Great question about contingent beneficiaries! You can absolutely set different percentage splits for contingent beneficiaries compared to primary ones. Most IRA custodians allow quite a bit of flexibility here. For example, you could have yourself as 100% primary beneficiary, but then name multiple contingent beneficiaries (like siblings, nieces/nephews, or charities) with whatever percentage splits make sense for your mom's wishes. Regarding the 2026 exemption cliff and state taxes - you're right to wonder about this. State estate tax exemptions are generally set independently of federal levels, though some states do tie their exemptions to the federal amount. Most states with their own estate taxes have maintained consistent exemption levels regardless of federal changes. So while the federal cliff might not directly impact state planning, it's still worth reviewing both periodically. One more thing to consider: if your mom's assets continue to appreciate significantly over the next few years, the 2026 exemption reduction could become more relevant. Real estate and investment growth between now and then might push some estates closer to the new lower thresholds than people expect.

This thread has been incredibly helpful! I just wanted to add one more consideration that came up when I was dealing with my grandmother's estate - make sure your mom has all her account information organized and accessible to you as the beneficiary. I discovered after the fact that she had IRA accounts at three different institutions, and tracking them all down was a real headache. Consider creating a simple document that lists all her retirement accounts, account numbers, contact information for each custodian, and where she keeps important paperwork. Also, some IRA custodians have different policies about how quickly beneficiaries need to start taking distributions after inheritance, even within the 10-year rule framework. Having that information organized ahead of time can save a lot of stress during an already difficult period. It's one of those practical details that gets overlooked in all the tax planning discussions but can make a huge difference when the time comes.

11 Another thing to consider with 1098-T: if your child is claimed as your dependent, make sure you're coordinating who claims education credits. If you claim your child as a dependent, they can't claim their own education credits (like American Opportunity Credit) - YOU would claim those on your return, not theirs.

22 Don't forget about state filing requirements! Even if your child doesn't need to file a federal return, some states have lower thresholds for filing requirements. I learned this the hard way when my son got a letter from our state tax department asking where his return was, even though he was under the federal threshold.

Has anyone dealt with reporting this excess scholarship income when the student has no way to pay the taxes? My daughter's in this exact situation - scholarship exceeds tuition by $7200, but that money went directly to her housing which is already spent. She has no income or savings to pay the tax bill. Does she need to make estimated tax payments during the year?

This is such a common confusion for families! One thing that might help clarify the situation is understanding that even though your son is your dependent, the IRS views scholarship income as belonging to the student who received it, not the parents. This is different from other types of investment income that might be reported on the parent's return under certain circumstances. For the $6,800 excess, your son will need to file Form 1040 and report this amount on Line 1a as wages (with "SCH" written next to it to indicate scholarship income). Make sure to keep good records of what the scholarship was used for - the IRS may want documentation showing which expenses were qualified vs. non-qualified. Also, don't forget to check if your son might owe estimated taxes for next year if this scholarship pattern continues. Since there's no withholding on scholarship money like there is with regular wages, he might need to make quarterly payments to avoid underpayment penalties.

This is such a helpful thread! I'm dealing with the exact same confusion for my consulting business. What really clicked for me reading through all these responses is that Section 179 is essentially about WHEN you get the tax benefit, not IF you get it. One thing I'm still wondering about though - does the vehicle financing interest rate play into this decision at all? Like if I can get 0% financing on the truck, does that change whether Section 179 makes sense versus regular depreciation? It seems like the cash flow benefit of Section 179 would be even bigger if I'm not paying interest on the loan. Also really appreciate the mentions of tracking business use percentage - I definitely need to get better about that regardless of which deduction method I choose!

One aspect that hasn't been covered much here is the income limitation for Section 179. There's an annual limit on how much you can deduct (for 2024 it's $1.22 million) and it starts phasing out if you purchase more than $3.05 million in qualifying property during the year. But more importantly for most small business owners, you can't deduct more than your business's taxable income for the year. So if your business only made $30,000 in profit this year, you can't take a $45,000 Section 179 deduction on a truck - you'd be limited to the $30,000 and would have to carry forward the rest. This is where regular depreciation might actually be better for newer or smaller businesses that don't have large profits yet. With depreciation, you spread the deduction over time, which might align better with your income growth. Just something to consider when running those cash flow calculations everyone's been talking about!

This is actually a really common misunderstanding about wash sales. What matters isn't the lot numbers but the timing. Whenever you have a loss sale with a purchase of substantially identical securities within the 61-day window (30 days before/after), you have a potential wash sale. I had this exact situation last year with NVDA stock - sold some at a loss and had other shares purchased within the window. My accountant explained that the way the IRS applies the rule, you look at all purchases of the same security within the window, regardless of lot designation.

This is exactly the kind of complex wash sale scenario that trips up so many taxpayers! Based on your description, you're dealing with a partial wash sale situation. Here's what's happening: You sold 140 shares at a loss, but you only have 60 remaining shares from Lot 2 that were purchased within the wash sale window. The wash sale rule will apply, but only to the extent of the shares you still hold - so 60 shares worth of your loss will be disallowed and added to the cost basis of those remaining 60 shares. The math works out like this: - Loss on 60 shares: $1,800 (60 × $30) - this gets disallowed and added to basis - Loss on remaining 80 shares: $2,400 (80 × $30) - this should be deductible Your remaining 60 shares would have an adjusted basis of $125/share ($75 original + $30 disallowed loss per share). Make sure to double-check your 1099-B when it arrives - brokers sometimes miss these nuanced partial wash sale calculations, especially with same-day transactions. You may need to make adjustments on Form 8949 if your broker doesn't report it correctly. Keep detailed records of your calculation method in case the IRS has questions later!