This has been an excellent discussion that really highlights how complex stock gifting strategies can be! As someone who works in financial planning, I wanted to add a few practical considerations that might help others thinking through similar decisions. One thing I've noticed from client experiences is that the emotional and relationship dynamics often get overlooked in favor of the tax optimization aspects. When you gift stocks with significant embedded losses or gains, you're essentially involving family members in your investment decisions and tax strategies. This can create unexpected pressure or awkwardness, especially if the stocks continue to decline or if the recipient feels obligated to sell at a particular time. I've also seen situations where the gifting strategy worked perfectly from a tax perspective, but created family tensions when the recipient held onto declining stocks longer than the giver expected, or sold at what the giver considered the "wrong" time. Another practical consideration is record-keeping complexity over time. The dual basis rules and documentation requirements mentioned in earlier comments become increasingly challenging to manage as years pass. I've worked with families who struggled to reconstruct the proper basis information years later when the recipient finally sold, especially when the original giver had passed away or the family circumstances had changed. For those considering this strategy, I'd suggest having very clear conversations upfront about expectations and responsibilities, while being careful not to create any appearance of coordination that could trigger IRS scrutiny. Sometimes the simplest approach of just taking your own losses and making a cash gift if you want to support family members financially ends up being less complicated overall.

As someone who recently went through a complex gifting situation myself, I want to echo the excellent points about relationship dynamics that @bc9ee73f627d raised. I gifted some tech stocks with embedded losses to my son last year, thinking I was being smart about taxes, but it created some unexpected stress in our relationship. My son felt pressured to monitor the stocks constantly and kept asking me when he should sell, even though I tried to make it clear the decision was his. He was worried about "messing up" the tax strategy, which wasn't the dynamic I intended at all. We eventually had to have several conversations to establish that this was truly his decision with no expectations from me. From a practical standpoint, what helped us was setting up a simple spreadsheet with all the key information (original basis, gift date, fair market value at gift, etc.) that we both could reference. This eliminated the back-and-forth about documentation and made it clear what records we each needed to keep. One lesson learned: if you do decide to go the gifting route, consider starting with smaller positions or less volatile stocks to test how the dynamic works with your family before committing to larger transactions. The tax benefits can be meaningful, but preserving family relationships is ultimately more valuable than optimizing every dollar of taxes. The suggestion about cash gifts instead is worth serious consideration - sometimes the simplest approach really is the best, especially when family harmony is factored into the equation.

im in exactly the same boat as u right now lol. verified last thursday, status changed yesterday. from the research I've done, the change in wording is definitely step 1 of good news. Now we just gotta wait til our cycle days (I'm 05 too). Hoping we both wake up to good news tmrw!!!

This is exactly what happened to me! Filed in March, stuck on "still processing" forever after getting the dreaded ID verification letter. Finally verified online and within 4 days saw that same status change to "being processed." My transcript was still blank too at first, which had me worried. But sure enough, on my cycle day (Thursday morning) my transcript updated with all the codes including my DDD. Got my refund deposited exactly 5 business days later. The status change really is a good indicator that your verification went through and your return is moving again. Hang tight - Thursday morning should bring good news for you!

I'm in a very similar situation with about $265k in back taxes and just discovered my license was suspended when I tried to get insurance quotes for a delivery job. This thread has been absolutely invaluable - I had no idea there were specific procedures for tax-related suspensions or that the IRS and DMV could be worked with simultaneously. Reading through everyone's experiences, I'm planning to call the IRS tomorrow morning and specifically ask for the "Collection function" to request both CNC status and a collection hold, emphasizing that the license suspension is preventing me from getting CDL employment. Then I'll immediately call my DMV using that "tax debt license suspension release procedures" terminology. One question for those who've successfully gotten through this - when documenting financial hardship for the CNC application, did you include utilities and rent that your partner/family members were paying on your behalf? I'm in a similar situation where I have zero income but my brother has been covering basic living expenses. Want to make sure I'm presenting this correctly to the IRS. The systematic approach and realistic timelines everyone has shared have given me the first real hope I've had in months. Going from feeling completely trapped to having a clear 4-8 week action plan is life-changing. Thank you to everyone who took the time to share their experiences - this community is amazing.

