Does anyone know how the mortgage interest deduction works in this situation? If I own 3 properties (my primary home, a vacation home, and my mom's rental that's below market), can I still deduct the mortgage interest on all of them? Tryin to figure out if I'm hitting some kinda limit.

One thing I haven't seen mentioned yet is the importance of keeping detailed records of all your expenses related to the property. Since you're renting at below market rate, the IRS may scrutinize your deductions more closely if you're ever audited. Make sure to track everything - property taxes, mortgage payments, insurance, maintenance, repairs, even mileage when you drive over to check on the property. If the IRS does limit your deductions proportionally (like others mentioned with the 75-80% rule), you'll want solid documentation to support every expense you're claiming. Also, consider getting a formal appraisal or at least documenting comparable rentals in your area when you set the rent. This creates a paper trail showing you made a good faith effort to determine fair market value, which helps justify your rental amount if questioned later. I learned this the hard way when my accountant couldn't find enough documentation to support my below-market family rental and I had to scramble to recreate everything during tax season.

Just want to add an important consideration here - don't forget about Section 179! If the building was eligible and the previous owners took Section 179 depreciation (immediately expensed rather than depreciating over time), that can significantly change the situation. In my experience with S corp transitions, any Section 179 property keeps that treatment even with new owners if it was a stock purchase. But check if there are recapture issues if the property isn't being used for the same business purpose.

Has anyone mentioned Form 8594 (Asset Acquisition Statement) yet? If your purchase was structured as an asset acquisition rather than a stock purchase, you would have needed to file this with both buyer and seller returns to show how the purchase price was allocated among asset classes. This directly impacts depreciation.

Just went through this process last year. Make sure you're extremely thorough with Form 433-A (Collection Information Statement). The IRS will scrutinize every detail of your financial situation. Document ALL your medical expenses related to your disability because those can be counted as necessary living expenses. Also, consider checking if you qualify for Currently Not Collectible status as an alternative. With your situation (no assets, on disability), you might qualify. This doesn't eliminate the debt, but puts collections on hold. The IRS determined I was CNC last year and it bought me time while I improved my situation.

Andre, your situation is actually quite common and you definitely have options. Being on workers' comp while applying for an OIC isn't a barrier - in fact, it can strengthen your case since it demonstrates limited earning capacity. A few additional points to consider beyond what others have mentioned: 1) Make sure to include all your medical expenses related to your motorcycle accident as allowable living expenses on Form 433-A. This includes ongoing treatments, medications, physical therapy, etc. 2) Since you're in Washington State, you'll also want to address the state tax debt eventually, but focusing on federal first is smart since the IRS processes are generally more established. 3) Document your disability thoroughly - the IRS needs to understand this isn't a temporary situation where you'll be back to full earning capacity soon. 4) Consider whether you might qualify for "doubt as to collectibility" (you can't pay) versus "effective tax administration" (paying would create economic hardship). Given your circumstances, doubt as to collectibility seems most appropriate. The fact that you only made $12K in 2020 before your accident and are now on disability payments should work in your favor for demonstrating inability to pay. Just make sure every expense you claim is reasonable and well-documented.

Be careful with the buildings aspect of your business sale. We sold our landscaping company last year and kept the main warehouse/office building. The buyer wanted to lease it from us, which seemed great at first. But we didn't account for how the business operations might change under new ownership. The new owners completely changed the business model which resulted in much heavier wear and tear on the property than we anticipated. We also had issues with them making unauthorized modifications to the building. Make sure you have a VERY detailed lease agreement if you're planning to keep the buildings and lease them to the buyer!

Great question! I went through a similar situation when we sold our family restaurant but kept the building. As others have mentioned, 1031 exchanges only work for "like-kind" real property, so your business assets (trademarks, IP, equipment, inventory) won't qualify. However, here's something that might help: if you're keeping the buildings and they're currently part of your business entity, you could potentially structure things to separate the real estate into its own entity before or after the sale. This would give you more flexibility for future 1031 exchanges if you decide to sell those buildings later and reinvest in other real estate. Also consider the timing - since you're keeping the buildings, you might generate rental income from leasing them to the buyer or other tenants. That rental income could help offset some of the tax burden from the business asset sale. Just make sure to get a solid lease agreement in place if the buyer wants to rent the space, and consider having the buildings appraised separately to establish their fair market value for future reference. One more thing - don't forget about installment sale treatment if the buyer is willing to structure payments over multiple years. This won't avoid the taxes entirely, but it can spread the tax burden over time which might keep you in lower tax brackets.

This is why startup equity compensation is such a minefield. I messed up my 83(b) filing too but in a different way - I filed it but forgot to include a copy with my tax return, which apparently also invalidates it. Anyone know if there's any possible relief or exception? I've heard rumors about a "reasonable cause" exception for late filings?

I feel your pain on this one! Missing the 83(b) election is unfortunately more common than you'd think, especially at startups where HR doesn't always explain the importance clearly. Since your initial FMV was $0.00, you're actually in a relatively good position compared to others who miss this deadline. The main thing to understand is that now you'll be taxed on ordinary income as your shares vest based on their fair market value at each vesting date. My advice: start preparing financially now. Set up a separate savings account and begin putting money aside for the tax bills that will come with each vesting event. If your company has had any funding rounds or valuation increases since you received your equity, those taxes could be substantial even though you won't have cash from selling shares to pay them. Also, make sure you understand exactly when your vesting dates are and try to get the company's most recent 409A valuation reports so you can estimate what you'll owe. Being proactive about this will save you from scrambling when tax time comes around.