This is a great question that highlights how complex RSU taxation can be! As someone who's navigated similar confusion, I think the key insight from the discussion so far is that wash sale rules only apply to losses, not gains. But here's another angle to consider - even if your sale was at a loss, RSU vests can sometimes avoid triggering wash sales due to the "compensation vs. purchase" distinction that Sean mentioned. The IRS has generally treated RSU vests as compensation events rather than voluntary stock purchases. That said, I've noticed some brokerages are becoming more conservative in their wash sale reporting, especially with company stock transactions. They might flag potential wash sales even in borderline cases to avoid underreporting issues. For future reference, it's worth tracking not just the timing but also the exact share lots and cost basis of your RSU sales versus vests. Sometimes what looks like a wash sale on the surface doesn't actually meet all the technical requirements when you dig into the details.

Great question about fractional shares and brokerage differences! In my experience, the wash sale rule applies based on the number of shares involved, not necessarily requiring exact quantity matches. If you sold 50 shares at a loss and then vest 100 shares within 30 days, the wash sale would typically apply to 50 shares (the lesser amount). For fractional shares specifically, most brokerages will round to determine wash sale applicability, but the exact methodology can vary. Some use a "substantially all" standard where small fractional differences don't prevent wash sale treatment. Regarding brokerage differences - absolutely! I've seen significant variations in how different platforms handle RSU wash sale reporting. Fidelity tends to be more conservative and flags borderline cases, while E*Trade (now Morgan Stanley) sometimes misses cross-account wash sales entirely. Schwab falls somewhere in the middle. My recommendation is definitely to do your own calculations and not rely solely on 1099-B reporting. I keep a spreadsheet tracking all my company stock transactions with dates, quantities, and cost basis. When tax time comes, I compare my analysis to what the brokerage reports and make adjustments on my return if needed. The IRS ultimately cares about the correct tax treatment, not what your brokerage happened to report.

As a newcomer to this community, I wanted to add my perspective after reading through this excellent discussion. The advice here is overwhelmingly consistent and well-reasoned - your instincts are absolutely correct about questioning this approach. What really stands out to me is how the practical realities of your situation (no access to accounts, can't contact tenants, deed still in deceased's name) perfectly align with the tax law requirements. The IRS looks for who has actual legal control and beneficial ownership, not just who will eventually inherit. Your mother-in-law may be trying to help by potentially getting you into a lower tax bracket, but this could backfire significantly if you're audited. The estate should definitely be filing Form 1041 and reporting all rental income there until probate closes and the property is legally transferred to you with a new deed in your name. I'd also echo what others have said about getting that date-of-death appraisal as soon as possible. The stepped-up basis rules could save you substantial money on depreciation deductions going forward, but you need that valuation properly documented. Have that respectful conversation with your mother-in-law about switching to Form 1041 for the estate. Most tax preparers understand once the legal ownership distinction is explained clearly. Your patience now will pay off with both proper compliance and significant tax benefits later!

As a newcomer to this community, I'm incredibly impressed by the depth and quality of advice provided here! This thread has been a masterclass in inherited property taxation during probate. The consensus is absolutely clear: your mother-in-law should be filing Form 1041 for the estate, not including the rental property on your personal Schedule E. The fact that you lack legal control - no access to rental accounts, can't contact tenants, deed still in deceased's name - perfectly demonstrates why you don't have "beneficial ownership" for tax purposes yet. What I found most valuable were the real-world examples from community members who faced similar situations. The story about not being able to communicate with property managers really drove home the practical reality of who actually controls the property right now (the estate, not you). Your instincts to question this approach are spot-on. While your mother-in-law means well, reporting income from property you don't legally control could create serious audit complications. The IRS expects income to be reported by whoever has actual legal authority over the asset. I'd strongly encourage having that conversation about switching to Form 1041 for the estate. Also, definitely get that date-of-death appraisal everyone mentioned - the stepped-up basis benefit could save you thousands in future depreciation calculations once the property is legitimately yours. Better to be patient and compliant now than risk IRS issues later. Your diligence in questioning this will pay off!

I can share some insight from working in tax preparation - the 846 code with 2/26 date means your refund was authorized for release on that date, but paper checks typically take 3-5 business days after that to actually get printed and mailed out. So your check was likely mailed around March 3rd-5th. From there, USPS delivery usually takes another 5-10 business days depending on your location. If you haven't received it by March 12th, I'd start getting concerned. One thing that might help is setting up USPS Informed Delivery if you haven't already - you'll get a preview of your mail each morning so you'll know exactly when that Treasury Department envelope is coming your way.

