One thing nobody's mentioned - sometimes banks DO get tax breaks from local governments as incentives to build headquarters or operations centers in certain areas. My city gave Bank of America a 50% property tax reduction for 10 years to build their operations center here instead of the neighboring city. Created about 2,000 jobs but definitely a sweetheart deal on the taxes.

Yes, it's completely legal for cities and counties to offer tax incentives to businesses - it's called economic development policy. These Tax Increment Financing (TIF) districts and abatement programs are authorized by state law in most places. The idea is that the jobs and economic activity generated by a major employer like a bank operations center will eventually produce more tax revenue than the city loses from the incentive. That said, I understand the frustration about fairness. Small businesses and homeowners don't have the same negotiating power to demand these deals. Some cities are starting to require "clawback" provisions where companies have to pay back the tax breaks if they don't meet job creation or wage commitments. It's definitely a controversial topic in local government - balancing economic development with tax equity.

As someone who works in banking, I can confirm that backup withholding questions are one of the most common sources of confusion for new account holders! You're definitely not alone in being puzzled by this. The key thing to understand is that backup withholding is essentially the IRS's way of ensuring they get taxes on income that people might otherwise forget to report. It's like a safety net - if they don't trust that you'll properly report interest or dividends on your tax return, they'll have the bank withhold taxes upfront. For someone in your situation - first checking account, no history of tax issues with the IRS - you should answer "No" with confidence. The IRS would have sent you specific written notice (forms like CP2100 or CP2100A) if you were subject to backup withholding. One tip: keep this application and any tax forms the bank gives you in a safe place. As you start earning interest (even small amounts), you'll get a 1099-INT form at the end of the year that you'll need for tax filing. It's all part of the adulting journey - you're doing great by asking these questions upfront rather than guessing!

I'm glad to see so many people helping out with this question! Just wanted to add that when I was in a similar situation, my credit union's customer service was actually really helpful too. If you're still feeling uncertain after reading all these great explanations, don't hesitate to call or visit your credit union and ask them to walk through the form with you. They deal with first-time account holders all the time and are usually very patient about explaining these questions. Most credit unions have a community-focused approach and genuinely want to help their members succeed financially. Sometimes it's nice to have that face-to-face reassurance, especially when you're taking this big step toward financial independence!

Has anyone looked into whether EV charging stations qualify for accelerated depreciation? With all the tax incentives through the Inflation Reduction Act, I was wondering if adding those to a car wash or other business property might give additional tax benefits.

Thanks for all the detailed insights everyone! As someone who's been researching similar investments, I'm curious about the practical side of documenting material participation. @Landon Morgan mentioned keeping detailed logs - what specific activities count toward the hours requirement? For example, if I'm researching potential ATM locations online or reviewing financial statements at home, does that count? Or does it need to be more hands-on involvement like physically visiting sites or meeting with vendors? Also, has anyone dealt with the IRS questioning their material participation claims? I want to make sure I'm building a defensible record from day one rather than scrambling to document everything after the fact. The car wash example is really helpful - 10-12 hours per week seems very manageable while still clearly meeting the 500+ hour threshold. I'm leaning toward that type of business over ATM routes based on the discussion here about purchase price allocation challenges.

For those of you trying to figure out if you're over the Roth IRA contribution limits, remember that the MAGI calculation is different from your AGI! I messed this up too. For Roth IRA purposes, your MAGI is your AGI with certain deductions added back in, like student loan interest, tuition deductions, and some others. That's probably why the OP didn't realize they were over the limit until after reviewing their tax forms. Anyone recommend a good tax software that automatically flags potential Roth IRA contribution issues based on calculated MAGI? My current one didn't catch this.

Your tax preparer is absolutely wrong about this being "immaterial." The IRS doesn't have a materiality threshold for excess Roth IRA contributions - $780 is definitely something you need to address. Here's what you need to know about timing: 1. You have until your tax filing deadline (including extensions) to remove the excess contribution plus any earnings. For 2024 contributions, that's typically October 15, 2025 if you file an extension. 2. If you remove the excess before this deadline, you'll avoid the 6% excise tax that applies each year the excess remains in your account. 3. However, any earnings on the excess contribution must be reported as income on your 2024 tax return (the year you made the contribution), not your 2025 return. I'd strongly recommend contacting your brokerage immediately to initiate an excess contribution removal. They'll calculate the earnings portion using an IRS-approved formula based on your account's performance. You'll then need to either amend your 2024 return if already filed, or include those earnings when you file. Don't let this sit - that 6% penalty compounds annually until resolved, and it's much easier to fix now than later.

I'm surprised nobody has mentioned the potential for basis adjustment due to the "kiddie tax" that might have applied while the shares were in the UGMA account. If the custodial account generated dividends or other income that exceeded certain thresholds while you were a minor, there could be implications for your basis calculation. Also, don't forget to check if there were any return of capital distributions over the years that would have reduced your basis. With shares held this long, it's surprisingly common.

This is exactly the type of complex situation where getting professional help makes sense. Between the original employee stock options, the UGMA transfer, multiple corporate actions (two mergers!), and decades of potential dividend reinvestments, you're dealing with a multi-layered basis calculation that could easily result in overpaying taxes if handled incorrectly. A few additional things to consider that others haven't mentioned: 1. Check if your brokerage has any historical records from when the shares were transferred in 2018. Sometimes they capture basis information from custodial accounts even if it's not immediately visible. 2. Contact the current company's investor relations department - they often maintain historical information about corporate actions, stock splits, and merger terms going back decades. This documentation will be crucial for your basis calculations. 3. If your father still has any old tax returns from around 1992 when he exercised the options, those might show the income he recognized, which would help establish his original basis. 4. Don't overlook state tax implications - some states have different rules for gift basis than federal tax law. Given the potential tax savings involved with shares held for 30+ years, it's probably worth investing in proper documentation and calculation rather than guessing. The IRS is pretty strict about substantiating basis claims, especially on large gains from old securities.