This has been an incredibly helpful thread - thank you all for sharing your experiences and knowledge! As someone new to being a trustee, I've learned so much from reading through everyone's insights. I wanted to add one point that might help other newcomers in similar situations: don't forget to check if your state has any specific trust income tax reporting requirements that differ from federal rules. I discovered that my state (Pennsylvania) has some unique provisions about how annuity income in trusts is classified that could have affected my filing if I hadn't caught it. Also, for anyone feeling overwhelmed like I initially was, I found it helpful to create a simple timeline of key dates: when annuity payments start, when trust tax returns are due, when K-1s need to be issued to beneficiaries, etc. Having everything mapped out visually made the whole process feel much more manageable. The advice about getting professional help early is spot on. Even with all this great information, having a CPA who specializes in trust taxation review your specific situation is invaluable. The peace of mind alone is worth the cost, especially when you're dealing with ongoing monthly distributions that will affect multiple tax years.

I went through almost the exact same situation two years ago when I became trustee of my uncle's irrevocable trust that held a variable annuity. One thing I wish someone had told me earlier: make sure you understand whether your trust is required to make "mandatory distributions" of income versus having discretionary distribution powers. In my case, the trust language required all income to be distributed annually to the beneficiaries, which meant I had to be very careful about timing. The annuity payments came in monthly, but I needed to make sure I distributed the taxable portions by December 31st to avoid the trust paying taxes at the compressed trust tax rates (which are much higher than individual rates). Also, don't overlook the importance of getting an EIN (Employer Identification Number) for the trust if you don't already have one. The insurance company will need this for the 1099-R, and you'll need it for all the trust tax filings. The IRS has a specific process for trust EINs that's different from business EINs. One last tip: keep detailed records not just of the payments, but also of your trustee decisions and the reasoning behind them. If any beneficiary ever questions how you handled the annuity distributions or tax reporting, good documentation will protect you from potential liability issues.

Just want to add that you should also keep detailed records of any expenses related to preparing the books for sale - things like cleaning, minor repairs, or professional grading if you had any done. These can be deducted as selling expenses along with the auction house commission, which will reduce your taxable gain. Also, if any of the books were particularly valuable (say over $5,000 each), you might want to consider getting a formal appraisal even now for your records. While it won't establish the stepped-up basis for tax purposes, it can help document the reasonableness of your basis calculations if the IRS ever questions them. Many rare book appraisers can provide retroactive valuations based on market conditions at the time of inheritance. One more thing - make sure to keep copies of the auction catalogs and any condition reports the auction house prepared. These documents can be invaluable for supporting your tax reporting and demonstrating that you've made good faith efforts to properly value the inherited items.

Great advice from everyone here! I went through something similar when I sold my grandmother's coin collection through Heritage Auctions. One thing I learned that might help - if you're having trouble establishing the stepped-up basis value, check if the auction house has any records of similar items they sold around the time you inherited the books. Many auction houses keep detailed sales databases and can provide comparables if you explain it's for tax purposes. Also, regarding the 1099-K threshold - even if you don't receive one, the IRS can still see payment processor records if they audit you, so definitely report everything. I made the mistake of only reporting what was on my 1099 forms my first year dealing with auction sales and got a notice later when they cross-referenced with payment data. One last tip: if you plan to sell more books in the future, consider spreading sales across multiple years to manage your tax bracket, especially since collectibles are taxed at that higher 28% rate. Sometimes timing can save you quite a bit in taxes!

This has been an incredibly informative discussion! As someone who's been researching this exact situation for my own family, I wanted to add a few points that might help others: For those asking about ongoing expenses (chemicals, heating, maintenance), make sure to distinguish between costs directly related to the medical therapy versus general pool maintenance. We've been advised to keep a detailed log showing when the pool is used for prescribed therapy sessions versus recreational use, and only deduct the proportional costs. One thing I learned from our tax attorney is that the IRS is particularly scrutinous of home pool deductions because they're often seen as luxury items. Having multiple forms of documentation helps - not just the doctor's letter, but also evidence that you explored other treatment options first (physical therapy records, documentation of why public facilities weren't viable, etc.). Also, if you're installing the pool specifically for medical purposes, consider having your contractor provide two separate quotes: one for a basic pool and another for the medical-specific features (therapeutic jets, heating systems, accessibility ramps, etc.). This can help clearly establish which portions are purely medical versus property improvement. The key seems to be creating an ironclad paper trail that demonstrates medical necessity rather than convenience or luxury. Every successful case I've read about had extensive documentation from day one.