I've been through this exact situation before! The 846 code with 2/26 date means your refund was processed and authorized for payment on that date. For paper checks, there's usually a 2-3 day delay between the 846 date and when it actually gets mailed out, so your check was probably sent around February 28th or March 1st. From there, USPS typically takes 5-10 business days for delivery. Since it's been over a week now, I'd expect it to arrive any day. If you don't see it by March 10th, definitely start checking with neighbors or consider setting up a payment trace. The waiting is the worst part, but paper checks almost always show up eventually - just takes longer than we'd like!

This thread has been incredibly helpful! As someone who recently converted from sole prop to S-Corp, I was struggling with the same basis tracking confusion. After reading through everyone's experiences and advice, I feel like I finally have a clear path forward. I particularly appreciate the "bank account" analogy from @Chloe Harris - that really clicked for me. Starting with your initial contribution, adding profits as they're earned (not when distributed), and subtracting distributions makes so much more sense when you think of it that way. For anyone else just starting out with this, here's my key takeaway from this discussion: Don't wait to set up your tracking system. Even a simple spreadsheet updated monthly is infinitely better than trying to reconstruct everything at year-end. I'm going to start with the basic format that @Emma Olsen suggested and build from there. One question I still have - for those of you who've been doing this for a while, have you found any red flags or common mistakes that the IRS tends to focus on during audits? I want to make sure I'm not just tracking correctly, but also documenting in a way that would hold up under scrutiny. Thanks again to everyone who shared their experiences. This community is amazing for navigating these complex tax situations!

This has been such an enlightening thread! As someone who's been putting off the sole prop to S-Corp conversion partly because of confusion around basis tracking, you've all convinced me that it's totally manageable with the right approach. The monthly tracking system that several of you have mentioned seems like the gold standard. I love how @Paolo Ricci emphasized using your regular QuickBooks P&L numbers rather than waiting for year-end documents - that makes it feel much less intimidating and more like a natural extension of regular bookkeeping. One thing I'm taking away is that this really isn't as complicated as I initially thought. It's basically just keeping a running tally of what you put in, what the business earns, and what you take out. The "bank account" analogy really drives that home. For @Javier Morales (the original poster) - it sounds like your next step should be sitting down with your conversion documents to establish that initial basis number, then setting up a simple monthly tracking system. Don't let your busy accountant be the bottleneck for understanding something this fundamental to your business operations! Thanks everyone for sharing your real-world experiences. It's so much more valuable than the generic advice you find in most tax guides.

I'm currently going through this exact same situation! Filed my return in mid-February and received my CP05 notice about two weeks ago. The stress is unreal when you're depending on that refund money. What's been helping me cope is creating a little tracking system - I check the "Where's My Refund" tool once per day (trying not to obsess!) and jot down the date and status in a notebook. At least it gives me a sense of doing something productive while I wait. I also called my local Taxpayer Advocate Service office just to understand the process better (not to rush anything, just for peace of mind). The representative explained that CP05 reviews are indeed much more common now and that the vast majority result in the full refund being released once verification is complete. One thing that's given me hope: I've been reading success stories on various tax forums, and it seems like a lot of people get their refunds released before the full 60 days. Some as early as 3-4 weeks into the review process. The waiting is absolutely brutal, but we've got this! Keeping my fingers crossed that both you and everyone else dealing with this gets good news soon. 🤞

I'm going through the exact same thing right now! Got my CP05 notice about 10 days ago after filing in late February, and the anxiety is killing me. Like you, I really need this refund for upcoming expenses and the thought of waiting up to 60 days is stressing me out big time. What's been somewhat comforting is reading all these responses - it seems like most people do end up getting their full refund, just with the delay. I've also been obsessively checking the "Where's My Refund" tool multiple times a day (I know, not healthy!) but I can't help myself. One thing I've noticed from reading other people's experiences is that education credits seem to be a common trigger for these reviews, which makes sense since they involve significant refund amounts. I claimed the American Opportunity Credit for my college expenses, so I'm guessing that might be what flagged mine. The hardest part is just not knowing what specifically triggered the review or how long it will actually take. But based on what others are saying here, it sounds like we just have to be patient and trust the process. Hoping we both get good news soon - this waiting game is brutal when you're counting on the money! 🤞