Anyone know if the support test includes the value of the living space? Like if mother in law has her own bedroom in our house, do we count what that room would rent for as part of our support contribution?

Based on what you've described, you have a good chance of being able to claim your mother-in-law as a dependent! The key factors working in your favor are that you're providing more than half her support (housing, food, utilities, cell phone) and she's living with you for more than half the year. The main thing to watch out for is the gross income test. Her Social Security payments ($1,450/month) may not all count toward the income limit if she's not required to file a tax return, but you'll need to include the full amount of her 401K distributions ($600/month = $7,200 annually). Since the gross income limit is $4,400 for 2024, those 401K distributions alone would exceed the threshold. I'd recommend consulting with a tax professional or using IRS Publication 501 to determine exactly how much of her Social Security income needs to be counted. The rules around Social Security taxation can be complex and depend on her total combined income from all sources. Also keep detailed records of all the support you provide - housing costs, food, utilities, medical expenses, etc. You'll want to be able to demonstrate that your contributions exceed 50% of her total support if the IRS ever asks for documentation.

Don't forget to track all your expenses carefully! I claimed home equity loan interest last year and got audited because I couldn't prove some of my expenses were actually for home improvement. Make sure u save ALL receipts and take before/after pics of the renovation. The IRS made me pay back the deduction plus a penalty because I didn't have enough proof 😭

Just want to add my experience for anyone reading this thread - I went through a similar situation last year with a $55k HELOC for kitchen renovations. One thing that really helped me was setting up a separate checking account specifically for the home improvement funds. When the HELOC money came in, I transferred it all to this dedicated account and ONLY used it for renovation expenses. This created a super clean paper trail that made it really easy to prove to the IRS (and myself) exactly how every dollar was spent on qualifying improvements. Also, I kept a simple Excel spreadsheet with three columns: Date, Vendor/Description, Amount. Every time I made a purchase from that account, I'd log it immediately. Took maybe 30 seconds each time but saved me hours when tax season came around. The IRS loves clear documentation like this - shows you were intentional about tracking the funds for tax purposes. For anyone starting renovations now, I'd highly recommend this approach. Makes the whole deduction process so much cleaner!

Has anyone used specific tax software that handles ESPP sales and wash rules correctly? I tried TurboTax last year and it completely messed up my ESPP reporting.

Great thread - this is exactly the kind of ESPP situation that trips people up! Just want to add one important point that hasn't been fully addressed: when you left your job in March, your company likely processed what's called an "accelerated vesting" for your ESPP shares, which is why they all became available to sell even if they hadn't met the normal holding periods. This is pretty standard when employment ends. The key thing to remember is that since you're no longer employed there, you won't have any future ESPP purchases that could trigger wash sales. Your main concern should be any RSU vestings or option exercises you might still have scheduled, or if you're planning to buy the stock on the open market. Also, make sure you get your final W-2 from your former employer - they should report any ESPP discount as ordinary income if you end up making disqualifying dispositions, and you'll need that for accurate tax reporting.

I went through something very similar with a trust I was administering last year. The key thing to remember is that you need to be extremely thorough with your documentation since the IRS will likely scrutinize theft loss claims on trust returns. Beyond what others have mentioned about Form 4684 and the year of discovery rule, make sure you're properly handling the impact on beneficiary distributions. If the theft affected distributions that should have been made to beneficiaries, you may need to adjust the distribution deduction on Schedule B of the 1041. Also, consider whether you need to file Form 3520-A (Annual Information Return of Foreign Trust With a U.S. Owner) if any of the stolen funds were moved offshore - I've seen cases where embezzling trustees tried to hide money internationally. One practical tip: keep detailed records of all legal and forensic accounting costs related to recovering the stolen funds. These are generally deductible as administration expenses on the 1041, separate from the theft loss itself. Our trust was able to deduct over $50,000 in legal fees pursuing the former trustee. Don't forget to notify the beneficiaries about the situation and how it affects their Schedule K-1s. They have a right to know about material changes to the trust's financial position.

I'm dealing with a similar trust embezzlement situation and wanted to share some additional considerations that might help. One thing I learned from our forensic accountant is that you should also review whether any of the "stolen" funds were actually legitimate trustee compensation that just wasn't properly documented or approved. In our case, about $15,000 of what initially looked like theft turned out to be reasonable compensation that the trustee had taken without following proper procedures. Also, if your trust has multiple classes of beneficiaries (income vs. remainder), you'll need to determine whether the theft should be allocated against principal or income for purposes of the beneficiaries' interests. This can significantly impact the Schedule K-1s you'll need to issue. One practical tip: consider filing Form 8886 (Reportable Transaction Disclosure Statement) if the theft loss exceeds certain thresholds. While theft losses aren't typically "reportable transactions," very large losses sometimes trigger additional disclosure requirements, especially if they involve complex trust structures. Finally, make sure you understand your state's laws about trustee liability and recovery. In some states, remaining trustees have specific duties to pursue recovery that could affect how you report potential recoveries on the federal return. Our state required us to pursue all reasonable collection efforts before claiming the full loss, which delayed our ability to finalize the theft loss calculation.

NY state is definitely backed up this year - I'm seeing similar delays across the board. The "processed" status usually means they've finished reviewing your return and approved the refund, but the actual payment can still take a few more weeks. Since you have direct deposit, you should hopefully see it within the next 2-3 weeks. If it goes beyond 4 weeks from the processed date, I'd recommend calling their refund hotline to check for any issues.

NY state refunds have been particularly slow this year unfortunately. I filed early February and just got mine last week after showing "processed" for about 3 weeks. The good news is once it shows processed, you're definitely getting it - it's just a matter of when. I'd expect yours within the next 2-3 weeks max since you have direct deposit. Hang in there!