Great question, Diego! I went through this exact situation last year. Your wife's real estate professional status definitely allows you to deduct the full $23,400 rental loss against your ordinary income on a joint return. One important thing to keep in mind beyond what others have mentioned - make sure you're tracking not just her property management hours, but also any time she spends on your personal rental property (showing units, coordinating repairs, reviewing financials, etc.). All of this counts toward her real estate activities. Also, consider whether you want to make a grouping election under Reg. 1.469-9 to treat all your rental properties as a single activity. This can be beneficial if you have multiple rentals or plan to acquire more in the future. You make this election by attaching a statement to your tax return. The $23,400 loss will reduce your taxable income dollar-for-dollar, which at your income level could save you around $5,600-$6,100 in federal taxes alone (depending on your effective tax rate). Don't forget about state tax savings too if you're in a state with income tax. Just make sure to keep detailed records of her hours - a simple spreadsheet with dates, activities, and time spent is usually sufficient. The IRS scrutinizes real estate professional claims closely, so good documentation is your best protection.

Just wanted to add a practical tip from my experience - make sure you're also aware of the depreciation recapture implications when you eventually sell the rental property. While being able to deduct the full $23,400 loss against ordinary income is fantastic now, any depreciation you've claimed over the years will be subject to recapture at up to 25% when you sell. This doesn't change the fact that claiming the loss now is still beneficial - the time value of money means getting the tax savings today is worth more than paying recapture later. But it's good to plan ahead and maybe set aside some of those tax savings for the eventual recapture bill. Also, since your wife qualifies as a real estate professional, you might want to consider whether it makes sense to accelerate any planned repairs or improvements this year to maximize your current year deductions. Things like new flooring, appliances, or HVAC systems can often be fully deducted under Section 199A or through bonus depreciation rules. One last thing - if you're in a high-tax state, the state tax savings from this loss deduction could be substantial too. In states like California or New York, you could be saving an additional $2,000+ on state taxes alone from that $23,400 loss.

This is such a common confusion with RSUs! I went through the exact same thing last year. Here's what I learned: When your RSUs vest, your company is required to withhold taxes at the supplemental wage rate (usually 22% or 37% depending on the amount). However, this withholding is often not enough to cover your full tax obligation, especially if you're in a higher tax bracket. The key thing to understand is that the FULL fair market value of all vested shares gets added to your W-2 income - not just the ones you kept after withholding. So if 100 shares vested at $50 each ($5,000 total value), that entire $5,000 goes on your W-2 even if they only gave you 78 shares after withholding 22 shares for taxes. If you sell immediately after vesting at roughly the same price, you'll have minimal capital gains impact. But you might still owe additional ordinary income tax when you file if the withholding wasn't sufficient for your tax bracket. I'd recommend calculating what your effective tax rate will be with the additional RSU income and compare it to the 22% they withheld. If there's a gap, consider setting aside some of your sale proceeds for taxes or make an estimated payment to avoid underpayment penalties.

Just want to add another perspective on the timing aspect that might help with your decision. Since you mentioned the stock has been volatile and you have more shares vesting in coming months, you might want to consider your overall tax strategy for the year. If you sell now, you'll realize any small capital gains/losses immediately. But if you hold and the stock drops significantly before your next vesting dates, those future vests will be taxed at the lower market value (which could actually be beneficial from a tax perspective, even though it's bad for your portfolio value). On the flip side, if you're already in a high tax bracket this year due to the current vesting, spreading out the tax impact might not matter much. In that case, taking the guaranteed proceeds now (as you mentioned wanting to do) is probably the safer play. One more thing - if you do decide to sell, make sure you understand which specific shares you're selling if you have multiple vesting dates. Most brokers default to FIFO (first in, first out), but you can sometimes specify which tax lots to sell to optimize your capital gains treatment. This becomes more important as you accumulate more shares over time.

As someone who's been preparing taxes for several years, I'd strongly recommend avoiding the refund transfer route. The complications far outweigh the benefits - you're dealing with third-party processors, additional fees for your client, potential delays, and as others mentioned, the risk of offsets completely derailing payment. I've found the most successful approach is requesting payment upfront for basic preparation work (maybe 50%) and the remainder upon completion but before e-filing. This protects both parties - you get compensated for your time, and they get to review everything before final payment. Most clients understand this is standard business practice, just like any other professional service. The peace of mind is worth way more than the perceived convenience of deducting from their refund!

I've been doing taxes for my neighbors for the past 3 years and learned this lesson the hard way! My first year, I tried the refund transfer route thinking it would be "easier" for everyone. What a nightmare! Between the extra fees, delayed processing, and one client whose refund got intercepted for an old tax debt (leaving me unpaid), I quickly realized it's not worth it. Now I just ask for payment when I hand over their completed return - before I hit submit on the e-file. Most people are totally fine with this since they can see exactly what their refund will be. I use a simple invoice app on my phone and accept Venmo, Zelle, or cash. Way cleaner, no third parties involved, and I sleep better at night knowing I'll actually get paid for my work! Sometimes the old-fashioned way really is the best way.

Just a practical consideration - if your vehicle is pretty old after 7 years of business use, consider if it's worth keeping for personal use at all. I was in a similar situation with a van I used for my plumbing business, facing about $18k in recapture. Instead, I sold it to one of my employees for its fair market value (about $7500) and still had to recapture, but at least I got some cash for it. Then I bought a different used vehicle for personal use that had never been a business asset. Worked out better tax-wise.

One thing that hasn't been mentioned yet is the timing of when you need to establish fair market value for the recapture calculation. The IRS requires you to determine the vehicle's FMV on the exact date you convert it from business to personal use, not when you file your taxes. I'd recommend getting a written appraisal from a qualified appraiser or at least documenting the value with resources like KBB, Edmunds, or NADA guides on the conversion date. Keep screenshots and print copies because you'll need this documentation if the IRS ever questions your recapture calculation. Also, don't forget that once you convert to personal use, you can no longer claim any business deductions for the vehicle - no more depreciation, repairs, insurance, etc. Make sure the timing works with your business needs before making the switch.

Just want to add - make sure to request a "penalty abatement" when you finally reach the IRS! If this is your brother's first time missing a payment deadline for the 2290, the IRS has a "First Time Penalty Abatement" policy that can remove those extra charges. Sounds like the $42 might include penalties and interest that could potentially be removed.

I went through almost the exact same nightmare with my delivery business last year! The key thing that saved me was understanding that CP504B notices are often generated automatically even after you've paid, especially with Form 2290 where there can be significant processing delays. Here's what worked for me: Don't try to make another payment until you confirm whether your September payment was actually processed. Call the Practitioner Priority Service line at 866-860-4259 early in the morning (around 7 AM) - this line typically has shorter wait times than the main taxpayer assistance line. When you do get through, ask them to do a "payment tracer" on your September payment. They can tell you exactly where that money went and whether it was applied correctly. In my case, the payment had been received but was sitting in a suspense account because the reference information wasn't complete. Also, definitely get that authorization form from your brother ASAP. The IRS won't discuss anything without proper authorization, and you're wasting time on calls where they can't help you without it. The CP504B is scary but you typically have at least 30 days from the notice date before any actual levy action, so you have time to sort this out properly rather than panic-paying.