Based on what everyone has shared here, it sounds like your ProSystems FX is handling this correctly. Since you properly reported the Section 751 gain as ordinary income in Box 1 of the K-1s with code AB in Box 20, that income should flow to Schedule E on the partners' individual returns - not Form 4797. The confusion often comes from thinking that Section 751 gains always need Form 4797 treatment, but that's not the case when the partnership has already done the characterization work at the entity level. Your attachment of the Section 751 statement to the 1065 satisfies the documentation requirement. One thing to double-check though - make sure there aren't any special rate gains hiding in the PTP transaction (like the collectibles or unrecaptured Section 1250 gains that Ian mentioned). These would show up with different codes and need separate treatment on the individual returns. But for straight Section 751 ordinary income, Schedule E is correct.

Just wanted to add my experience as someone who's dealt with several PTP Section 751 situations - the reporting can get tricky when you have multiple PTPs with different types of gains. One thing I've learned is to always request the detailed Section 751 calculation from the partnership if it's not clearly attached to the return. Sometimes partnerships will just put the final number in Box 1 without showing the breakdown of which assets triggered the ordinary income treatment. This becomes important if you're preparing returns for partners who have other capital losses they're trying to offset - they need to understand that the Section 751 portion can't be used to offset those losses since it's characterized as ordinary income. Also, for future reference, if you ever encounter a situation where the partnership didn't properly identify Section 751 property, the individual partners would need to make the adjustment themselves using Form 4797. But from your description, it sounds like your partnership did everything correctly. ProSystems FX can be frustrating with the lack of clear tagging, but as long as the income flows to Schedule E and you've verified the partnership's Section 751 calculation, you should be in good shape.

I've been dealing with ITIN employees for about two years now in my construction business, and I wanted to share a few practical tips that might help other employers: First, always keep detailed records of the work authorization documents you verify during the I-9 process. This is separate from the tax ID issue but equally important. Some of my ITIN employees had employment authorization documents that were temporary, so I had to track renewal dates. Second, double-check that your business insurance and workers' compensation policies don't have any special requirements for employees with ITINs. Most don't, but it's worth confirming with your insurance agent. Finally, if you use a payroll service, make sure they're experienced with ITINs before you hire the employee. I had one service that kept "correcting" the ITIN back to look like an SSN, which created problems with our filings. Now I always test the system with a sample ITIN before processing actual payroll. The good news is that once you get the systems set up properly, it's really no different from processing any other employee's taxes. The IRS treats the income reporting exactly the same way.

Great question about tracking renewal dates! I use a simple spreadsheet with columns for employee name, document type, issue date, and expiration date. I set up calendar reminders 90 days and 30 days before each expiration so I can give the employee plenty of notice to renew their authorization. Some document types like EADs (Employment Authorization Documents) are only valid for specific periods, so staying on top of this is crucial. For direct deposit with ITINs, I haven't had any major issues, but some banks do ask additional questions for compliance reasons. Make sure you have a copy of the employee's ITIN authorization letter from the IRS (CP 565) if they have one - this can help verify the legitimacy of the number. Most banks will process direct deposits normally once they understand you're following proper employment verification procedures. One tip: if your bank seems unfamiliar with ITINs, you might want to speak with a business banker rather than a regular teller. Business bankers typically have more experience with these situations and can set up the direct deposit without unnecessary delays.

This is incredibly helpful! I've been putting off dealing with my tax transcript for months because the IRS website seemed so confusing. Your explanation of the different codes is much clearer than anything I found in their official documentation. Quick question about the cycle codes - I noticed mine is 20241506. Following your pattern, this would mean my account updates on Friday (last digit 6), but I've been checking and haven't seen any changes in weeks. Is it possible for cycle codes to change, or could there be processing delays that affect when updates actually happen? Also, for anyone else struggling with the online verification like I did - I discovered that if you've moved recently, make sure your address on your tax return matches exactly what's in your credit file. Even small differences like "St" vs "Street" can cause verification failures. I had to wait for my transcript by mail because of this issue, but it was worth avoiding the frustration of repeated failed attempts. Thanks again for sharing your experience - this kind of real-world guidance is exactly what newcomers like me need!

