Just wanted to chime in as someone who's been managing inherited rental properties for several years. The passive loss rules can definitely be confusing, but you're on the right track with the active participation exception. One thing I'd add to all the great advice here - make sure you understand how the depreciation recapture will work when you eventually sell the property. With such a high stepped-up basis and substantial annual depreciation, you'll be recapturing potentially hundreds of thousands in depreciation at a 25% rate when you sell, even if the property appreciates. This doesn't mean you shouldn't take the depreciation (you should!), but it's worth factoring into your long-term planning. Also, consider whether you might benefit from a 1031 like-kind exchange when you eventually sell. This can defer both the capital gains and depreciation recapture taxes if you reinvest in another rental property. With your property value, this strategy could save you significant taxes down the road. The $25,000 active participation allowance is definitely your best immediate option given your situation, but don't forget to think about the bigger picture tax planning too!

This thread has been incredibly helpful! I'm in a somewhat similar situation with an inherited property, though not quite as high-value as yours. One aspect I haven't seen mentioned is the importance of getting your depreciation method election right from the beginning. With such a substantial stepped-up basis, you might want to consider whether the standard straight-line depreciation over 27.5 years is optimal, or if you should explore bonus depreciation on certain components through a cost segregation study (as Sarah mentioned earlier). The timing of this decision matters because once you start depreciating using one method, changing it later requires IRS permission via Form 3115. Also, since you mentioned this is a late 2023 inheritance, make sure you're aware of the mid-month convention for rental property depreciation. Your first year depreciation will be prorated based on the month you placed the property in service, not a full year's worth. Given the complexity and the substantial tax implications (both current benefits and future recapture), I'd really recommend consulting with a tax professional who specializes in rental property taxation. The potential tax savings and compliance benefits far outweigh the cost of professional advice in a situation like this.

Another option nobody mentioned - you could elect to treat your TFSA as a foreign grantor trust and file Form 3520-A instead of Form 3520. This might sound more complicated, but some cross-border accountants prefer this approach because it provides more clarity on how to report income. Also, check if you're required to file FBAR (FinCEN Form 114) for your TFSA. The threshold is lower than Form 8938 - just $10,000 across all foreign accounts combined at any point during the year.

I went through this exact situation two years ago when I moved from Vancouver to California. The TFSA reporting requirements are genuinely confusing because the IRS guidance has been inconsistent over the years. Here's what I learned after consulting with a cross-border tax specialist: You'll likely need to file Form 8938 since your TFSA value exceeds the threshold ($50k for single filers living abroad, but lower thresholds apply once you become a US resident). For Form 3520, while the IRS has indicated they won't aggressively pursue penalties for TFSAs, many professionals still recommend filing it for complete compliance. The most important thing people don't realize is that you need to report ALL income generated by your TFSA on your US tax return - interest, dividends, capital gains, everything. The "tax-free" benefit only applies in Canada, not for US tax purposes. Given the complexity and potential penalties, I'd strongly suggest finding a CPA who specializes in US-Canada cross-border tax issues, even if it's just for a consultation. The peace of mind is worth the cost, and they can help you decide whether to keep the TFSA or close it based on your long-term plans. Also don't forget about FBAR filing if your combined foreign accounts exceed $10k at any point during the year - that's separate from the other forms and has its own penalties for non-compliance.

Has anyone else noticed that TaxACT seems to struggle with calculating QBI deductions correctly for partnerships? We had to manually override some of their calculations last year. Wondering if they've fixed this for the current tax season?

I can definitely confirm that you can file just a 1065 partnership return through TaxACT without doing your personal taxes through them. I've been doing this for our small real estate partnership for the past three years. You'll want to look specifically for their "TaxACT Business" software, not their personal tax version. The business edition includes Form 1065 and all the related schedules you'll need for rental properties, including depreciation schedules and K-1 generation for you and your brother-in-law. A few tips from my experience: - The business version does cost more than personal, but it's still reasonable compared to going to a CPA - You can absolutely e-file the 1065 - no need to print and mail - Their rental property depreciation module works pretty well for straightforward situations - Make sure to keep good records of your basis in each property, as you'll need this for the K-1s For a simple two-property partnership like yours, TaxACT Business should handle everything you need without any issues. Just be prepared to spend a bit more time learning the interface if you're used to their personal tax software - the business side has more complexity but it's still user-friendly overall.

