Yes, vehicles over 6,000 lbs GVWR qualify for the full Section 179 deduction (up to the limits). For 2024, the limit for these heavy SUVs, trucks, and vans is $28,900. Vehicles under 6,000 lbs have much lower depreciation limits. Make sure the vehicle is used more than 50% for business purposes (track your mileage carefully) and be aware that personal use reduces the deduction proportionally. I bought a Ford F-250 last year for my construction business and was able to take the full deduction because it's used 100% for business.

Thanks for that update Nia - this is exactly the kind of current information I was looking for! It's frustrating that Congress keeps kicking these decisions down the road, but at least now I know to plan around the 60% bonus depreciation rate rather than holding my breath for something that might not happen. The $1.16M Section 179 limit should cover most of what I need anyway. Do you happen to know if there are any other tax incentives for small business equipment purchases that might have better odds of passing this year?

This is good advice. My sister got into the New York Offer in Compromise program and settled her $12k state tax debt for about $3k based on her financial situation. Definitely worth looking into alongside the federal options.

I used TurboTax last year for a similar situation. It was pretty straightforward - it has a specific section for real estate sales that aren't your primary residence. It guides you through the whole process with questions about purchase date, sale date, costs, etc. Much clearer than some of the free options.

Thanks for sharing your experience! That's super helpful. I might switch over to TurboTax then. Cash App's interface is really confusing me for this land sale stuff, and I'd rather pay a bit more than risk doing it wrong and getting audited.

This is an excellent summary! As someone who's new to property sales, I really appreciate you breaking down all the key points in one place. The step-by-step basis calculation is especially helpful - I was getting confused trying to figure out what expenses I could include. One quick question: when you mention keeping documentation for the IRS, what specific documents should I make sure to save? I have the original purchase contract and the 1099-S, but should I also keep receipts for things like the survey or any maintenance I did on the property?

Absolutely keep all those receipts! For property transactions, the IRS recommends keeping records for at least 3 years after filing, but I'd suggest holding onto them longer since property records can be important for other reasons too. Specifically, you should save: - Original purchase contract and closing statement - All improvement receipts (surveys, grading, utilities, etc.) - Selling expenses (realtor fees, advertising, legal fees) - The 1099-S form - Any property tax records during ownership - Insurance records if you had any Even small expenses can add up and reduce your taxable gain, so it's worth being thorough. I learned this the hard way when I couldn't find a $400 survey receipt during my first property sale and had to pay tax on that amount unnecessarily!

I did this last year! Only rented my cabin for 10 days during a local festival when rates were super high. Made about $4,800 tax free. But remember you can't deduct ANY expenses if you go this route - no cleaning, no maintenance, nothing. Do the math carefully - sometimes it's actually better to rent more days and take the deductions.

This is really helpful clarification, especially about the personal use vs rental days being separate from the active/passive determination! I've been conflating those two rules. Quick follow-up question - when you say "substantially all the work being done by you" for test #2, does that mean if I hire cleaners between guests but handle everything else myself (bookings, pricing, guest issues, maintenance scheduling), I could still qualify under that test? Or would hiring any services automatically disqualify me from the "substantially all" standard? I'm trying to figure out if I need to track my hours super precisely or if the nature of my involvement is clear enough on its own.

Great question about the "substantially all" test! Hiring cleaners typically won't disqualify you from meeting this standard as long as you're handling the core business operations yourself. The IRS recognizes that using service providers for routine tasks like cleaning is normal business practice. What matters more is who's doing the substantive management work - if you're handling bookings, pricing decisions, guest communications, marketing, maintenance coordination, and financial management, you're likely doing "substantially all" the meaningful work even with contracted cleaning services. However, I'd still recommend tracking your hours as backup documentation. Even if you qualify under the "substantially all" test, having hour logs provides additional evidence of material participation. Plus, if your involvement changes over time (like if you later hire a property manager), you'll want those records to support your classification in different tax years. The key is demonstrating that you're actively running the business, not just collecting passive rental income while others do the work.

Anna, thanks for sharing your experience with Schwab - it's really helpful to know I'm not alone in dealing with this! The 4-6 week timeline for a corrected form is exactly what I was worried about with tax season coming up. Your point about keeping detailed documentation of the SEPP calculation method is really important. I used the amortization method when I set up my plan, and I have all the original calculations saved, but I hadn't thought about how that might be relevant if there's a mismatch between my 1099-R and my filing. I think I'm going to try calling Fidelity's tax department first using Paolo's specific language about Section 72(t) and Publication 575, but if they can't turn it around quickly, I'll definitely go with Form 5329 and exception code 02. It sounds like that's a well-established path that won't cause issues with the IRS. Thanks again for the advice - this community has been incredibly helpful!

This is incredibly helpful, Zainab! I really appreciate you sharing the detailed timeline and process you went through with E*Trade. The 10 business days turnaround after escalating twice gives me a realistic expectation of what to expect with Fidelity. Your suggestion about including a brief explanatory statement with Form 5329 is brilliant - I hadn't thought about providing that context proactively. Even though it's not required, it makes total sense to document the situation clearly for any future reviewers. I'll definitely prepare a simple one-page summary of my SEPP plan details, calculation method, and start date if I end up going that route. It's really reassuring to hear from multiple people that the IRS sees Form 5329 with exception code 02 routinely for these situations. Between your experience, StarSeeker's advice, and Anna's current situation, I feel much more confident about having a solid backup plan if Fidelity can't get the corrected 1099-R issued quickly enough. Thanks for taking the time to share such detailed guidance - this community really is amazing for helping each other navigate these complex tax situations!