Your CPA is partially right but didn't give you the whole picture. Look into "special allocations" in partnerships. Section 704(b) of the tax code allows partnerships to allocate tax items differently than ownership percentages IF the allocation has "substantial economic effect." Maybe consider amending your operating agreement to formally recognize your sweat equity as equivalent to your partner's cash contributions? You could also adjust the agreement to get a larger share of future profits to compensate for not being able to use the losses now. And definitely get a second opinion from a different CPA! Not all accountants specialize in partnership taxation.

This is a frustrating but common situation in service-based partnerships. Your CPA is correct about the basis limitation - you need basis to deduct losses, and sweat equity unfortunately doesn't count under IRS rules. However, I notice from the thread that you mentioned having a $15,000 business loan that you're both named on. This is key! If you're personally liable for that debt (not just as an LLC member), your 50% share ($7,500) would give you basis to claim some of your allocated losses. Here's what I'd recommend: 1. Verify if you're personally liable for that loan - check if you signed personal guarantees 2. Get a second CPA opinion, preferably someone who specializes in partnership taxation 3. Review your operating agreement to see if it addresses loss allocations and partner liabilities 4. Consider if there are other partnership debts you might be liable for The suspended losses aren't lost forever - they'll carry forward until you have sufficient basis. And if you do have basis from the loan, you could potentially claim $7,500 of your allocated losses this year. Don't just take one CPA's word on this - partnership taxation is complex and many generalist accountants don't deal with it regularly.

Is your FreeTaxUSA account set up correctly for your financial situation? I initially had the same issue where it wasn't prompting me for ISO information, but then realized I needed to indicate I had stock option income in the initial questionnaire. When I went back and changed that setting, it opened up additional inputs. Try going back to the beginning questionnaire in FreeTaxUSA and look for anything related to stock options, employee stock purchase plans, or investment income. Sometimes checking those boxes will reveal additional input screens.

I've dealt with this exact scenario multiple times as a tax preparer. Here's what you need to know about FreeTaxUSA and ISO reporting: For your $2,300 spread, you're likely correct that your AMT will be $0 due to the exemption amounts for 2024 ($85,700 for single filers, $133,300 for married filing jointly). However, you still need to properly report the ISO adjustment. In FreeTaxUSA, the ISO spread should be entered under the "Federal" section → "Deductions & Credits" → "Other Taxes" → look for "Alternative Minimum Tax (AMT)" subsection. If you don't see this initially, make sure you've indicated stock option activity in the interview questions as others mentioned. The key point everyone seems to be missing: even if your current AMT is $0, you're creating an AMT credit that carries forward. This credit becomes valuable when you eventually sell the ISO shares, as it reduces your regular tax liability dollar-for-dollar up to the amount of AMT you would have paid. For record-keeping, maintain detailed records of: - Exercise date and number of shares - Exercise price per share - Fair market value on exercise date - AMT adjustment amount ($2,300 in your case) - Any AMT paid (likely $0 for you) This information is crucial for calculating your adjusted cost basis when you sell, which affects whether the sale generates ordinary income or capital gains treatment.

Oh my goodness, I remember the EXACT feeling of waiting for my Navy Federal deposit last year! I was checking my phone every 15 minutes like it was going to change something! 😫 For what it's worth, my deposit hit my account at 12:03am on my DDD date - not a minute before. Navy Federal is super reliable for making funds available right at midnight, but they rarely show pending status for tax refunds. If you're really anxious (I totally get it!), set an alarm for midnight and check then. I bet you'll see your money! 💰

I totally understand the anticipation! I'm new to Navy Federal but have been through this waiting game with other banks. From what I'm reading here, it sounds like Navy Federal is pretty consistent about not showing pending status for tax refunds - they just make the money available right at midnight on your DDD. That's actually kind of nice because you don't have to stress about whether "pending" means it's really coming or not! I'm bookmarking this thread because I'll probably be in the same boat next year. Good luck tomorrow - sounds like you'll wake up to some good news! 🤞

Just to add to what others have said - I think the gift tax limit for 2024 is $18,000 per person. So if both your parents are gifting you money, they could each give you up to $18k (total $36k) without having to file gift tax returns. Even if they go over that amount, they just need to report it - they probably won't owe any actual tax unless they've given millions over their lifetime.

This is such a common issue now with payment apps issuing 1099-Ks! I had a similar situation with Venmo last year. The key thing to remember is that receiving a 1099-K doesn't automatically make the money taxable income - it's just a reporting requirement for the payment processor. Since these were gifts from your parents for educational expenses, you're absolutely right that they shouldn't be taxed as income to you. Keep any text messages, emails, or other communication that shows these were intended as gifts for school. Also save records showing how you used the money (rent payments, tuition, textbook purchases, etc.). When you file your taxes, you'll need to account for the 1099-K but you can properly categorize the gift portions as non-taxable. Most tax software has gotten better at handling these PayPal/Venmo 1099-K situations since they've become so common. Don't stress too much - you're not the first person to deal with this and the IRS understands that not every payment app transaction is taxable income!

I'm dealing with a very similar situation right now! Filed in mid-March, state payment was withdrawn immediately, but the IRS still hasn't touched my federal payment after 3+ weeks. No fraudulent documents in my case though. What's really frustrating is that my tax software shows the payment as "scheduled" but there's been zero communication from the IRS about any delays or issues. I've been checking my bank account daily expecting to see the withdrawal, but nothing. Based on what others are saying here about the identity theft angle, it sounds like your situation might be more complex than just a normal processing delay. The fraudulent 1099 from Pennsylvania could definitely be the culprit. Even though you didn't include it on your return, the IRS systems probably detected the discrepancy when cross-referencing your SSN. I'd strongly recommend following the advice about filing Form 14039 and setting up that IRS.gov account to check for any flags on your return. Better to be proactive than wait and potentially face bigger issues down the road. Keep us posted on what you find out - I'm curious if my delay is just normal backlog or if there's something else going on with my return too!

I've been following this thread with interest because I experienced something very similar last year. The combination of a delayed IRS payment and potential identity theft issues can be really stressful. Based on what you've described, I'd lean toward the fraudulent Pennsylvania 1099 being the main culprit behind your payment delay. Even though you didn't include it on your return, the IRS likely flagged your account when their systems detected that someone attempted to file using your SSN in another state. Here's what I'd recommend doing immediately: 1) Set up that IRS.gov account to check your transcript and account status 2) File Form 14039 (Identity Theft Affidavit) as others have mentioned 3) Keep detailed records of everything - the fraudulent 1099, your police report, correspondence with Pennsylvania's fraud department 4) Consider placing a credit freeze with all three bureaus as an extra precaution The good news is that since you filed on time and have confirmation of your payment authorization, you won't face any penalties even if the withdrawal is significantly delayed. The IRS is required to honor the original payment date you scheduled. That said, don't just wait indefinitely. If it's been more than 4-5 weeks total, I'd definitely try to get through to them by phone. The identity theft situation needs to be resolved properly to prevent future filing complications.