Don't forget to look into cost segregation studies for your rental properties! Even with income limitations, accelerated depreciation on components of your property can still benefit you long-term by increasing those suspended losses that you'll eventually get to use.

The passive activity loss rules can be really frustrating when your income crosses that threshold! One thing that hasn't been mentioned yet is the potential for material participation elections. If you can document significant involvement in your rental activities (not just the real estate professional test, but actual material participation), you might be able to treat some rental income as non-passive. Also, don't overlook the benefits of proper entity structuring. Some rental property owners benefit from holding properties in LLCs or partnerships where the income characterization might be different, though this requires careful planning with a tax professional. The key is to keep meticulous records of everything - time spent, expenses, improvements, etc. Even if you can't use the losses now, they're building up valuable tax benefits for the future. I've seen people with suspended losses from years ago get massive tax savings when they eventually sell their properties or their income situation changes.

I'd suggest also considering the 95-day rule with capital improvements in a 1031 exchange. If you're buying a replacement property, improvements made within 95 days after closing can be considered part of the exchange value. Might not apply to your situation since you're asking about the relinquished property, but worth noting for the complete picture.

Based on my experience with several 1031 exchanges, the consensus here is correct about splitting your $37,000 in expenses. The $26,000 in capital improvements (roof and HVAC) should increase your adjusted basis on Form 8824 line O since they were substantial improvements that add long-term value to the property. The $11,000 in repairs and maintenance should go on line N as exchange expenses since they were incurred after the property ceased being a rental but were necessary to prepare it for sale. One additional consideration: make sure you have detailed receipts and documentation for all these expenses. The IRS scrutinizes 1031 exchanges more closely, and clear documentation of what constitutes capital improvements versus repairs will be crucial if you're ever audited. Also, since you mentioned the property stopped being a rental 2 months ago, confirm with your tax preparer how this timing affects any final depreciation calculations on the property before the exchange.

I've been reading through all these responses and they're really helpful! One thing I wanted to add that might help others in similar situations - if you have a 529 plan through a financial advisor or investment company, they often have tax specialists on staff who can walk through these timing scenarios with you for free. I called Fidelity (my 529 provider) last year when I had a similar question about withdrawal timing, and they were incredibly knowledgeable about the IRS rules. They even helped me understand how the American Opportunity Tax Credit interacted with my 529 withdrawals to make sure I wasn't accidentally creating a tax problem by claiming the same expenses for both benefits. The key thing they emphasized was keeping really detailed records - not just receipts, but also enrollment verification and a simple log showing which expenses you're applying each withdrawal toward. They said most people who run into trouble with the IRS on 529s do so because of poor documentation rather than actually breaking the rules. Since you mentioned your daughter is still in school, definitely look at those current year expenses. Even if the amount isn't as much as what you originally planned to withdraw for 2021, getting some penalty-free withdrawal is better than none!

I've been in a very similar situation and learned some hard lessons about 529 timing rules! Unfortunately, you can't make a penalty-free withdrawal now for 2021 expenses - the IRS is pretty strict about requiring withdrawals to happen in the same tax year as the qualified education expenses. However, if your daughter is still in school, you absolutely can take a withdrawal now and apply it to 2024 qualified expenses instead. This includes tuition, fees, required books and supplies, and even room and board if she's enrolled at least half-time. Don't forget about technology expenses either - computers, required software, and other tech needed for coursework can qualify too. The key is making sure your 2024 withdrawal amount doesn't exceed your actual 2024 qualified expenses. Keep detailed receipts and documentation showing the expenses are from this tax year. I'd also recommend creating a simple spreadsheet tracking each expense and how it relates to your withdrawal - this makes things much clearer if you ever need to provide documentation to the IRS. One more tip - if your daughter is graduating soon or you don't have enough current expenses to cover what you wanted to withdraw, remember that you can change the beneficiary on your 529 account to another family member without any tax consequences. This gives you more flexibility to use the funds penalty-free in the future rather than taking a non-qualified distribution now.

This is exactly what happened to me last week! I received an identical Pay1040 phishing email and was completely panicked until I found this discussion. What's particularly alarming is how they seem to have targeted lists of people who actually used Pay1040 before - my email also referenced "previous tax season usage" which initially made it seem legitimate. I followed all the steps outlined in this thread and discovered the same red flags: suspicious Reply-To domain, HTTP links instead of HTTPS, and subtle formatting differences from real Pay1040 communications. When I logged directly into my actual Pay1040 account, there were zero recent transactions. I've reported the email to all the agencies mentioned (IRS phishing email, IC3, etc.) and placed fraud alerts on my credit reports. What really helped me was the advice about not panicking and taking time to verify everything properly before acting. This thread has become an incredible resource showing how community knowledge-sharing can help protect people from sophisticated scams. It's scary how organized this phishing campaign is, but knowing the warning signs and proper response steps makes all the difference. Thank you to everyone who shared their experiences - you're helping fellow taxpayers stay safe during this vulnerable time!

I just want to echo what everyone else has been saying - this thread has been incredibly valuable! I received the exact same phishing email yesterday and was initially terrified that someone had made unauthorized tax payments using my information. What made it particularly convincing was that I actually did use Pay1040 two years ago, so when the email referenced my "previous tax payment activity," it felt legitimate at first. It's clear these scammers have somehow obtained lists of actual Pay1040 users, which makes their targeting incredibly sophisticated. Following the advice here, I went directly to pay1040.com (typing the URL manually) and confirmed there were no recent transactions on my account. I also examined the email more carefully and found the same red flags others mentioned - the Reply-To address was from a completely different domain, and hovering over the links showed they were redirecting to HTTP sites instead of secure HTTPS. I've already reported the phishing email to all the agencies mentioned in this thread and placed fraud alerts with the credit bureaus. It's disturbing how organized this campaign appears to be, but I'm grateful for this community's collective knowledge in helping identify and respond to these sophisticated scams. For anyone just finding this thread - don't panic if you received a similar email. Take time to verify everything through official channels before taking any action. This discussion proves you're definitely not alone, and there are clear steps you can take to protect yourself!

Just to throw this out there - I know someone who bought an old school bus, renovated it as an office, and successfully deducted it as business equipment with Section 179. The key was they registered it as commercial equipment rather than a passenger vehicle. Might be worth looking into.

This is a fascinating situation! I've been following the discussion and wanted to add that you should also consider the Mixed-Use property rules. Even though you're using the RV 100% for business, the IRS might still view it as having potential personal use capability since it's technically a habitable vehicle. I'd recommend documenting not just your business use, but also any modifications you've made that would make it less suitable for personal/recreational use. For example, if you've removed sleeping facilities, cooking equipment, or made other permanent changes that clearly establish it as office space only, that strengthens your case for business-only classification. Also, keep detailed records of all utilities you're paying for (electricity hookup, internet, etc.) as these ongoing operational costs are definitely deductible business expenses regardless of how you classify the RV itself. Sometimes the ongoing operational deductions can be more valuable than trying to depreciate the asset, especially if there's any uncertainty about the asset classification. The zoning point that Jamal made is crucial too - you want to make sure you're compliant on all fronts before claiming any deductions.