As someone who's been running a small collectibles business for a few years, I wanted to add one more consideration that might help - make sure you're thinking about the GST/HST implications on BOTH sides of the transaction if you're registered. When you "purchase" those $120 worth of cards from your customer, you might be eligible to claim input tax credits if the person you're buying from is also GST/HST registered (though this is rare with individual collectors). Most of the time you won't get ITCs since you're buying from consumers, but it's worth understanding the rules. Also, I've found it helpful to set up specific inventory categories in my accounting software for "trade-in inventory" vs "purchased inventory" - makes it easier to track your margins and see how profitable your trade programs actually are. Sometimes what feels like a good deal in the moment doesn't look as great when you factor in all the tax obligations! The separate transaction approach that Dylan mentioned is definitely the way to go. Clean books make everything easier when tax season rolls around.

Just wanted to chime in as someone who went through a CRA audit specifically focused on barter transactions at my hobby shop. The most important thing I learned is that consistency in your valuation method is absolutely critical - more important than being perfectly accurate on every single card. During my audit, the CRA agent was primarily interested in whether I had a reasonable, documented system for determining fair market values, not whether I got every price exactly right. I used a combination of TCGPlayer for singles over $5, Beckett guides for vintage cards, and flat rates for commons/bulk. As long as I could show I applied these methods consistently across all trades, they were satisfied. One practical tip that saved me: I started requiring customers to initial a simple trade form acknowledging the values we agreed on for their cards. This eliminated any potential disputes about whether the values I recorded were actually what was agreed to during the transaction. The audit process was actually pretty straightforward once I could demonstrate I was treating trades as proper buy/sell transactions rather than trying to hide revenue through "discounts." Documentation is your best friend here!

This thread has been absolutely incredible to follow! As someone who's completely new to both Intuit and international remote work, I've learned so much from everyone's real experiences and practical advice. The progression from initial concerns about VPN access and tax implications to comprehensive solutions covering everything from travel routers to WhatsApp backup communication has been so educational. I especially appreciate how people came back to share their actual results after trying the various services and suggestions - that kind of honest follow-up is invaluable for newcomers like me. I'm planning a similar trip to work from Mexico City for about 10 days later this year to visit family, and I feel so much more confident now knowing about the simplified approval process for trips under 14 days, the importance of testing everything beforehand, and all the practical considerations like backup internet, local SIM cards, and even cultural factors like Mexican business hours. One small thing I wanted to add based on my experience with other international travel - it might be worth checking if your health insurance covers you while working abroad, even temporarily. Some policies have different coverage for business vs. leisure travel, and it's better to know upfront than discover limitations if you need medical care while on your work trip. Thanks to everyone for creating such a supportive and informative discussion. This is exactly the kind of community collaboration that makes navigating new situations so much easier!

This has been such an amazing resource! As someone who's been lurking in this community but hasn't posted before, I finally had to jump in because this thread addresses exactly what I've been wondering about. I'm planning to work from Oaxaca for about 8 days in a couple months while my partner visits family there, and honestly I was pretty nervous about the whole process. But reading through everyone's experiences - from the policy updates making short trips much simpler to all the technical preparation tips - has been incredibly reassuring. The practical advice about testing VPN connections from coffee shops, getting local SIM cards as backup, and even considerations like bringing silica gel packets for humidity protection are exactly the kind of real-world insights you can't get from official documentation. And seeing people come back to update their experiences with services they initially questioned shows how genuinely helpful this community is. One question I have that I don't think has been covered - has anyone dealt with scheduling challenges around Mexican holidays or local events that might affect internet/power infrastructure? I know @Zoe Gonzalez asked about this generally, but I'm specifically wondering about Oaxaca since it has such a rich festival calendar. I'd hate to accidentally plan my work week during a major celebration that could impact connectivity. Thanks to everyone for sharing such detailed experiences. This thread is getting bookmarked for sure!