I went through almost the exact same situation last year! The key thing to understand is that "boot" in a 1031 exchange includes ANY cash or non-like-kind property you receive, regardless of whether it comes from the intermediary or appears on your closing statement. In your case, even though your replacement property has higher value, the cash you received at closing is still considered taxable boot. The IRS doesn't look at the net investment increase - they look at whether all proceeds from your relinquished property went into like-kind property. However, I'd definitely recommend having someone review your HUD statement line by line. Sometimes what appears as "cash out" might actually include items like: - Prorated property taxes you're being reimbursed for - Insurance premium adjustments - Other closing cost reimbursements These items might be treated as purchase price adjustments rather than taxable boot. The distinction can save you significant money, but it requires careful documentation and proper reporting. Don't try to handle this with basic tax software - the nuances of 1031 exchanges really need professional attention or specialized tools that understand real estate transactions.

This is such a common misconception about 1031 exchanges! I work with real estate investors regularly, and many assume that if their replacement property is worth more than what they sold, any cash they receive somehow gets "offset" - but unfortunately that's not how the IRS views it. The key principle is that for a complete 1031 exchange, ALL proceeds from your relinquished property must go toward acquiring like-kind property. Any amount that comes back to you as cash - whether from the intermediary, at closing, or anywhere else in the transaction - is considered "boot" and is taxable. What you described about receiving cash on the HUD statement is still boot, even though it didn't come directly from the qualified intermediary. The IRS looks at the entire transaction holistically. However, I'd echo what others have said about examining your HUD statement carefully. Items like prorated property taxes, insurance adjustments, or legitimate expense reimbursements might not be treated as boot if they're properly documented and classified as purchase price adjustments rather than cash distributions. Given the complexity and the potential tax implications, I'd definitely recommend having a tax professional who specializes in real estate transactions review your specific situation. The distinction between taxable boot and legitimate adjustments can make a significant difference in what you owe.

11 Having gone through this exact situation (moving from California to British Columbia), my advice is to interview at least 3 different cross-border specialists before deciding. Ask these specific questions: 1. How do they handle FBAR and FATCA reporting requirements? 2. What strategies do they recommend for RRSPs and 401(k)s in a cross-border situation? 3. What's their experience with the foreign earned income exclusion and foreign tax credits? 4. How do they stay current with changes to the US-Canada tax treaty? I ended up going with a smaller firm that specializes exclusively in US-Canada situations rather than a big international firm that does all countries. The specialized knowledge made a huge difference.

I went through a similar cross-border move (Toronto to Denver) about 3 years ago and can share some hard-learned lessons. The biggest mistake I made was waiting until tax season to find an accountant - by then, all the good cross-border specialists were swamped and I ended up with someone who wasn't as experienced. Start your search now, even before you move! A good cross-border accountant can actually help you plan the timing and structure of your move to minimize tax implications. For example, they might recommend which month to establish residency, how to handle any stock options or bonuses, and whether to liquidate certain accounts before or after the move. Also, ask about their fee structure upfront. Some charge a flat fee for cross-border moves, others bill hourly. I found that firms charging flat fees were more motivated to be efficient, while hourly billing sometimes led to unnecessarily complex approaches. One more tip: make sure they can handle both your final Canadian return (with departure tax calculations) AND your partial-year US resident return for the same tax year. Not all international tax preparers are comfortable with both sides of this equation.

I had a similar experience last year but with a twist - I actually lost money on currency exchange during my trip to the UK. The pound weakened significantly while I was there, and when I converted my remaining £300 back to USD, I ended up with about $75 less than what I originally exchanged. My question is: can I claim this as a loss on my taxes? It seems unfair that gains might be taxable but losses aren't deductible. I know the $200 threshold was mentioned for gains, but does the same apply in reverse for losses? My accountant wasn't sure about this specific scenario since it's not something that comes up often. Also, for future reference, does anyone know if there's a way to minimize these currency fluctuation risks while traveling? I've heard about hedging strategies but wasn't sure if they're practical for regular travelers.

I appreciate everyone sharing their experiences here! As someone who's dealt with this exact situation multiple times as a frequent business traveler, I wanted to add a few practical points: First, keep detailed records even if you think your gains are under the $200 threshold. Exchange receipts, bank statements, and conversion records can be invaluable if questions come up later during an audit. I use a simple spreadsheet to track exchange dates, amounts, and rates. Second, the "personal use" vs "investment intent" distinction that @Sunny Wang mentioned is crucial. The IRS looks at patterns - if you're regularly holding foreign currency between trips or timing exchanges based on rate movements, they might question whether it's truly for personal travel. One thing I haven't seen mentioned yet: if you're using foreign ATMs frequently, those fees can add up and effectively reduce any currency "gains" you might have made. Most banks charge $3-5 per international ATM withdrawal plus currency conversion fees. For anyone doing this regularly, I'd recommend keeping a simple log of your foreign currency transactions. Even if individual trips don't hit reporting thresholds, having good records makes tax preparation much smoother and shows the IRS you're being diligent about compliance.

Don't forget you can also deduct state and local taxes (SALT) up to $10,000 when itemizing! This includes state income tax or sales tax (you choose which one), plus property taxes. If you paid state income tax through withholding from your paycheck, that counts toward this potential deduction. Even if your medical expenses aren't enough by themselves to exceed the standard deduction, combining them with SALT deductions might push you over the edge. Check your W-2 box 17 to see how much state tax was withheld, and add any property taxes if you paid them.

One thing to consider - if youre close to making itemizing worth it, donating some stuff to charity before the end of the year could push u over the edge! I was in a similar spot last year and cleaned out my closet, got a receipt from Goodwill for like $350 in donated clothes and that was enough to make itemizing better than standard deduction for me.

I'm dealing with a similar situation right now! Our 28-unit condo association has been mailing checks for our 1120-H payments for the past few years without any issues. We typically owe around $150-200 annually on our reserve fund interest. Reading through all these responses, I'm now thinking we should probably set up EFTPS for next year just to be safe. The conflicting experiences people are having with penalties is making me nervous - it seems like there might be some inconsistency in how the IRS is applying the electronic payment requirements to small associations. @Owen Jenkins - definitely contest that penalty! Based on what others have shared here, it doesn't sound like that penalty should apply to your situation. The fact that you've been successfully paying by check in previous years should work in your favor. One question for the group: has anyone had success using IRS Direct Pay instead of EFTPS? I've heard it might be simpler for one-time annual payments, but I'm not sure if it works for business tax payments or just individual returns.

As someone who's been through this exact confusion with our 24-unit association, I can share what we learned after extensive research and consultation with our CPA. The key distinction is between "federal tax deposits" (which require EFTPS) and annual tax payments. Small condo associations filing 1120-H typically fall into a gray area because we're not making regular quarterly deposits like larger entities. Here's what we discovered: If your association owes less than $1,000 in taxes annually and doesn't have employees (no payroll taxes), you technically have more flexibility. However, the IRS has been moving toward requiring electronic payments across the board, and their enforcement seems inconsistent for small associations. Our solution was to set up EFTPS despite not being strictly required. The registration took about 10 days to receive the PIN by mail, but now we have peace of mind knowing our payments are immediately confirmed and properly credited. For your immediate situation, if you're close to your filing deadline and haven't set up EFTPS yet, you can still send a check with Form 8109-B to the address specified in the 1120-H instructions. Just make sure your EIN and "Form 1120-H" are clearly written on the check. But definitely consider setting up EFTPS for next year - it's worth the one-time hassle to avoid any potential issues down the road.