I'm going through something very similar with my late spouse's final return - it's been 8 months now and I'm at my wit's end. This thread has been incredibly eye-opening about resources I didn't know existed. One thing I wanted to add that might help others: when I finally got through to someone knowledgeable at the IRS, they mentioned that deceased taxpayer returns often get additional scrutiny if there are any discrepancies with third-party reporting (W-2s, 1099s, etc.). In my case, my spouse's former employer issued a corrected W-2 after the original filing, which apparently flagged the return for manual review. The specialist told me that these manual reviews are taking 8-12 months right now due to staffing shortages in their deceased taxpayer department. She also mentioned that many delays happen because required forms like the 1310 (claiming refund for deceased taxpayer) have small errors that cause the entire return to be rejected back to manual processing. I'm definitely going to try the congressional representative route based on all the success stories here. It's maddening that you have to become a detective just to figure out why your return is stuck, but having this roadmap gives me hope after months of feeling completely helpless. Thank you to everyone who shared their experiences - this is invaluable information that should honestly be provided by the IRS upfront instead of making people suffer through months of generic responses.

I'm really sorry you're going through this frustrating situation. After reading through everyone's experiences here, I'm dealing with something similar with my uncle's estate - it's been 6 months now and I feel like I've been banging my head against a wall. What strikes me most about this thread is how many people found success once they got connected to the right departments and had specific information about what was actually wrong. The pattern seems to be: regular IRS customer service gives you generic "wait longer" responses, but the specialized Deceased Taxpayer Unit can actually tell you what's causing the delay. I'm definitely going to try calling the executor hotline (866-699-4083) tomorrow and specifically ask for the Deceased Taxpayer Unit. I had no idea this existed - I've been calling the regular number and getting nowhere for months. The congressional representative approach also sounds promising based on all the success stories here. It's frustrating that we have to become experts in IRS bureaucracy just to get basic service, but at least now there's a clear roadmap thanks to everyone sharing their experiences. One thing I'm wondering - for those who got resolution through their congressional rep, how long did it typically take from your initial contact to getting actual movement on your case? I want to set realistic expectations as I go into this process. Thank you to everyone who shared detailed experiences. This thread should honestly be stickied as a resource guide for anyone dealing with deceased taxpayer returns!

Ive seen this happen alot lately. The IRS is backed up worse than ever this year smh

That message is totally normal! It just means your return has moved from the initial received stage into actual processing. The bars on WMR often disappear when this happens - it's not a sign of any problems. Processing times can vary a lot this year, but most returns are getting processed within 21 days. Just keep checking periodically and you should see it update to approved soon!

A few people have mentioned the "step-up in basis" at death, and that's honestly the most important part of this whole strategy for the ultra-wealthy. Here's a simple example: Imagine a founder with $100 million in stock with a cost basis of $1 million. Option 1: Sell stock, pay ~24% capital gains tax (~$24 million), invest remaining $76 million Option 2: Borrow against stock at 4-5% interest, invest the borrowed money, never sell the stock In option 2, when they die, their heirs receive the stock with a stepped-up basis to current market value. They can sell immediately and pay ZERO capital gains tax on all that appreciation. This is why it's called "Buy, Borrow, Die" - the tax bill literally disappears at death!

This whole discussion is fascinating but I think there's one crucial aspect we haven't fully addressed - the psychological and behavioral benefits of this strategy beyond just the math. When wealthy individuals use the "buy, borrow, die" approach, they're essentially forcing themselves to maintain a long-term investment mindset. If you know you can access liquidity through borrowing rather than selling, you're much less likely to panic-sell during market downturns or make emotional investment decisions. Think about it - how many regular investors sell their winners too early because they need cash? Or sell at the worst possible time during a market crash because they need liquidity? This strategy eliminates that temptation entirely. Plus, there's a compounding effect beyond just the tax savings. When you maintain your full position in appreciating assets while still having access to capital, you benefit from the full upside of market growth. Over decades, this behavioral advantage might be just as valuable as the tax optimization itself. It's not just a tax strategy - it's essentially a forced discipline mechanism that keeps you invested during both good times and bad.

As someone who's been freelancing for about 4 years now, I want to emphasize something that really helped me early on: open a separate business checking account and savings account specifically for your freelance work. When that $3,800 payment comes in, immediately transfer about 30-35% to your tax savings account and don't touch it until tax time. I also recommend getting a business credit card for all your freelance expenses - makes tracking deductions so much easier at year end. And definitely keep digital copies of all receipts! I use my phone to snap photos of paper receipts and store them in a dedicated folder in Google Drive organized by month. One last tip: consider making your first estimated tax payment even if you're not sure you'll owe $1,000+ for the year. It's better to overpay slightly and get a refund than to underpay and face penalties. The IRS is much more forgiving if you overpay than if you underpay!

Great advice everyone! As someone who just went through my first year as a freelancer, I want to add one more thing that really helped me - keep a simple monthly income tracker. I created a basic spreadsheet where I log each payment as it comes in, what percentage I moved to taxes, and any major expenses for that month. This helped me in two ways: first, it made it super easy to calculate my quarterly estimated payments because I could see exactly how much I'd earned each quarter. Second, it helped me spot patterns in my income so I could better plan for slow months (which definitely happen in freelancing!). For your $3,800 project, I'd recommend setting aside $1,200-1,300 for taxes right when you get paid. It might seem like a lot, but trust me - you'll be so grateful you did when tax season rolls around. And if you end up overpaying, getting a refund is way better than owing money you don't have! Also, don't be afraid to ask other freelancers in your field about their tax strategies. Most of us have been where you are and are happy to share what we've learned. The freelancing community is generally pretty supportive once you get connected with the right people.

I'm dealing with a somewhat similar situation and wanted to share a perspective that might help with the mortgage aspect. When I went through underwriting last year after taking Section 179 depreciation, my loan officer suggested providing what she called a "business income normalization worksheet." This document showed my average business income over 3-5 years, then explained how the depreciation and recapture were timing differences that didn't reflect my actual earning capacity. We included the depreciation benefit I received in 2022 and the recapture I'd pay in 2023, essentially showing the net effect was much smaller than either number alone suggested. What really helped was demonstrating that my business cash flow remained strong throughout - the depreciation was a tax strategy, not a reflection of business performance. I provided bank statements showing consistent business deposits and highlighted that the vehicle sale actually improved our cash position. The underwriter appreciated seeing that we understood the tax implications upfront rather than being surprised by them. They ultimately approved the loan using an average income calculation that smoothed out the depreciation timing difference. One thing I'd recommend is getting pre-qualified with multiple lenders before you find a house. This gives you time to explain your situation without the pressure of a purchase contract deadline, and you can see which lenders are most comfortable with your scenario before you're committed to working with them.

I'm in a very similar situation and this thread has been incredibly helpful! I took Section 179 depreciation on business equipment in 2022 and am now facing the recapture consequences after selling in 2023. One thing I learned from my tax attorney that might be relevant - if you're married filing jointly, the recapture income gets added to your combined income, which could potentially push you into a higher tax bracket than you were expecting. Make sure to run the numbers on your total household income when calculating the tax impact. Also, for the mortgage situation, I found that providing a simple one-page summary helped a lot. It showed: (1) Normal business income 2020-2021, (2) 2022 income with depreciation benefit, (3) 2023 projected income with recapture, and (4) 2024+ projected normalized income. This timeline format made it really clear to lenders that this was a temporary timing issue, not a fundamental change in our earning capacity. The key is being proactive about the narrative rather than letting lenders draw their own conclusions from the numbers alone.