This is exactly the kind of practical guide I needed! I've been dreading dealing with my transcript because every official IRS resource seemed written in another language. Your breakdown of the codes and step-by-step process makes it feel much more manageable. One thing I'd add for other newcomers - if you're self-employed or have multiple income sources, the Wage and Income transcript becomes especially important for cross-referencing what the IRS has on file versus what you reported. I discovered a missing 1099-NEC that way, which explained why my refund was taking forever to process. Also, regarding the online verification struggles many people mentioned - I found that using a desktop computer rather than mobile made a huge difference. The verification questions seemed to load more reliably, and I could take my time without the session timing out. Successfully got through on my second attempt after switching from my phone to laptop. Thanks for taking the time to share this - saving other people from those 14 hours of confusion you went through is really generous!

Has anyone used TurboTax for reporting seller financing? I'm wondering if it handles Form 6252 correctly or if I should just go to a CPA this year.

Great thread! I'm also going through seller financing for the first time. One thing I learned from my accountant that might help - make sure you're keeping detailed records of ALL the closing costs and expenses related to the sale, not just the payments you receive. Things like title insurance, attorney fees, recording fees, etc. can all be added to your basis, which reduces your taxable gain. Also, if you're paying any ongoing expenses like property management fees or collection costs, those might be deductible against the interest income you're reporting. Another heads up - if your buyer ever defaults and you have to foreclose, that creates a whole different set of tax implications. The IRS treats it as a separate sale transaction, so you'd need to report any additional gain or loss at that point. Hopefully it doesn't come to that, but it's worth understanding upfront. Has anyone dealt with state tax requirements for seller financing? I'm in California and trying to figure out if there are additional state forms beyond the federal ones.

This is definitely concerning and you're right to ask for help! As someone who went through a similar situation, I'd recommend documenting everything carefully. Take photos of the form 13873-E and any envelope it came in - sometimes the postmark or processing center information can be helpful. Since you've never filed taxes, there's really no legitimate reason for anyone to request your tax transcript unless it's identity theft or a clerical error. The fact that it failed due to an "incomplete or missing address" actually suggests someone may have tried to use outdated or incorrect information about you. Beyond calling the IRS identity theft hotline that others mentioned, I'd also suggest: 1. File a police report for potential identity theft - you'll want this documentation 2. Consider placing a fraud alert on your credit (this is different from a freeze and lasts 1 year) 3. Keep detailed records of all your communications about this issue The good news is you caught this early! Most identity theft cases that start with transcript requests get much worse if ignored, but you're being proactive. Don't let anyone convince you this is "just a mistake" until you've verified it with the IRS directly.

This is really scary but you're doing the right thing by reaching out! I'm a tax preparer and I see situations like this occasionally. Form 13873-E specifically deals with failed Form 4506-C requests, and since you never submitted one, this is definitely a red flag. Here's what I'd recommend doing immediately: 1. Call the IRS Identity Protection Unit at 800-908-4490 (as others mentioned) - they're specifically trained for these situations 2. When you call, have the form ready and ask them to check if there are any other transcript requests or suspicious activity on your account 3. Request a copy of your tax account transcript (Form 4506-T) to see if there's any other activity you're unaware of The silver lining is that whoever tried this failed because of the address mismatch - that actually protected you in this case. But you need to find out who attempted this and make sure there aren't other attempts you don't know about. Also, since you work part-time, you might actually need to file a tax return even with low income if you had federal taxes withheld - you could be due a refund! But that's a separate issue to deal with after you resolve this identity concern. Please update us on what the IRS tells you - this kind of information really helps other students recognize these warning signs.