Somewhat related question - I have a property that I've been trying to rent out, but haven't found tenants yet. It's been vacant all year while listed for rent. Should I still be filling out Schedule E for this year even though I've had zero rental days and zero income?

Your CPA is absolutely correct to include Schedule E even with zero rental days! This is actually a common misconception that trips up many rental property owners. The key point is that Schedule E is required when you hold a property for rental purposes, not just when you have actual rental income. Since your property was previously a rental and you owned it during part of 2024 (even though it was vacant and under contract), it maintained its rental property status for tax purposes. Here's what you can still report on Schedule E even with $0 rental income: - Property taxes paid during the ownership period - Mortgage interest (if any) - Insurance premiums - Maintenance and repairs - Property management fees - Depreciation for the months you owned it - Other ordinary and necessary expenses related to holding the property This creates a proper paper trail showing the property's transition from rental to sold status, and ensures you're capturing all legitimate deductions during your ownership period. It also sets up the proper classification for when the sale gets reported (likely on Form 4797 as business property rather than Schedule D as personal property). Don't ask your CPA to remove it - she's following the correct tax treatment for your situation!

This is a great discussion and I'm learning a lot from everyone's experiences. I'm in a similar situation with my partner - we each have S Corps that jointly own an LLC, and we've been going back and forth on the wage structure. Based on what I'm reading here, it sounds like the key factors are: 1) where the actual work is being performed, 2) maintaining legitimate business substance at the S Corp level, and 3) proper documentation of the arrangement. For those who've restructured to pay wages from the S Corps instead of the LLC - did you find that your overall tax burden changed significantly? I'm wondering if there are any practical differences in terms of payroll taxes or other costs when wages flow through the S Corps versus directly from the LLC. Also, for the management services agreements that were mentioned - are these typically percentage-based fees or fixed amounts? Trying to figure out how to structure reasonable compensation for management services provided by our S Corps to the LLC.

This thread has been incredibly helpful - I'm dealing with the exact same structure and have been getting conflicting advice from different professionals. One thing I wanted to add based on my recent experience: make sure you're also considering state-level implications. We're incorporated in Delaware but operate primarily in Texas, and the state tax treatment of our S Corp/LLC arrangement is different than the federal treatment. Texas doesn't recognize S Corp elections, so we had to structure things differently at the state level. Also, regarding the reasonable compensation discussion - we found that documenting actual hours spent on management activities was crucial. Our CPA recommended keeping detailed logs of strategic meetings, client relationship management, operational decisions, etc. It sounds like overkill, but if the IRS ever questions whether your S Corp is providing legitimate management services worth the compensation, having contemporaneous records of actual work performed makes all the difference. For anyone considering this structure, I'd strongly recommend getting both legal and tax advice before implementing. The setup costs are worth it to avoid potential compliance issues down the road.

Has anyone successfully claimed AOTC after switching majors? I initially did 2 years of engineering but then switched to business and basically had to start over. Would I get 4 years total or 4 years per degree program?

I went through this exact same confusion last year! The key thing to understand is that "four years of postsecondary education" for AOTC purposes is measured by academic credit hours, not calendar years. Here's what helped me figure it out: I contacted my school's financial aid office (not just the registrar) and asked them specifically about AOTC eligibility. They were able to pull up my record and tell me exactly how many "academic years" worth of credit I had completed based on their full-time equivalency. In your case, if you've been going part-time for several calendar years but haven't accumulated four full academic years worth of credits before 2016, you should still be eligible. Most schools consider 24-30 credit hours to be one academic year, so do the math based on your transcript. One thing that surprised me: even credits from community college or courses that didn't count toward my current major still counted toward the four-year limit. So make sure you're accounting for ALL college-level courses you've taken, not just ones at your current school or in your current program. The financial aid office should be able to give you a definitive answer since they deal with these calculations regularly for various aid programs.

Congratulations on the big win! You're absolutely right to report this properly. Here's what you need to do: Report the $24,000 net gambling profit as "Other Income" on Schedule 1 (Form 1040), line 8b. Write "Gambling winnings" in the description. The fact that DraftKings didn't issue a W-2G doesn't matter - you're still legally required to report all gambling income. For your losses, you can deduct them on Schedule A up to the amount of your winnings, but this means you'll need to itemize instead of taking the standard deduction. Run the numbers to see if itemizing makes sense for your situation. Documentation is crucial since you don't have official tax forms. Keep screenshots of your DraftKings account history, bank statements showing deposits/withdrawals, and create a detailed gambling log with dates, amounts, and outcomes for each session. The IRS does audit gambling income, especially large amounts without corresponding tax forms. One important point: even without sending you a W-2G, DraftKings likely reports high-volume accounts to the IRS through other compliance mechanisms. With $29k in winnings, your account activity probably triggered internal reporting requirements, so the IRS may already have some record of your gambling activity. Better to report everything accurately than risk penalties later.

Just wanted to chime in as someone who went through a similar situation last year. You're definitely doing the right thing by reporting this - I made the mistake of initially thinking I could "wait and see" if the IRS noticed, but after doing more research I realized that was a terrible idea. One thing I learned that might help you: even though you didn't get a W-2G from DraftKings, they likely have detailed records of your account activity that could be shared with the IRS if requested. Online gambling platforms are subject to various reporting requirements, especially for accounts with significant activity like yours. I'd also recommend keeping a spreadsheet or log of all your gambling activities going forward - dates, sites, amounts wagered, wins/losses, etc. It makes tax time so much easier and gives you solid documentation if you ever face questions from the IRS. For this year's filing, definitely report the full $24k net profit on Schedule 1. Whether itemizing to deduct your losses makes sense depends on your other deductions, but at least you'll have reported the income correctly. Good luck with everything!

Don't forget about foreign stocks if your dad had any! My mother inherited some Canadian company stocks from my father, and there were special rules about foreign securities that almost caused us to miss out on significant tax advantages. The step-up basis applies, but there can be currency conversion considerations too. The broker should be handling this, but it's worth specifically asking how they're determining the stepped-up basis for any foreign investments. In our case, they initially only adjusted for the stock price change but missed the currency fluctuation component.

I'm sorry for your loss, Aisha. Going through this process while grieving is incredibly difficult, and I can relate to feeling overwhelmed by all the financial details. One thing I haven't seen mentioned yet is the importance of getting multiple copies of the death certificate from the funeral home or vital records office. Each brokerage will likely want an original or certified copy, and if your father had accounts at several firms, you'll need quite a few. I learned this the hard way when we had to wait weeks for additional copies while the estate settlement was delayed. Also, keep detailed records of everything - dates you contacted each brokerage, names of representatives you spoke with, and any reference numbers they give you. Some brokerages are much faster at processing these requests than others, and having good documentation helps if you need to follow up or if there are any discrepancies later. The step-up basis will definitely help reduce future tax burdens when your mom eventually sells any of these investments, so it's worth taking the time to get it done properly. Wishing you and your family the best as you navigate this difficult time.