I've been following this discussion closely as I'm in a very similar situation with my spouse's chronic pain condition. Thank you all for sharing your experiences - this has been incredibly educational! One question I haven't seen addressed: has anyone dealt with timing issues around when you can claim the deduction? We're planning to install our therapeutic pool in late 2025, but the medical documentation and specialist visits started this year. Can you claim the deduction in the year of installation even if the medical necessity was established in a previous tax year? Also, for those who went through IRS audits, approximately how long after filing did you receive the initial inquiry? I want to make sure I'm prepared with all documentation organized and easily accessible, but I'm curious about the typical timeline. The point about bunching medical expenses in the same tax year is brilliant - we're already planning some other medical procedures, so coordinating the timing could really help us exceed that 7.5% AGI threshold. This community has provided more practical advice than hours of research on my own. Much appreciated!

I'm an accountant and see this issue often. Just wanted to add that if your employer refuses to correct this or doesn't understand, you have options when filing: 1. File Form 4852 (Substitute for W-2) for the 5-month period if your employer won't issue a correct W-2 2. Report the Paychex W-2 normally, and use Form 4852 for the employer-issued portion, entering only the ADDITIONAL amounts not already reported by Paychex 3. Attach an explanation letter to your return Just don't report duplicate income! And make sure you get this resolved before filing.

This is a really common issue that causes a lot of stress, but you're handling it the right way by addressing it early. I went through something similar when my company switched from Workday to their own system mid-year. One thing I'd add to the excellent advice already given - make sure you keep detailed records of ALL your communications with your employer about this. Email them about the W-2 issue so you have written documentation of when you raised the concern and what their response was. Also, if your employer has an HR department, go through them rather than just talking to whoever handles payroll now. HR usually understands the legal requirements better and can ensure this gets handled properly. They should know that issuing a full-year W-2 when another company already reported part of the year will create duplicate reporting. The key point everyone's made is correct - you should end up with TWO separate W-2s: one from Paychex covering Jan-July, and one from your employer covering Aug-December. If your employer pushes back, you can reference IRS Publication 15 (Employer's Tax Guide) which explains how to handle this situation properly.

I've been tracking 846 code timing for about 4 years now and can offer some specific insights for your situation. The Monday 04/29 date you're seeing is actually quite favorable - I've noticed that when 846 dates fall on Mondays, the IRS typically initiates the ACH transfer on the preceding Thursday or Friday, which gives financial institutions the weekend to process. Here's what I'd expect for your timeline: - IRS likely sends the transfer 04/25-04/26 (Thu/Fri) - Your credit union receives it over the weekend - Funds could be available as early as Sunday evening or Monday morning Since you mentioned quarterly estimated tax planning, definitely call your credit union and ask specifically about their "federal tax refund deposit policy" - not just general ACH timing. Many credit unions release these funds immediately upon receipt rather than holding until the official date. I switched from Bank of America to a local credit union partly because of refund timing issues. With BofA, I got refunds exactly on the 846 date. With my credit union, I consistently get them 1-2 days early. The difference has been really helpful for cash flow planning. Set up account alerts starting 04/25, but keep your backup plan ready for the quarterly payment. The 846 date is really the IRS saying "no later than this date" rather than "exactly this date.

I've been dealing with 846 timing for several years and your situation looks promising! The Monday 04/29 date is actually ideal timing - the IRS typically initiates ACH transfers 2-3 business days early, so they'll likely send yours around 04/25-04/26 (Thursday/Friday). Since you're with a local credit union, you're in great shape. Credit unions are much more flexible than big banks with early releases. I consistently get mine 1-2 days before the 846 date at my CU. For your quarterly tax planning, here's what I'd do: 1. Call your credit union Monday and ask about their "federal tax refund ACH deposit policy" specifically 2. Set up mobile alerts starting 04/25 so you're notified immediately 3. Plan conservatively for 04/29 but expect it could arrive 04/27-04/28 4. Keep backup funding ready just in case The weekend processing actually works in your favor - many credit unions post federal deposits Sunday evening or early Monday morning. Just remember the 846 date is more of a "no later than" guarantee rather than an exact arrival date. Good luck with your quarterly payment coordination!