goods and services transactions, not legitimate F&F transfers. The key word is "legitimate" though - the IRS can always investigate if they suspect F&F is being used to disguise business income. What really put me at ease was realizing that being proactive about documentation actually protects you. If these are genuine gifts and reimbursements, having clear records only strengthens your position. It's the people trying to hide income who run into trouble, not those who are transparent about legitimate family transactions. Keep those records organized and don't lose sleep over genuine family support - the tax code recognizes the difference between gifts and income, even when they come through digital payment platforms.