For documenting financial hardship when someone else is covering your expenses, you'll want to be very careful about how you present this to the IRS. When completing Form 433-A, you should list your actual income (zero) and then clearly indicate in the "other support" section that family members are providing assistance with basic living expenses. The key is showing that this support is temporary, voluntary, and specifically because you have no ability to pay - not because you're avoiding responsibility. Include a brief letter from your brother stating that he's temporarily helping with rent/utilities because you lost your job and have no income, and that this assistance would end once you're back on your feet. The IRS understands that people going through genuine hardship often rely on family support temporarily. What they're looking for is whether YOU have the ability to pay, not whether someone else is willing to help you survive. Since you have zero income and no assets, and the family assistance is clearly temporary hardship support, this shouldn't disqualify you from CNC status. Make sure to emphasize in your application that you need your license back to obtain CDL employment and become self-sufficient again. This shows the IRS that you're not just avoiding the debt but actively working toward a solution that will eventually allow you to address it. Your action plan sounds solid - calling both agencies tomorrow with the specific terminology and requests outlined in this thread should get you moving in the right direction quickly.

This thread has been incredibly helpful! I'm dealing with a similar NOL situation but have an additional complication - I have some partnership K-1 losses from a small investment I made in a friend's restaurant. How do partnership losses factor into the business vs nonbusiness classification for NOL purposes? I'm assuming since I'm not actively involved in running the restaurant (I'm just a passive investor), these would be nonbusiness losses? But the K-1 shows them as ordinary business losses, not capital losses, so I'm not sure which line of the NOL worksheet they belong on. Also, are there any special rules about passive activity loss limitations that affect how these show up in the NOL calculation? I remember reading something about passive losses being treated differently but can't find clear guidance on how that impacts the NOL worksheet specifically.

I've been through this exact same confusion with NOL calculations! Here's what I learned after making mistakes on my first attempt: For your situation, the $4,700 stock losses would definitely go on Line 2 (Nonbusiness) since personal investing isn't your trade or business. Your craft business loss of $8,200 is mostly going to be ordinary business deductions (materials, shipping, etc.) that are already factored into your business net loss - these aren't capital losses unless you actually sold business equipment at a loss. One thing that tripped me up initially: depreciation on your craft business equipment isn't a capital loss - it's a regular business expense. You only have a capital loss when you actually dispose of the asset. The key distinction is: nonbusiness = personal investments and activities; business = your trade or business activities. Since your craft business is a legitimate business activity (even if it lost money), those losses help your NOL calculation as ordinary business losses, not as Line 2 or Line 3 items. Double-check that you're not double-counting anything - your business loss should already include all your legitimate business expenses. The NOL worksheet is more about adjusting for specific limitations than recategorizing what you already calculated.

I've been through this exact scenario with multiple PE investments over the past few years, and I can share what's worked for me. The annualized income installment method on Schedule AI is definitely your best bet, but there are a few key strategies that can help maximize your chances of penalty relief. First, for the timing issue - while partnerships technically "earn" income throughout their tax year, the IRS has been increasingly reasonable about K-1 situations where the actual amounts are genuinely unknowable until you receive the forms. I've successfully allocated December year-end partnership income to Q1 when I could document that valuations and audits prevented earlier disclosure. Second, consider the "cascading" approach on Schedule AI - start by calculating what your penalty would be if you allocated all K-1 income to Q4, then recalculate allocating it to Q1 based on when you actually received the information. The IRS allows you to use whichever method results in the lowest penalty. Third, proactively file Form 843 with your return including a detailed timeline of when you contacted partnerships requesting estimates and their responses (or lack thereof). I've found that showing you made good faith efforts to obtain information during the year significantly strengthens your reasonable cause argument. The system definitely feels stacked against individual investors dealing with PE K-1s, but with proper documentation and use of the annualized method, you can usually get most or all penalties abated. The key is being thorough with your paperwork and consistent in your approach across all partnerships.

I've been dealing with K-1 penalty issues for years with my PE investments, and one thing that's helped me is understanding the difference between "actual knowledge" versus "constructive knowledge" of income for Schedule AI purposes. The IRS generally recognizes that with private equity, you don't have actual knowledge of your income until you receive the K-1, even if the partnership's tax year ended earlier. This is different from, say, rental income where you know month by month what you're earning. A few practical tips from my experience: 1) Keep a log throughout the year of any attempts to get information from your partnerships - even informal conversations at annual meetings where you ask about expected distributions. 2) When filing Schedule AI, include a brief statement with each partnership explaining why the income amount was unknowable until you received the K-1 (e.g., "Income dependent on year-end valuations completed in Q1"). 3) Consider the "prior year safe harbor" calculation first - sometimes it's better to just pay 110% of last year's tax (if your AGI was over $150K) and avoid the whole penalty calculation altogether. The annualized income method definitely works, but it requires careful documentation. The IRS has been reasonable in my experience when you can show you made good faith efforts to comply but were genuinely limited by information availability.